Türkiye and the United Arab Emirates (UAE) are expected to sign new economic deals as President Recep Tayyip Erdoğan is set to pay a visit to the Gulf country soon, a senior official said Monday.
Treasury and Finance Minister Mehmet Şimşek said Ankara and Abu Dhabi are expected to sign a framework agreement on the sidelines of the visit.
"We will complete the work in the next two weeks. Our president will probably pay a visit there after that. There will probably be a framework agreement during that visit," Şimşek told reporters after a Cabinet meeting in the capital Ankara.
Without giving details, he said the pact would be "pretty comprehensive. Technically, we have advanced a lot."
He added that Erdoğan would visit the UAE next week after a NATO summit in Lithuania.
The visit would follow a trip by Vice President Cevdet Yılmaz and Şimşek to the UAE on June 22, during which they met officials and held a series of delegation meetings. The duo met with UAE President Sheikh Mohamed bin Zayed Al Nahyan (MBZ).
Türkiye expects the UAE and Saudi Arabia to invest in its energy and defense sectors, sources with knowledge of the talks said after negotiations in Abu Dhabi by its top economic officials.
After his reelection last month, Erdoğan named the pair to his Cabinet in a signal Türkiye would revamp policies centered around monetary stimulus and opt for interest rate hikes to combat stubborn inflation, stabilize the volatility in the Turkish lira and rebuild foreign exchange reserves.
In the first monetary policy committee meeting under new Governor Hafize Gaye Erkan, Türkiye’s central bank hiked its benchmark policy rate by 650 basis points to 15% last week and said it would go further in the coming period.
Efforts to attract FDI
Since 2021, when Ankara launched a diplomatic effort to repair ties with Saudi Arabia and the UAE, investments and funding from the Gulf helped boost Türkiye’s foreign reserves and stabilize the lira.
With elections over, Gulf officials are discussing direct investments in the energy and defense sectors, according to the sources.
Türkiye’s government hopes that new policy steps and regulations will attract investment and fund flows.
Ankara has secured some $28 billion in foreign currency swap deals in recent years, including from the UAE. Last year, Abu Dhabi’s International Holding Co. acquired via a subsidiary a 50% stake in Türkiye’s Kalyon Enerji for $490 million.
Erdoğan said on Monday that his new economy team accelerated efforts to increase foreign direct investment inflows after he secured another five-year term in the May elections.
Following the Cabinet meeting, he also said the government is committed to ensuring economic growth with investments and a return to a current account surplus while aiming to increase the welfare of citizens.
New investments
Separately, Türkiye’s Trade Minister Ömer Bolat on Monday said the UAE sought to make new investments in Türkiye, especially in the fields of energy, food, agriculture, health services, medicine, logistics and transportation.
Bolat’s remarks came after a meeting with Mohamed Hassan Alsuwaidi, the chief executive officer of Abu Dhabi Development Holding (ADQ), one of the largest investment enterprises in the Gulf.
The meeting discussed "the roadmap for strengthening investment relations between Türkiye and the United Arab Emirates," Bolat tweeted.
Stating that the UAE sees Türkiye as a target for their investments in many fields, Alsuwaidi expressed that they want to make new investments in Türkiye, especially in the fields of energy, food, agriculture, health services, pharmaceuticals, logistics and transportation within the framework of their portfolio priorities.
Türkiye and the UAE signed a comprehensive economic partnership deal this March aimed at, among others, lifting the bilateral trade volume between the countries to $40 billion in five years.
Negotiations on the agreement started last year after a warming in political relations following Sheikh Al Nahyan’s visit to Türkiye in 2021, during which the UAE set up a $10 billion investment fund.
Bilateral trade between the two nations hit $18.9 billion last year, up 40% from the previous year, and Türkiye is now the UAE’s sixth-largest trading partner for non-oil trade.
"The ‘Comprehensive Economic Partnership Agreement,’ which was signed between Türkiye and the UAE, and the ‘Agreement on the Reciprocal Protection and Promotion of Investments,’ which is in the process of revision, provide a solid legal basis for investments," Minister Bolat said Monday.