Erdogan accused of selling out Turkey’s most prized assets to Qatar

Doha’s purchase of stake in Istanbul stock exchange, the latest in a series of investments, sparks outcry

A member of the equities department sits beside digital screens displaying stock price information at the Borsa Istanbul SA stock exchange in Istanbul, Turkey, on Tuesday, Aug. 14, 2018. While they are growing more critical, the underlying tone of warnings from businesses has so far been supportive of the government in principle, showing there are limits to how much Turkey’s billionaires are feeling emboldened to speak out after elections in June increased President Recep Tayyip Erdogan’s grip on power. Photographer: Ismail Ferdous/Bloomberg
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Qatar’s purchase of a 10th of the Istanbul stock exchange sparked an outcry from Turkey’s opposition, which claimed President Recep Tayyip Erdogan is selling off the country’s prized assets to save the struggling economy.

The sale of the Borsa Istanbul stake to the Qatari Investment Authority was completed for an undisclosed fee when Qatari Emir Sheikh Tamim met Mr Erdogan in Ankara last week.

Other deals included a high-end shopping centre in Istanbul, a port in the Mediterranean city of Antalya and a development project on Istanbul’s Golden Horn waterway.

“We do not know how much you sold the 10 per cent shares of Borsa Istanbul for,” opposition leader Kemal Kilicdaroglu said, addressing Mr Erdogan in a TV interview at the weekend.

“Where does your love for Qatar come from? Everything is being sold. If they say tomorrow, 'We have sold half of the presidential palace to Qataris,' no one should be surprised.”

The latest surge in Qatari investment follows a pattern of growing ties between Ankara and Doha, which have accelerated over the past couple of years as the Turkish economy spiralled downwards.

Since agreeing to strengthen their strategic relationship in 2014, Qatar has invested heavily in Turkey.

In May, Doha tripled its currency-swap agreement with Ankara to $15 billion, helping to restore the reserves Turkey had burned through to defend the lira, which lost nearly 40 per cent of its value this year.

Figures provided by the Turkish embassy in Doha to Anadolu news agency show Qatari investments in Turkey are worth $22bn.

But the opaque nature of the stock exchange sale by the Turkey Wealth Fund raises questions.

“It’s a welcome measure that the borsa attracts foreign investment but the real issue is the lack of transparency,” said Can Selcuki, general manager at the Istanbul Economics consultancy.

“If this was a private company no one would care, but this is a public company owned by the public.

"Therefore, this transaction begs the question, how much was received for the 10 per cent, how was the valuation made, who was it done by?”

In nine other agreements last Thursday Qatar bought 42 per cent of the Istinye Park shopping mall for a reported $1bn, invested an unspecified amount in the Golden Horn Marina project and bought Antalya’s Port Akdeniz for $140 million.

While Qatar has poured cash into the Turkish economy, the two countries also have converging interests in the Middle East and North Africa, notably Libya, and Turkey has a large military base in the emirate.

Both states are supporters of the Muslim Brotherhood and espouse its ideology.

Mr Erdogan and the emir are said to have a close personal relationship.

Two years ago, Sheikh Tamim presented the president with a $500m Boeing 747, a present Mr Erdogan said was for the Turkish state.

The emir and his mother bought land along the route of the planned Istanbul canal, a scheme Mr Erdogan has championed to provide an alternative for shipping to the Bosphorus.

The proposal is widely opposed by environmentalists and civil society groups.

“Clearly, the relationship between Turkey and Qatar goes beyond the boundaries of a normal relationship between two countries,” Mr Selcuki said.