Turkey and UAE: paving the way for a strategic economic partnership
Almost a year ago, I was granted access to senior government officials from the United Arab Emirates (UAE) and had a chance to discuss a range of issues with them, including but not limited to an unprecedented gold sale to Iran to circumvent US financial sanctions via Turkey and the UAE.
I realized then and still understand today that there are simply too many common interests between Turkey and the UAE for both countries not to coordinate and cooperate closely on a range of issues. On both sides, there are people who realize the value of this strategic partnership and lobby hard to flesh it out with substantive projects. Yet, there are some circles in both countries that seem to have positioned themselves to derail these growing ties between the two countries and obstruct further development.
Our divergent positions on the military coup in Egypt, which saw the overthrow of the first democratically elected president and former Muslim Brotherhood (MB) member Mohammed Morsi from power, have provided ample opportunity for the anti-Turkish and anti-Emirati blocs to seize and exploit the sensitivities that exist in their countries. The manifestly ill-advised tactical move on the part of the Abu Dhabi National Energy Company (TAQA) -- the state-owned oil exploration and energy supply company -- in postponing a $12 billion coal-powered plant project until 2014, citing other spending priorities in August, is a clear signal that this lobby has gained the upper hand in the Abu Dhabi government at the expense of those who advocate closer ties with Turkey. The same lobby successfully pressured the UAE's central bank in July to ask local commercial banks to provide details of their financial exposure to Turkey, interpreted in Turkey as a warning shot across its bow.
First of all, the reasoning that Turkey will be swayed one way or another simply by canceling a multi-billion-dollar project that currently exists only on paper is devoid of any logic, considering that Turkey, with a consumer market of 76 million people and a burgeoning economy, can easily replace the UAE's investors with others. Turkish Energy Minister Taner Yıldız already announced that two other groups have expressed an interest in taking over from TAQA. Yet the incident served as an opportunity for the anti-Turkish lobby in the UAE to advance its cause. Secondly, playing politics in trade and investment has dealt a blow to the UAE's credibility as a reliable partner. In other words, this lobby served the interests of neither Turkey nor the UAE.
In my conversations, I distinctly remember the way in which UAE officials emphasized that the Abu Dhabi government did not resort to banning the transfer of capital from the country during the 2008 financial crisis, unlike some other countries, because they wanted to protect the UAE's credibility in spite of the brutal meltdown in the financial markets. Both Sheikha Lubna al-Qasimi, the UAE's minister of foreign trade, and UAE Central Bank Governor Sultan bin Nasser al-Suwaidi mentioned that the Abu Dhabi government considered a ban but dropped the idea in favor of long-term strategic calculations. The UAE had to inject $32.7 billion of liquidity into domestic banks while saving troubled Dubai with a financial lifeline and debt restructuring. Therefore, it was clear that an influential group of rulers in the UAE wanted to give the consistent message to investors and partners that their stake in the UAE was not in jeopardy.
Drawing an analogy from this, I would say there is a sizable group in the UAE that wants to protect and in fact strengthen their country's relationship with Turkey, despite the misgivings and apprehensions that were fostered by the anti-Turkish bloc among the Emiratis. The pro-Turkey advocacy group is not comfortable with the false signals the UAE sent to Turkey with the TAQA deal and other decisions, because they believe these have put the UAE's commitment to investment ties with Turkey at risk and also dealt a blow to the credibility of the Emiratis. Resorting to hasty punitive measures to make a political point has created an impression in the Turkish capital that the UAE is not truly sincere in its overtures to Turkey.
There are two factors exerting pressure on the UAE's federal government to shy away from Turkey. For one, the influential pro-Iranian business establishment, mostly concentrated in Dubai, sees Turkey as a rival to their burgeoning legal and illicit trade with Iran. Powerful families of Iranian descent based in most of the Emirates have been vocal advocates of cozying up to Iran because the multi-billion-dollar trade deals they run with Iranian companies across the Persian Gulf are at stake. This lobby has quickly seized on the different stances of the two governments on Egypt, hoping that it will drive a wider wedge between Turkey and the UAE.
