Erdogan visits UAE as trade and political ties deepen

Turkish President Recep Tayyip Erdogan will hold talks with the de facto ruler of the United Arab Emirates in Abu Dhabi on Monday as the longtime Middle East rivals aim to unlock billions in trade and investment. 

The meeting between Crown Prince Sheikh Mohammed Bin Zayed Al Nahyan and Erdogan is the second in just three months, after years of hostility between their countries over the role of Islamist groups in the 2011 Arab Spring uprisings. Erdogan’s visit, reciprocating Sheikh Mohammed’s trip to Turkey in November, is expected to yield a series of accords, including a letter of intent regarding defense industry cooperation, according to the Turkish president’s office. 

The countries are also expected to sign memorandums of understanding for cooperation in investment, agriculture, industry, high tech and other areas, plus an agreement to collaborate on land and marine transportation, the Turkish president’s office said. 

The UAE, a small but influential oil-and-business powerhouse, signed a $4.9 billion currency swap with Turkey in January, and has outlined plans for a $10 billion fund to support investments as it seeks to at least double bilateral trade. Turkey was the UAE’s 11th-biggest trading partner in 2020, with $8.645 billion in two-way commerce in 2020, according to data compiled by Bloomberg. 

Catalyzing the recent thaw in relations is financial tumult in Turkey that’s sent Erdogan’s popularity plunging, and the growing challenge from Saudi Arabia to the UAE’s standing as a global business and financial hub.

Abu Dhabi wants to benefit from Turkey’s logistical ties with the rest of the world, its investments in the industrial sector and its skilled labor, the UAE’s minister of state for foreign trade told Bloomberg News in January. 

Turkey is battling inflation of almost 50%, and a lira that lost as much as half its value against the dollar before the government intervened at the end of December to stem the currency’s decline. Fitch Ratings cut Turkey’s sovereign credit rating further into junk over the weekend.