When politics means business: will GCC-Turkish tensions leave their mark on commercial ties?
Despite their opposing positions on developments in Egypt, the tension in the economic relations between Turkey and the Arab Gulf counties is expected to be “very short”, a Turkish economic analyst said.
At the end of the day, “politics is politics and business is business,” said Ahmet Kayhan, Founder and CEO of Reiden.com, an international real estate information company focusing on emerging markets.
“If you think about the relationship between Turkey and GCC, they are very strong. There has never been a direct clash,” he added in an interview with Gulf News.
While acknowledging the existence of a “certain level of tension (between the two) at this stage just because of Muslim Brotherhood in Egypt”, Kayhan added “99 per cent of the (Turkish) policy measures are in line with the Gulf nations’ policies,” on many other issues including the situation in Syria, regional and international issues related to Iran, and the Palestinian question.
The economic ties between Turkey and Gulf states were passing through a high when the Egyptian military ousted President Mohammad Mursi and seized power. The Gulf states welcomed the move which followed the arrest of cells that were accused of planning to destabilise their security. But Turkish Prime Minister, Recep Tayyip Erdogan, continued to call for the reinstatement of Mursi since he was elected by the people.
Political differences has negatively affected the economic relations, the size of the GCC investments in Turkey, and also led to a decline in the number of Gulf tourists to Turkey, sources told Gulf News.
Yet, Kayhan strongly believes it will be only “short term”, and the impact will be “minor”, taking into consideration the advantages of the Turkish economy, including the country’s stability, “strong” foreign policy and an economy that is “relatively better than most of the emerging markets.”
Turkey, according to the economic analyst, “has much more tension with Russia but the business is going on”. The two countries took different positions on the situation in Syria. Yet, the two countries have signed in the past few years numerous deals worth of billions of dollars.
Turkey and Russia also signed a multi-billion dollar nuclear power plant deal which will be built by Russian company Atomstroyexport.
Meanwhile, Turkey continues to attract investors in real estate. According to a Turkish-based property consultant, the value of foreign investment into Turkish housing will be as much as $5 billion (Dh18.365 billion) a year for the coming years.
Tolga Han, International Vice-President of “Projebeyaz” International, was quoted as saying in a press statement “recent reports estimate that following the regulation of reciprocity that passed in 2012, between 10-12,000 housing units will be sold to foreigners valued at $2.5-3 billion during the initial years and $4-5 billion annually for later years.”
Asked about his expectations, Kayhan added there is “a potential” in the Turkish market to absorb the anticipated huge amount of investments in the real estate. However, the “channels” are not “mature enough”. They include a certain level of retail investment. Also, the size of the corporate foreign investment is still small compared to the size of the market.
According to the the Vision of 2023 published by Turkish real estate conglomerate Gyoder, a further 7.56 million urban residential units will need to be added to the market between 2012 and 2023.
By: Jumana Al Tamimi, Associate Editor