Qatari investment in Turkey: where is Doha's money being spent?

Qatar's purchase of a stake in the Istanbul stock exchange last month sparked outcry as the country pumps large sums of money into Turkey

Flags decorate the working areas of traders as they monitor financial information on the floor of the Borsa Istanbul, the stock exchange in Istanbul. Bloomberg
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Qatar’s purchase of a 10 per cent stake in the Istanbul stock exchange last month drew attention to the huge amounts of money being pumped into the Turkish economy by its Gulf ally.

The $200 million deal between the Turkey Wealth Fund and the Qatar Investment Authority (QIA) was one of 10 agreements signed when Qatari Emir Tamim Al Thani visited Ankara on November 26.

During the visit the QIA snapped up a 30 per cent stake in Istinye Park, a luxury shopping centre in Istanbul, for a reported $300m from Dogus Holding, a company that has been hard hit by the fall in the lira's value this year.

Meanwhile, QTerminals, a partly state-owned Qatari port operator, spent $140m on the contract for Antalya’s Port Akdeniz from Global Ports Holding.

An unspecified amount was invested in Istanbul's Golden Horn Marina project while agreements were signed on trade promotion, economic co-operation and diplomatic exchanges.

While trade between the countries rose 6 per cent last year, Qatar’s investment in Turkey amounted to $22 billion at the end of 2019, making the gas-rich emirate the second biggest investor in Turkey after the Netherlands, which has $33bn invested in Turkey.

More than two thirds of Turkey’s $150bn foreign direct investment comes from Europe, a pattern of investment that dates back decades. Qatari financing, meanwhile, reached nearly 15 per cent of total foreign investment in Turkey over the past five years.


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Qatar has also helped Turkey after it burnt through its foreign reserves trying to shore up the faltering lira this year, tripling its currency swap to $15b nin May.

Doha’s stake in Turkey is highlighted by the Qatar-owned QNB Finansbank, which was valued at $42bn earlier this year, more than the combined value of all of Turkey’s other listed banks.

Qatar National Bank acquired the lender, which has about 650 branches in Turkey, when it paid $2.94bn for the National Bank of Greece’s 99.81 per cent stake five years ago.

In 2016, the Commercial Bank of Qatar bought out Turkey’s ABank when it purchased the remaining 25 per cent of stock for $222.5m.

Investment in the banking sector is mirrored across the Turkish economy.

The beIN Media Group stamped its mark on the TV market when it bought satellite broadcaster Digiturk for an estimated $1.5bn in 2016, giving it the rights to show Turkish and foreign sports. At the time Digiturk was the country's leading pay-TV operator with 3.3 million subscribers.

Qatar entered the media sector eight years earlier when Lusail International, a subsidiary of the QIA, partnered with Calik Holding to buy the Sabah-ATV media group for $1.1bn.

At the time, Calik was headed by President Recep Tayyip Erdogan’s son-in-law Berat Albayrak, who went on to become Turkey’s finance minister. Lusail later sold its 25 per cent holding.

However, it is Qatar’s growing stake in the defence industry that has caused most controversy in Turkey, which has sought to reduce its reliance on foreign weaponry in recent years.

Nearly half the stock in BMC, a commercial and military vehicle manufacturer, was sold to the Qatar Armed Forces Industry Committee in 2015 for $300m, going into partnership with Turkish businessmen with close ties to Mr Erdogan.

Over the following years, BMC benefited from generous government incentives, such as the controversial offer of a 25-year, $50m lease on Turkey’s largest tank factory to produce the Altay battle tank.

Meanwhile, Qatari investors have been busy buying up mansions along the Bosphorus as well as building villas and hotels along the Turkish coastline.

According to Turkish Deputy Foreign Minister Yavuz Selim Kiran, about 170 Qatari companies were operating in Turkey at the start of the year.