Turkey and the Gulf : It’s complicated

Turkish President Recep Tayyip Erdogan is preparing to spend three days touring the Arab Gulf states: Saudi Arabia on Monday, Qatar on Tuesday and the United Arab Emirates on Wednesday. During his visit, the Turkish leader expects to firm up multibillion-dollar deals that could include everything from privatising Turkish state assets to direct investments, defense industry deals and business acquisitions or contracts.

“During our visit, we will have the opportunity to personally follow up on the support these countries will provide to Turkey,” Erdogan recently told the Turkish press. “They’ve already expressed that they were ready to make serious investments in Turkey during my previous contacts. I hope we will finalise these during this visit.” Senior Turkish officials told the Reuters news agency they hope to confirm direct investments of around $10 billion (8.9 billion euros) from the Gulf states shortly after Erdogan’s trip, and then between $25 billion and $30 billion in total over a longer period of time.

The financial aspects of the presidential visit are especially important to Turkey, whose economy is under severe strain thanks to years of what economists have described as Erdogan’s unconventional policies. Currently, inflation is running at record highs, the Turkish lira has devalued to record lows and the Turkish government’s budget deficit is becoming unmanageable.

So now, after Erdogan’s slim reelection in May, a better relationship with the wealthy Gulf states is seen as essential to shoring up the economy and cementing his leadership.

The oil-rich Gulf states have already helped resolve Turkey’s ongoing foreign currency crisis, at least in the short term, with direct currency swap agreements — and by directly depositing money into Turkish state accounts. Qatar and the UAE have provided Turkey with around $20 billion in currency swap agreements. And in March, Saudi Arabia deposited $5 billion into Turkey’s central bank to help shore up the economy. But it hasn’t always been this way.

Just three years ago, Turkey and Saudi Arabia were busy boycotting each another’s imports and blocking media outlets. Turkey has a long and complex relationship with its wealthy neighbors to the south and they’ve gone from rivalry to detente, to cutting all ties and now, more recently, back to more friendly footing again.

Of the three, Turkey has the best relationship with Qatar, which has been its ally for about a decade. In 2014, Turkey took Qatar’s side during the small Gulf country’s first serious diplomatic crisis. Back then, Qatar was isolated by its larger neighbours Saudi Arabia and the UAE because of bitter differences in opinion over foreign policy approaches. The diplomatic conflict worsened and saw Qatar blockaded by air, land and sea between 2017 and early 2021. Turkey sent food, water and medicine, and continued to align with Qatar, going so far as to station Turkish troops there. 

Qatar repaid the Turks by supporting them on the international stage — for example, by siding with Ankara in the Arab League and by making large financial investments in the country. Qatari investment in Turkey rose by 500% between 2016 and 2019. Ideological and political motivations are often ascribed to the Qatari-Turkish relationship but really, it’s a “marriage of convenience,” researchers at the Hague-based Clingendael Institute think tank wrote in a 2021 briefing.