On Wednesday President Recep Tayyip Erdoğan had an important guest. Abu Dhabi’s Crown Prince Mohammed bin Zayed (MBZ) was in Turkey to make a fresh start in relations.
The crown prince’s trip to Turkey is the first in nine years since relations were frozen in 2012. Turkey and United Arab Emirates (UAE) have been on opposing sides in regional conflicts and have distanced themselves from each other.
That is why this visit can be a beginning of a new era following years of distancing and atrocities. Ankara blamed UAE for backing the 2016 coup attempt by the Gülenist Terror Group (FETÖ) and for siding against Turkey’s interests in Libya.
However, the disputes and differences seem to have been set aside.
UAE Minister of Industry and Advanced Technology Dr. Sultan Al Jaber, who was part of the delegation accompanying MBZ, gave an interview to TRT, the Turkish state broadcaster, and said that this visit is significant in a number of ways. First of all, the two countries will work on a vision for a more peaceful, stable and prosperous future for the region.
Secondly he added that MBZ aims to create economic value through enhancing trade, investments and creating new partnerships.
It seems that both countries have seen that it is in their interests to cooperate rather than remain in conflict.
The UAE has set aside a $10 billion investment fund for Turkey. It is a good amount to boost the economy, which has been crumbling due to fluctuations in the currency rates these last few days.
The economic model
Erdoğan declared that Turkey will shift from an interest-based to an investment-based model in the economy. To accomplish it, the rates have been decreased by the Central Bank of the Republic of Turkey (CBRT), which affected the foreign currencies in the short term.
Turkey was once a good haven for making money in the banks. Many people bought dollars in the days when high Turkish currency was at stake, changed them to liras, gained value through high interest rates, then took the money and left.
Erdoğan believes that these high interest rate policies have slowed down investments and growth.
Now Erdoğan's government wants to try the other way. This shift in policy affects the market. The currencies are fluctuating very fast and the market feels shaky. But the government believes that this is only a transition period and the balance will be achieved soon.
We will wait and see. I believe that Turkey needs continuity in economic policies. If this decision is taken it should be given enough time to see the results so Ankara should be patient.
On the other hand, inflation rates are rising globally and this affects Turkey more than the other countries since it has its own inflation issue as well. So the UAE visit is very important in these circumstances.
The UAE has large investments in the Turkish defense sector and it wants to enlarge them even further. The Turkish defense industry has been growing lately and Turkey has become an important exporter in this field.
At the recent visit, agreements for cooperation in trade, energy and environment were also signed. So we can easily say that there is a new boom in relations. This can encourage other foreign investors to come and make business in Turkey.