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ANKARA: Turkey welcomed the Crown Prince of Abu Dhabi, Sheikh Mohammed bin Zayed Al-Nahyan, the de facto ruler of the United Arab Emirates, on November 24th.
The visit marks a new page in economic relations between Turkey and the United Arab Emirates as several investment agreements have been signed, backed by a $ 10 billion fund.
The agreements focused on strategic sectors like energy, ports and logistics, petrochemicals, technology, food and health, as well as some cooperation agreements between exchanges and central banks with a possible swap agreement on the horizon.
Dr. Robert C. Mogielnicki, senior scientist at the Arab Gulf States Institute in Washington, said Turkey was a large market that the UAE could not ignore if they wanted to get the most out of economic engagement in the wider Middle East and North Africa.
“Turkey also wants to support stable trade and investment partners in the face of the volatility and uncertainty that plagues its domestic economy,” Mogielnicki told Arab News.
Given the enormous potential of the agreements, especially in difficult economic times for Turkey, whose lira is reaching new lows this week, it remains to be seen to what extent this economic rapprochement, which has released billions of dollars, will be supported by political contacts.
At the same time, the Emirati Economy Minister Abdulla bin Touq Al-Mari held a meeting with the Turkish Trade Minister Mehmet Mus, shortly after the Turkey-UAE Joint Economic Commission meeting in Dubai.
“Today we are starting a new era of sustainable economic partnership between the two countries,” said Al-Mari.
UAE sovereign wealth funds have already invested heavily in Turkish online grocer Getir and e-commerce giant Trendyol.
Soner Cagaptay, director of the Turkish program at the Washington Institute, believes the UAE’s signal that Abu Dhabi is ready to invest $ 10 billion in Turkey could be a shot in the arm for the Turkish economy a solid economic policy in Ankara.
“It will not help the Turkish economy fully recover, it will only help prevent it from deteriorating further today,” he told Arab News.
However, Mogielnicki believes the Emirati-Turkish rapprochement is unlikely to have a major impact from the currency crisis in Turkey, which is more closely related to the political dynamics surrounding the central bank and US interest rates.
“But an economic vote of confidence from the Emirates won’t hurt,” he said.
The Turkish Foreign Minister Mevlüt Cavusoglu will visit Abu Dhabi in mid-December to hope for joint steps to initiate political rapprochement.
Melahat Kemal, an Istanbul-based researcher on Turkey-MENA relations, said Turkey and the United Arab Emirates would have to resolve some of their key political disputes in order to reap the economic benefits of this latest wave of agreements.
“The first step is to find consensus on their policies on the Syrian and Libyan conflict and gas exploration in the eastern Mediterranean,” she told Arab News.
“There is still no political position from Heads of State or Government on these hot topics. The Turkish authorities prefer to subdivide their rapprochement by focusing only on the monetary side of the relationship. “
The trading volume of the two countries rose by 21 percent last year compared to 2019 and doubled in the first half of 2021 compared to the same period of the previous year.
Both sides are working to diversify the non-oil trade as Turkey is a key market for Emirati products to reach Asia and Europe while the UAE is helping Turkish goods open markets in the Middle East and Africa.
Political rapprochement, according to Kemal, requires mutual trust-building measures and, in the short term, relations should only run on economic fronts that could contribute to stability in the region.
“The visit of Cavusoglu in December is an important step in this direction,” she said.
Cagaptay agreed but said there was still a long way to go as the two countries disagreed on a number of issues.
“They have different views in three war zones, with the UAE moving forward to normalize relations with the Syrian Assad regime while Turkey is still hostile to him,” he said.
“They also have conflicting interests in the Libyan and Yemeni civil war,” he said.
According to Cagaptay, the Muslim Brotherhood issue will be a litmus test for political normalization.
“Turkey should also end its support for Hamas and the Muslim Brotherhood, which the United Arab Emirates sees as the greatest security threat both domestically and internationally,” he said.
With the US relocating from the Middle East to the Pacific, Arab countries are trying to de-escalate tensions in the region and continue normalization efforts.
Ankara has also taken some steps to curtail the activities of Hamas and the Muslim Brotherhood on Turkish soil – an incentive for the Gulf states to reconcile with Turkey.
According to Mogielnicki, there has been widespread recognition since the beginning of 2021 that diplomatic tensions and conflicts in the region have reached a point of diminishing returns.
“Ongoing conflict has the potential to hamper important economic recovery efforts in the region. Gulf states like the United Arab Emirates want to make sure that their future foreign policy decisions are good for business, ”he said.