Turkish President Recep Tayyip Erdoğan is sitting down with investors and businessmen in the United Arab Emirates on Tuesday; after signing a series of cooperation agreements with the country’s de facto leader.
Erdoğan is seeking to lure Arab money to Turkey’s frail economy, struck by a currency crisis that sent the lira tumbling by 44 percent last year.
The investment plan also reflects a strategy aimed at repairing broken ties with the UAE and other key regional players that have left Turkey politically isolated.
The Turkish president will also sit down with Emir of Dubai Sheikh Mohammed Bin Rashid Al Maktoum and will attend Dubai EXPO Turkey National Day events, Turkey’s state-run Anadolu news agency reported.
On Monday, Erdoğan arrived in Abu Dhabi for meetings with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan.
They signed a series of agreements spanning health, climate change, industry, technology, culture, agriculture, transportation and disaster management.
Relations between the UAE and Turkey have been strained for nearly a decade over Turkish support for political Islam after the Arab Spring and Ankara’s close ties to UAE regional rival Qatar.
Turkey has also clashed with the Emirates and other nations including Egypt and Israel over the future of Libya; natural gas resources in the eastern Mediterranean and its support for the Muslim Brotherhood and Hamas.
Tuesday’s meetings followed a visit to Turkey by Bin Zayed Al Nahyan in November.
The UAE, an oil rich country and regional financial hub, agreed to invest as much as $10 billion in Turkey at those talks.
It also signed a $4.9 billion currency swap agreement with Ankara in January to help Erdoğan stabilise the lira; which slumped to successive record lows after he ordered the central bank to cut interest rates in the face of surging inflation, which now stands at almost 50 percent.
UAE investors see the lira’s losses as a possible opportunity to buy up Turkish assets at a reduced cost. But international concerns persist about economic stability in the country.
Last week, ratings agency Fitch cut Turkey’s sovereign debt further into junk territory warning of financial instability ahead of presidential elections slated for 2023.
Erdoğan and his ministers say the troubled times for the lira are over thanks to an economic programme focused on production and exports.
The lira has stabilised in 2022 after Erdoğan announced a plan to link lira deposits to the dollar and interventions in the currency market by the central bank.
The lira was trading little changed at 13.59 per dollar on Tuesday.
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It hit a record low of 18.32 per dollar in late December amid panic selling by Turks concerned about their savings.
A cooperation deal between Turkey’s sovereign wealth fund and Abu Dhabi Developmental Holding Co., signed in November; may constitute the main conduit for UAE investment in Turkey.
The Turkey Wealth Fund was established in 2016 and comprises the country’s largest state-run enterprises; which the Treasury previously controlled.
Erdoğan became its chairman in 2018.
It was Mohammed Hassan Suwaidi, the CEO of Abu Dhabi Developmental Holding Co.; who announced that the UAE had set aside the $10 billion in funds.