Turkey’s Erdogan embarks on Gulf tour to attract investment

Turkey’s President Recep Tayyip Erdogan will visit Saudi Arabia and the United Arab Emirates this week as he looks to attract foreign investment to support the embattled economy.

Erdogan’s trip from Monday to Wednesday also includes Qatar.

It follows his reelection victory in May to extend his rule into a third decade. Since then, he’s altered some economic policies in a bid to end a cost-of-living crisis and looked to improve relations with the GCC countries.

Turkey’s bid to attract investments

Turkey is trying to attract $25bn in investments from Gulf countries, Turkish officials familiar with the matter have previously said. Erdogan will be accompanied by more than 100 businessmen looking to secure cooperation deals, according to the Trade Ministry.

On Sunday, Erdogan’s government hiked fuel taxes by almost 200 per cent. While the move may worsen inflation already at 38 per cent and further hit households, it comes as Turkish officials seek to stabilise public finances and ease a record current-account deficit.

Erdogan’s unorthodox policies — which have included keeping interest rates low — have led to an acceleration in inflation and driven away many Western investors. The Gulf nations have emerged as contenders to bridge the investment gap.

The UAE, Saudi Arabia, and Qatar have already provided foreign exchange to the Turkish central bank through swap agreements and direct deposits.

The president has sought to improve relations with Riyadh in the past two years. “All dimensions of bilateral relations will be reviewed,” though there will be a special focus on the economy and investment projects, Erdogan’s office said in a statement ahead of the trip.