Erdogan looks to Gulf investment with Kuwait airport project

The visit to Kuwait and meeting with the emir was aimed at further strengthening the security and economic ties that have brought Ankara and Gulf capitals closer in recent years.

The Emir of Kuwait Sheikh Sabah Al Ahmad Al Jaber Al Sabah with Turkish President Recep Tayyip Erdogan at Kuwait international airport in Kuwait City. Erdogan said trade with Kuwait had yet to reachShow more

ABU DHABI // The Turkish president visited Kuwait on Tuesday to inaugurate a new airport terminal being built by a Turkish firm and for talks with Kuwait’s emir.

The meeting was aimed at further strengthening the security and economic ties that have brought Ankara and Gulf capitals closer in recent years.

Peace in the world “depends on the stability in our region”, which “depends on our resolute stance”, Recep Tayyip Erdogan said at the groundbreaking ceremony with Emir Sheikh Sabah Al Ahmad Al Sabah for the new main terminal and expansion project at Kuwait International Airport. The US$4.3 billion (Dh15.8bn) project was awarded to one of Turkey’s largest construction firms, Limak Holding. The expansion is the biggest project to date for a Turkish company in Kuwait.

At the ceremony, Mr Erdogan called on Kuwaiti businesses to increase their investments in Turkey from the current total of around $1.7bn, according to Turkey’s Anadolu state news agency.

After a period of tension between Turkey and GCC countries after the Arab Spring uprisings — over Turkey’s support for Islamist groups across the region — Ankara and the Gulf states have become more closely aligned in their regional outlooks and what is needed for stability. Iranian expansion, the threat of ISIL and mutual economic needs, in particular, have driven greater cooperation and coordination.

Emir Sheikh Sabah visited Turkey in March, where the two countries signed a number of bilateral agreements, including on Kuwaiti aid for Syrian refugees in Turkey, as well as military and economic cooperation.

Expanding the economic relationship is the backbone of the emerging partnership between Turkey and the Gulf, and Mr Erdogan's main goal in his talks with Kuwaiti and other Gulf leaders is ensuring trade partnerships and investments, observers said.

On Monday, Mr Erdogan said that long-stalled talks on a GCC-Turkey free trade zone were underway. There are few available details of where the zone might be located, as there is expected to be tight competition among Gulf countries to house the zone that would include industrial production. A number of GCC countries have free zones and plan for them to be key components in their economic diversification plans. They are also looking to attract foreign investors.

For Turkey, strained relations with its Arab neighbours and Iran, as well as its current top trading partners in Europe — particularly Germany — have made it imperative to look to the Gulf.

“Turkey’s diplomatic row with European countries is having a detrimental effect on the country’s economy, as European investments are declining,” said Jana Jabbour, a political science and international relations professor at Paris’s Sciences Po university.

“President Erdogan, who knows that his party’s economic achievements were at the heart of his popularity, considers boosting the economy as his top priority and main challenge.”

Ankara is looking to repair and bolster ties with Asian powers Russia and China, but because of its Nato alliance with the US and European powers, “it is impossible for them to accept Turkey in the Shanghai Cooperation Organization, for example,” said Baris Doster, at Istanbul’s Marmara University.

“So there is only one [economic] chance in the hands of Turkey — it is the Gulf countries.”

Turkey probably sees Kuwait as a good place to focus on because economic ties between the two countries are already strong, and therefore easier to expand. Mr Erdogan said Turkish construction companies have projects worth $6.5bn in the emirate.

Kuwait is also looking to invest more in Turkey, and considers the country one of its priority investment targets, Ms Jabbour said.

As Gulf countries look to diversify their security relationships away from dependence on Washington, and expand their domestic defence production, Turkey’s arms industry is also likely to play a role in the economic relationship. Ankara is aiming to expand its defence industry to $25bn in exports by 2023, from $1.6bn last year.

Analysts caution that this target is unrealistic, however, given the structural and technical constraints in Turkey’s arms industry. “Although Turkey is trying to be a country which can export arms and defence goods, its capacity is not strong enough to export high-level items” like fighter jets, Mr Doster said.

Nevertheless, Turkey’s largest defence company and a Saudi investment fund have launched a joint defence company, Sadec, last year. And Turkey’s defence minister said earlier this year that Ankara was in talks with Riyadh for a defence export deal that would be his country’s largest ever. While fiscal austerity has made savings across the board key for Gulf countries, defence budgets in the GCC are still among the world’s largest, and Turkey may offer a competitive advantage on mid-tier items in terms of cost and willingness to jointly produce and share technology.

Turkey’s security and strategic ties with the GCC are expanding along with trade. Ankara is a key member of Riyadh’s Islamic Military Alliance to Fight Terrorism, and is building a permanent base in Qatar that will reportedly be staffed by 3,000 Turkish troops.

On regional issues, Turkey and Kuwait already coordinate on Syria. Turkey, Iran and Russia hosted peace talks in Astana last week that saw an agreement on “de-escalation zones” in Syria, and Mr Erdogan reportedly sought the emir’s assistance in helping finance efforts in these areas.