Turkish President Recep Tayyip Erdogan landed in Abu Dhabi on Tuesday looking to forge stronger ties with the UAE.
Mr Erdogan and his delegation were greeted by Sheikh Mansour bin Zayed, Vice President, Deputy Prime Minister and Minister of the Presidential Court.
Also welcoming him were Sheikh Hamdan bin Mohamed, Sheikh Mohammed bin Hamad, Adviser for Special Affairs at the Ministry of the Presidential Court, Mohamed Al Suwaidi, Minister of Investment, and Saeed Al Dhaheri, UAE ambassador to Turkey.
Mr Erdogan is due to meet President Sheikh Mohamed on Wednesday, the final day of his tour of the Gulf.
Talks are expected to build on ties forged when Sheikh Mohamed visited Ankara in November 2021 and pledged a $10 billion fund to invest in Turkey's economy.
The two leaders last met in June after Mr Erdogan's re-election.
A number of deals and agreements are expected on Wednesday. Mr Erdogan has sought to improve diplomatic ties and friendships with Gulf nations after disagreements over the past decade.
Turkey, with its substantial population, manufacturing base and location at the crossroads of Europe and Asia, is seen as a natural partner for business-minded Gulf nations.
Last week, Mr Erdogan said the tour would provide an opportunity for him to personally see the support that Gulf countries provide for Turkey.
“There are pledges from the Gulf countries, during our past meetings, to pump large investments into Turkey and we will put the finishing touches during our next tour,” he said.
Mr Erdogan said senior Turkish officials had visited Saudi Arabia, Qatar and the UAE to prepare for his tour.
Turkish President Erdogan's visit to the Gulf region - in pictures
Before taking off from Istanbul, Mr Erdogan said the visit had two main priorities – “investment and a financial dimension”.
“Turkey will have a serious investment opportunity in the defence industry, infrastructure and superstructure investments in the three countries,” he said.
“In addition, these countries will have the opportunity to purchase certain assets from Turkey.”
An official reception was held in honour of Mr Erdogan on his arrival in Saudi Arabia on Monday, the first stop of a three-day tour.
The two sides signed deals across various sectors, including in the fields of defence and investment, Saudi Arabia's news agency Spa said.
Sheikh Mohamed was among the first world leaders to meet the Turkish President after his re-election.
The UAE President was accompanied by ministers and officials, including Sheikh Mansour and Dr Sultan Al Jaber, Minister of Industry and Advanced Technology.
“The two leaders discussed their shared interest in advancing sustainable economic growth and social development, and explored opportunities for further collaboration in focus areas including the economy, advanced technology, renewable energy, transport and logistics, manufacturing, tourism and culture,” state news agency Wam reported at the time.
Long-standing ties between nations
Relations between the UAE and Turkey go back several decades.
UAE Founding Father, the late Sheikh Zayed bin Sultan Al Nahyan, paid a visit in 1984 in what was as a milestone moment in Arab-Turkish relations, making headline news across the Middle East.
Non-oil trade between the two nations reached about $19 billion last year, a jump of 40 per cent from 2021 and of more than 100 per cent from 2020.
This made Turkey the fastest-growing partner among the top 10 trade partners of the Emirates.
The UAE announced the establishment of a $10 billion investment fund in Turkey in November 2021. The focus of the fund was on strategic investment, most notably in the logistics, energy, health and food sectors.
The two countries have recently expanded air links, with Emirates, Etihad Airways, flydubai and Air Arabia connecting Dubai and Abu Dhabi with destinations such as Istanbul and Ankara, and some of the popular resorts on Turkey's south coast.
Plans to operate 10 weekly flights from Abu Dhabi to Istanbul were recently announced by Etihad.
Emirates also has strong presence in Turkey, with 21 weekly flights to Istanbul operated using Boeing-777 and Airbus A380 planes, as well as two flights in partnership with flydubai.
Air Arabia also has 50 weekly flights to Turkey. Most of these, 45 in total, depart from Sharjah International Airport, while the rest take off from Abu Dhabi International Airport.
Flydubai's network has grown to five destinations, including Ankara, Bodrum, Trabzon and Istanbul.
The airline has increased operations for the busy summer travel period.
Between June and September, flydubai will have operated up to 102 weekly flights between Dubai International and the five areas it serves in Turkey.
Wizz Air Abu Dhabi started flights to Antalya early last month, running on Tuesdays, Thursdays and Saturdays, as part of the summer season.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Rating: 3.5/5
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Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
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