Why Are Gulf Countries Seeking Investment With Erdogan While Neglecting Sisi?

It was ironic that the media in the United Arab Emirates and Saudi Arabia showed hostility toward Turkish President Recep Tayyip Erdogan, wishing for his defeat in the presidential elections, only to completely reverse their stance and rush to invest in Turkiye after his victory.

Not only was there irony in the fact that these projects were signed following Erdogan's re-election for another presidential term until 2028, but the scale of these deals was also noteworthy, amounting to a considerable sum of $90 billion, as reported by international media.

Another irony lies in the fact that these investments come at a time when Abu Dhabi and Riyadh continue to refuse to intervene to save Egypt's economy, despite their support for the leader who led the coup on July 3, 2013, and protected their thrones from the winds of the Arab Spring.

Their disregard for supporting the Egyptian regime led by Abdel Fattah el-Sisi is evident, as they have halted grants and even refused to purchase limited shares of Egyptian assets amounting to $2 billion, as part of the International Monetary Fund's rescue plan, according to Bloomberg on May 23, 2023.

 

Investments and Embraces

The United Arab Emirates seized the opportunity to hop on the Turkish train when the UAE's Minister of State for Foreign Trade, Thani al-Zeyoudi, announced on Twitter on May 31, 2023, UAE approval of a cooperation agreement aimed at raising bilateral trade with Turkiye to $40 billion within five years.

Prior to that, Ankara and Abu Dhabi signed a currency swap agreement worth $4.7 billion for a duration of three years on January 19, 2022. This move was viewed by experts as significant support for the Turkish currency and foreign reserves.

Abdulkhaleq Abdulla, the advisor to the Emirati presidential palace, was keen to highlight that Abu Dhabi had entered into agreements worth $40 billion with Turkiye "in the first week following President Erdogan's election." It was as if he was implying that the approvals were delayed until his victory was confirmed.

Mohamed bin Zayed signed "comprehensive economic partnership" agreements with Turkish President Recep Tayyip Erdogan during a virtual summit held on March 3, 2023. However, these agreements were possibly delayed until the elections result.

Turkiye approved the agreement in April 2023, but Abu Dhabi's approval remained pending until al-Zeyoudi and Abdulla announced their approval following Erdogan's victory.

At that time, Mohammed bin Zayed stated that the agreement aimed not only to stimulate bilateral trade, investment, and shared economic growth but also to establish a genuine development partnership, build common interests, and strengthen stronger and more resilient strategic relations between the two countries.

The agreement focused on strategic sectors such as agricultural technology, food security, and clean energy, as well as cooperation in construction and real estate projects.

During a video meeting with bin Zayed on March 3, 2023, Erdogan anticipated that the scale of trade with the UAE would reach approximately $25 billion, thanks to the comprehensive economic partnership agreement.

However, CNBC Arabia revealed on March 4, 2023, that the agreement aimed to increase the trade scale between the two countries to $40 billion over the next five years.

The total non-oil trade between the UAE and Turkiye amounted to around $19 billion in 2022, an increase of 40% compared to 2021 and 112% compared to 2020, making Turkey the fastest-growing trading partner among the top 10 trading partners of the UAE.

The matter was not limited to the "improvement" of relations and Abu Dhabi's support for the Turkish economy through deposits to the central bank and billions of dollars in investments. There were also talks of a transformation of relations into a "strategic" one, according to the Emirates News Agency on June 11, 2023.

In the first visit of a senior Emirati official to Turkiye following Erdogan's victory, bin Zayed visited Turkiye with a high-level delegation on June 11, 2023, and met with President Erdogan.

The Emirati news agency described Turkiye as a "friendly" country and spoke about the goal of the visit to enhance strategic relations and promote the comprehensive economic partnership between the two countries.

The situation even reached the point where bin Zayed embraced the Turkish president during their joint attendance at the UEFA European Championship in Istanbul following the victory of Manchester City, owned by bin Zayed's deputy, and they had dinner together at one of Istanbul's private restaurants.

Dr. Abdulkhaleq Abdulla, the advisor to the Emirati palace, described the visit of the UAE president to Turkiye and the Emirati–Turkish relations as being in their best state and transitioning from trade and investment relations to strategic ties.

Erdogan became associated with the Arab Spring, which Gulf regimes feared would have an impact on them.

Therefore, his downfall became an urgent desire for the ruling regimes in the UAE and Saudi Arabia.

During the Turkish presidential elections, the Emirati media launched an attack and a campaign of lies against President Erdogan, hoping that he would be defeated with the support of Western media.

