Turkish businesses hope deepening economic ties with Qatar will help alleviate economic crisis

Turkish businesses are hopeful that deepening economic ties with Qatar will alleviate Turkey’s economic crisis, which has seen businesses struggling with inflation and a weak currency, following Turkish President Recep Tayyip Erdoğan’s recent visit to Doha earlier this month, Al Jazeera reported on Friday.

The report noted that Qatar is already the second-largest foreign investor in Turkey, where it has a major stake in banking, retail, and shipping. Doha’s foreign direct investments in Turkey are valued at $33.2 billion. They are spread over several different sectors in that country.

Qatar Holdings, for example, has a 42 percent stake valued at almost $1 billion in the Istinye Park shopping mall in Istanbul. The Qatar Investment Authority also has a 10 percent stake in Borsa Istanbul, the largest stock exchange in Turkey. Also, since 2020, Doha has provided $15 billion in currency swaps for Ankara, giving Ankara a lifeline at a time when the lira is plummeting in value.

Although bilateral trade between the two countries was modest, it dramatically increased when Qatar was subjected to a blockade by its neighbours for three-and-a-half years beginning in 2017.

Turkey and Qatar signed over a dozen agreements during Erdoğan’s Dec. 6-7 visit when he met Qatar’s Emir Sheikh Tamim bin Hamad Al Thani.

The two countries have had close ties for years now. They supported the same sides in conflicts in Syria and Libya and are seeking to cooperate in projects in Afghanistan since the Taliban regained control in that country in August.

During the blockade against Qatar, Turkey sent cargo planes and increased its troop presence at its military base in that small country, a clear show of support to Doha during that crisis.

“What makes their alliance unique is that their overseas policymaking is overlapping,” Betul Doğan-Akkaş, an associate fellow at the Al Sharq Strategic Research Center, told Al Jazeera. “We can say it’s partly because of political pragmatism for both of them, but there also must be a deep motivation to have cooperation in all these different cases.”

Doğan-Akkaş said that Turkey’s economic crisis is partially the result of global perceptions of President Erdoğan. Consequently, when the Turkish leader is seen meeting regional leaders or being accepted, that positively affects Turkey’s economy.

When Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan (MBZ) visited Ankara last month, he brought a $10 billion investment pledge. His visit also helped temporarily shore up Turkey’s beleaguered national currency.

“Even when MBZ visited Ankara – although he was not someone like Al Thani, a long-standing support of Erdoğan – his meeting had a positive effect on the Turkish economy,” Doğan-Akkaş said. “So when someone like Emir Al Thani and Qatar in general are seen supporting Turkey, that means a lot politically, and in terms of practical financial support, in addition to their investments and contribution to trade volume.”

Qatar is not only a large customer of Turkish military hardware. Doha also invests heavily in Turkey’s defence industry.

“When someone is invested in your defence industry, you literally cannot have political problems with them,” Doğan-Akkaş said.

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