Turkish President Recep Tayyip Erdogan embarked on a tour of Persian Gulf states, including Saudi Arabia, to explore trade and investment opportunities that can support Turkey’s struggling economy. Erdogan arrived in Jeddah accompanied by a delegation of approximately 200 businesspeople. He met with Crown Prince Mohammed bin Salman, expressing his delight with the visit and attending a welcoming ceremony at Al Salam Palace.
As part of his three-day trip, Erdogan has arranged business forums in Saudi Arabia, Qatar, and the United Arab Emirates. The President emphasised the goal of improving relations and cooperation in various fields, with a particular focus on joint investments and commercial initiatives.
The visit is taking place against the backdrop of sales and fuel tax increases in Turkey, which Finance Minister Mehmet Simsek asserts are necessary to restore fiscal discipline and reduce inflation. Turkey has been grappling with a high inflation rate, officially at 38% but estimated to be around 108% by independent economists in June. Additionally, the country is facing a record current account deficit, reaching $37.7 billion in the first five months of this year. Erdogan seeks support from the oil- and gas-rich Gulf states to help address this shortfall.
In recent years, Turkey has made efforts to mend strained relationships with Saudi Arabia and the UAE after a decade-long rift. The tensions arose from Turkey’s support for the Muslim Brotherhood during the Arab Spring in 2011, which was viewed as a threat by some Gulf monarchies. The situation worsened due to the boycott of Turkish ally Qatar by Saudi Arabia, the UAE, Egypt, and Bahrain. The murder of Saudi journalist Jamal Khashoggi in 2018 further strained ties between Turkey and Saudi Arabia. However, during Erdogan’s visit, economic agreements were signed, and Saudi Arabia expressed its intent to purchase Turkish-made Baykar drones.
Erdogan’s diplomatic re-engagement with previously estranged regional powers has attracted funding from the Gulf, which has alleviated economic pressure on Turkey. Qatar and the UAE recently provided Turkey with approximately $20 billion in currency swap agreements, and Saudi Arabia deposited $5 billion into Turkey’s Central Bank in March. Following Erdogan’s re-election, Turkey and the UAE signed a trade deal potentially worth $40 billion over the next five years.
Erdogan is scheduled to meet with Qatar’s Emir, Sheikh Tamim bin Hamad Al Thani, in Doha on Tuesday, followed by a meeting with the UAE’s leader in Abu Dhabi on Wednesday. The Gulf tour aims to bolster economic ties and strengthen cooperation between Turkey and these influential Gulf nations.
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