Secondly, a total misreading of Turkish domestic politics by the Emiratis has also aggravated tensions between Ankara and Abu Dhabi. Turkey's strong reaction to the military coup in Egypt stems mainly from the suffering of the Turkish people during their four successive military coups after 1960, all of which came with terrible political, economic and social costs. In other words, Turkey saw a reflection of itself when looking at the coup in Egypt, and the stern messages uttered by Turkish officials were mostly catering to their domestic constituency rather than bashing the military rulers of Egypt or their backers. Politicians seized on the sensitivities of the Turkish people across the political landscape to score points before the election year of 2014.
Compounding the picture for Emiratis is the perceived tendency on the part of the ruling Justice and Development Party (AK Party) government to closely associate itself with the MB, whether in Egypt or in Palestine. This activated some lingering fears in the Abu Dhabi government, which has always looked on the MB with suspicion. It is true that some in the AK Party government may feel close to the MB, but this is not the official government position, as this government also worked closely with Hosni Mubarak. Data from polls taken recently in Turkey suggest that only 2 percent of the population described itself as "Islamist" while the majority were simply "conservative" or "practicing Muslim." In fact, the AK Party government is an umbrella political party encompassing many colors of Turkish society, from liberals to conservative segments. Therefore, associating the Turkish government entirely with the MB is an utterly false conclusion and one that might lead to unwise policies on the part of the UAE government.
At stake are larger strategic considerations for Turkey and the UAE, which may become victims of these misunderstandings. Only in recent years have Turkey and the UAE, both frontline countries against the Iranian "imperial" expansionism that was largely hidden behind politically charged revolutionary Shiite ideology, started to foster ties. Ankara and Abu Dhabi have worked closely on Libya and Tunisia and are still working together on Syria and other cases. It would be a shame to make an abrupt halt to this very promising and highly strategic partnership. I believe our political commitment, though shaken a little in recent months, is still strong, as the leaderships on both sides have refrained from openly criticizing each other's stances on the Egyptian coup.
The economic dimension of relations is also strong, as the trade volume jumped over 2,000 percent in one decade from a little over half a billion dollars in 2002 to almost $12 billion in 2012. In the January-July period of this year, according to the latest available data from the Turkish Statistics Institute (TurkStat), the trade volume increased 51 percent, making the UAE Turkey's 10th-largest trading partner. In the cultural dimension, there are also promising signs. For example, Turkish soap operas are still popular in the UAE. The Middle Eastern Broadcasting Corporation (MBC), unlike its peers in Egypt, did not even consider suspending popular Turkish soap operas, saying that it did not feel the need to make any changes to its broadcasts of Turkish dramas because Arab audiences still wanted to watch them.
Unfortunately, the only thing that is lacking in this very promising relationship is a sufficient workforce that can speak both languages and understand both cultures, including each side's sensitivities. For that, both Turkey and the UAE share the blame because they have not invested enough, if at all, in the past on educational, professional and cultural exchange programs. More often than not, journalists, experts and even diplomats see each other through a prism of foreign perspectives that may or may not reflect the truth. Changing this is going to be a long trek, but if we start today, we may have better prospects for a sustainable and healthy relationship between Turks and Emiratis. In time, we may even develop a more influential lobby of Turks and Emiratis in both capitals, which will insure the relationship against the negative effects of future crises.
By: Abdullah Bozkurt
- Egypt passed the economic conference with flying colours, but what's next?
- Why the GCC really needs a VAT tax
- Selfies, jokes, and billions: Sisi 'boisterous' after economic summit, but the hard part has just begun
- 'Open for business': what did the World Bank have to say about Egypt's economic conference?
- Egypt's Economic Conference: formidable expectations, formidable challenges
- UAE's Emirates ID projects pave way for future eCommerce economy
- GENBAND and Verscom Managed Services Strategic Partnership
- Spain and the MEASA region strengthen economic ties through strategic DIFC and Madrid Centro Financiero partnership
- Aramex closes key acquisitions and forms Joint Ventures in Asia and Turkey