The frustration of his victory was expressed by the Emirati palace advisor, Abdulkhaleq Abdulla, who commented on Erdogan's win by saying that he "won by only a 4-point margin."

He believed that "more than 47% of the Turkish people did not vote for him and do not want him as president," which drew ridicule on social media.

 

$50 Billion from Saudi Arabia

Shortly after the UAE announced its agreement with Turkiye following Erdogan's victory, Bloomberg confirmed in early June 2023 that Saudi Aramco met with "an army of Turkish contractors" to discuss projects worth $50 billion in the kingdom.

The agency saw this as confirmation of the improved relations between the two countries after overcoming their differences.

2022 marked a turning point in Saudi–Turkish relations after experiencing a cooling off in the previous years since 2018, particularly following the visit of Crown Prince Mohammed bin Salman to Ankara in July 2022.

This visit was preceded by the visit of the Turkish president to Saudi Arabia at the end of April 2022 and his meeting with the Saudi Crown Prince.

Following the improvement in relations, Erdogan and bin Salman agreed in June 2022 to enhance economic and defense cooperation.

Ankara defended Riyadh against American pressures, and former Turkish Foreign Minister Mevlut Cavusoglu described the US bullying of Saudi Arabia due to the OPEC+ decision to cut oil production as unacceptable.

He said that Americans can criticize the oil production cuts, but it is not right to threaten the kingdom.

According to Bloomberg's report, representatives of the state-owned oil company met with executives from around 80 Turkish construction companies to agree on implementing planned projects until 2025 in the kingdom.

Aramco's move followed other developments that reflected the improvement in trade and economic relations between Turkiye and Saudi Arabia after overcoming their differences.

This announcement was followed on March 6, 2023, by Saudi Arabia depositing $5 billion in the Turkish central bank to support the Turkish currency.

According to Egyptian economic analyst Mostafa Abdelsalam, the Riyadh government's decision to enter into such a massive agreement with Turkiye is a "remarkable development by the kingdom toward Turkiye." He pointed out that "mutual interests" between the two countries underlie these positive developments.

He explained that Aramco, one of the world's largest oil producers, owned by the Saudi state and the third-largest company in the world by market value after Apple and Microsoft, has expansion plans, including a $100 billion development project for the Jafurah field.

This is because the extensive scope of projects that Saudi Arabia plans to undertake across multiple sectors, such as oil and energy, requires the proficiency of international contracting firms, including those from Turkiye, according to Abdel Salam in an analysis published in The New Arab newspaper on June 4, 2023.

He said Turkish companies have long-standing experience, and Turkish contractors have executed 11,745 projects in 133 countries around the world from 1972 until May 2023.

The total value of these projects amounted to $479.5 billion, giving Turkiye a reputation in the global construction and infrastructure sector.

Saudi Arabia needs Turkiye's extensive expertise in contracting, industry, exports, infrastructure development, airport and port construction, and tunnels.

It also requires Turkish goods, products, and exports, which exceeded a value of $254 billion in 2022, with Saudi Arabia's share amounting to $5.1 billion.

On the other hand, Turkiye needs Saudi Arabia's extensive expertise in energy production, marketing, and export, especially with strong indications of massive oil and gas reserves in Turkiye, both in the Black Sea and off the Mediterranean coast.

 

Sisi Left Alone

In contrast to the investments poured into Turkiye following Erdogan's victory, Saudi Arabia, the UAE, and even Qatar suspended any grants or aid to Egypt.

They also hesitated to purchase Egyptian assets due to the military's dominance over the economy and the lack of guarantees against wasting their investments due to the army's mismanagement of the economy and corruption.

Egyptian analysts attributed the rush of the UAE and Saudi Arabia to invest in Turkiye rather than Egypt, despite their animosity toward the Turkish leader and their support for the coup in Egypt, to their realization that they are dealing with an advanced scientific system in Turkiye based on planning and transparency.

This is in contrast to the military's control over Egypt's economy and the prevalence of corruption and economic opacity.

According to the Financial Times on April 28, 2023, Egypt is facing difficulties in selling state assets because Gulf donors, including Saudi Arabia, the UAE, and Qatar, are less willing to provide traditional financial support and are seeking commercial investments instead.

The Wall Street Journal, on April 7, 2023, quoted officials from Egypt and the Gulf stating that Sisi's visit to Saudi Arabia to get financial aid failed, and the Gulf countries want something in return to save Egypt.

All of Egypt's wealthy Gulf neighbors express a desire for better returns on their investments.

Therefore, they have demanded that the Egyptian military reduce its intervention in the economy and give greater space to the private sector as a condition for Gulf countries to acquire Egyptian assets.