(This paper was produced in partnership with Asbab.)
The Saudi Fund for Development announced in a statement on Monday, March 6, that the Kingdom of Saudi Arabia has agreed to deposit $5 billion in the Central Bank of Turkey, describing the decision as “evidence of Saudi Arabia’s commitment to supporting Turkey’s efforts to boost its economy.” Commenting on the decision, Turkish Minister of Treasury and Finance Nureddin Nebati said that “this is a positive outcome that stems from the confidence of the Saudi Arabian administration in the Turkish economy.” A few days earlier, on Friday, March 3, Turkey and the United Arab Emirates signed a “Comprehensive Economic Partnership Agreement”, in a virtual ceremony attended by the heads of the two states, Recep Tayyip Erdoğan and Mohamed bin Zayed. While Erdoğan expressed his confidence in raising the volume of bilateral exchange to $25 billion within five years, the UAE government affirmed that the agreement would fulfill strategic and ambitious goals.
Towards a Long-Term Partnership of the KSA and the UAE with Turkey
- In one of our previous evaluations, we asserted that the level of economic assistance offered by the Kingdom of Saudi Arabia and the United Arab Emirates would reflect the extent to which these two countries value investing in a long-term relationship with Ankara. Even though negotiations related to the Saudi deposit and the Emirati agreement had been ongoing for months before the February 6 earthquake, the actual timing of their fulfillment cannot be separated from the current context, characterized by the economic burden that resulted from the earthquake – which could exceed $100 billion in direct and indirect losses, according to the United Nations Development Program – and by the most difficult elections since the Justice and Development party has ruled the country in 2002. In this framework, the Saudi deposit and the agreement with the UAE unquestionably indicate the intentions of Riyadh and Abu Dhabi to cement their relationship with Ankara rather than just ease tensions.
- Some observers believe that the move of Riyadh follows a clear agenda ahead of the Turkish Presidential elections on May 14. Furthermore, it demonstrates the importance of President Erdoğan for the Saudi Crown Prince and the Saudi support for his re-election, which is perceived as a necessary step to ensure that the agreements between both countries are nurtured. This is particularly true because the Saudis did not impose any conditions on Turkey for granting it a loan, while Riyadh is tightening credit conditions for other tormented countries, such as Pakistan, Egypt, Tunisia, and Bahrain. The Saudi decision to implement the agreement prior to the elections may indicate that Prince Mohammed bin Salman wanted to emphasize that the Saudi-Turkish partnership is deep-rooted at the state level and will not be impacted by the identity of the party that wins the upcoming elections.
- The normalization of Turkish-Emirati relations followed a swift and clear path, resulting in Abu Dhabi buying and receiving shipments of Turkish drones. In this context, Turkey’s entering the Comprehensive Economic Partnership Agreements can be translated into the UAE’s strategic commitment to the zero-problem policy that is based on strengthening trade ties with regional powers. While the pace of recovery of Saudi-Turkish relations was slower, it is evident that the major players in the Islamic world and the region have agreed on developing their relations, at least in the medium term. Accordingly, an inflow of Saudi investments into Turkey and an increase in trade activities between the two countries are expected. In return, Turkey is likely to show more commitment to responding to Saudi Arabia’s security needs, particularly those related to the joint military industrialization programs.
- Despite the mentioned, the Saudi-Turkish emerging partnership cannot be perceived as a rising regional axis or alliance because geopolitical rivalry prevails in their relationship. This is further cemented by Turkey’s rising influence in areas in the Middle East and the Islamic world that are considered by Saudi Arabia as its primary sphere of influence.