Heralding an era of stability and prosperity

The visit holds significance in the bilateral relations between the two countries

The visit of H.E. President Recep Tayyip Erdoğan to the UAE marks a long-awaited turning point in the UAE-Türkiye relations spanning several decades. The state visit also signals a paradigm shift in the economic and political relations of the two countries while heralding an era of regional stability and partnership for progress and prosperity.

For the UAE, the Turkish leader’s visit, following a visit to Ankara in November 2021 by His Highness Sheikh Mohamed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi, and the Deputy Supreme Commander of the UAE Armed Forces, is yet another defining moment in its practice of ‘zero problems’ policy towards countries of the region to ensure enduring peace and shared prosperity in the Middle East. Indeed, ‘zero problems’ policy has become a trademark of Emirati foreign policy centered on peaceful co-existence and regional harmony.

Sheikh Mohamed’s visit

H.E. President Erdoğan’s talks with the UAE leaders during his visit, described by Turkish officials as “a testament to the improved ties between the countries” are expected to build on the mutual trust and friendship established between the two regional powers in November when the Abu Dhabi Crown Prince, in his first official trip to Türkiye since 2012, met the Turkish leader after a decade of frosty relations. During that visit, the UAE, Arab world’s second largest economy, and Türkiye, the world’s 19th largest economy, signed deals for billions of dollars of investments, including in technology and energy. The main objective of the visit was to help create an economic common ground by promoting trade and commercial partnerships and achieving successful and sustainable investments.

While announcing his plan to pay an official return visit to the UAE, H.E. President Erdoğan had underlined that similar steps made with the UAE would be taken to mend broken relations with Egypt and Israel, signifying the far-reaching positive development the region’s political and economic landscape would witness in the years to come. H.E. President Erdoğan had reiterated that Türkiye hopes to maximise cooperation with Egypt and Gulf nations ‘on a win-win basis’. The leaderships of the two countries also look forward to exploring new opportunities and avenues of collaboration to benefit both nations and advance mutual development goals.

Warming relations

Political pundits view the warming relations as a deep desire among the two influential nations to de-escalate crises in the Middle East and build relationships that serve the peoples of the region.

The warming of relations between Abu Dhabi and Ankara had begun with the visit to Ankara by the UAE National Security Adviser Sheikh Tahnoun bin Zayed and his meeting with the Turkish President in 2021.

During subsequent telephone talks, Sheikh Mohamed and H.E. President Erdoğan discussed developing bilateral relations.

Subsequent to such positive developments, the UAE announced a $10 billion fund to support mainly strategic investments in Türkiye, including in the health, energy and food sectors.

Deals and accords

During Sheikh Mohamed’s visit, the two sides signed a number of agreements. The memorandums of understanding were signed between the Abu Dhabi Development Holding (ADQ), Turkish Wealth Fund (TVF) and the Turkish Presidency Investment Office, as well as with some Turkish companies.

ADQ signed an accord on investing in Turkish technology firms and establishing a technology-oriented fund, while Abu Dhabi Ports signed a deal on port and logistics cooperation. Deals were also inked between ADQ and Turkish company Kalyon on energy and infrastructure, another with CCN Group on health cooperation and a third with Türkiye’s Presidency Investment Office on renewable energy. The central banks of the UAE and Türkiye also signed a cooperation agreement. The central banks had agreed a nearly $5 billion swap deal in local currencies, boosting dwindling foreign-exchange reserves depleted by Türkiye’s financial turmoil.

Speaking to Turkish media members during his return from the 15th summit of the Economic Cooperation Organisation (ECO) in Turkmenistan's capital Ashgabat, H.E. President Erdoğan said deals made with the UAE during the visit will mark the beginning of a new era in the bilateral relations between the two countries.

A good point

“We had a meeting with Mohamed bin Zayed in 2011. After that, we went through some different periods. But we did not completely break ties. At least the intelligence agencies continued their talks. Meanwhile, our commercial relations continued. Despite these undesirable developments, the issue eventually came to a good point,” the President said.

Diplomatic circles say the two countries have a common desire, real commitment and bilateral vision towards achieving peace, stability and prosperity, not only for us, but for the entire region. Both aim to build partnerships to address global challenges such as climate change, energy, food and water security.

Türkiye is also in talks with the UAE about energy investments, including electricity generation, while the UAE is seeking to deepen trade and economic relations with Ankara. Emirati sovereign wealth funds have also made significant investments in Turkish online trade platforms. The UAE is expected to sign agreements with Türkiye, including “renewing previous commitments.”

Setting new targets

As a Turkish diplomat said, the goal is to strengthen the co-operation between the two countries in the fields of climate change, energy, and water and food security, in addition to health, agriculture, logistics, infrastructure, finance and tourism. Both nations are ready to set new targets for further investments and cooperation.

Türkiye attaches great importance to the co-operation with the UAE as it believes that strengthening relations will not only contribute to mutual interests, but also to the prosperity and stability of the region.

The UAE is Türkiye’s top trading partner among the GCC countries. Bilateral trade between the two countries in 2020 reached $8 billion. Trade in the first 10 months of 2021 amounted to $6.4 billion. The trade volume of the two countries increased by 21 per cent in 2020 compared to 2019, and doubled in the first half of 2021 compared to the same period in the previous year. As a senior Turkish official said, the current volume of bilateral trade is “still far from reflecting our potential.”

Non-oil trade

Both sides are working to diversify non-oil trade as Türkiye is a key market for Emirati products to reach Asia and Europe, while the UAE helps Turkish goods opening up to the Middle Eastern and African markets.

The UAE is also an important investor in Türkiye and ranks second among the GCC countries. The UAE has significant investments in tourism, banking, as well as in ports and retail.

In an interview with Bloomberg last week, Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, said the UAE was looking to double or triple its trade with Türkiye by capitalising on its logistical ties with the rest of the world.

Turkish presence

There is considerable Turkish presence in the UAE including Turkish construction companies which have put their signature on many developments in the region. Turkish contractors have undertaken 141 projects worth $13 billion in the UAE. In addition, there is a small Turkish community living in the UAE.

According to the Turkish embassy, the number of Turkish companies established in the UAE is over 400. Some of them are looking at increasing their investment share in the UAE in the fields of logistics, finance, renewable energy and infrastructure in the coming years.

— issacjohn@khaleejtimes.com