What is behind the spat between Turkey, led by President Recep Tayyip Erdogan, and Frence, led by President Emmanuel Macron? AFP
What is behind the spat between Turkey, led by President Recep Tayyip Erdogan, and Frence, led by President Emmanuel Macron? AFP
What is behind the spat between Turkey, led by President Recep Tayyip Erdogan, and Frence, led by President Emmanuel Macron? AFP
What is behind the spat between Turkey, led by President Recep Tayyip Erdogan, and Frence, led by President Emmanuel Macron? AFP

Turkey-France rivalry: what's behind Paris and Ankara's war of words?


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A war of words between Turkey and France focusing on the Libyan conflict has raised wider concerns about the potential damage to Nato and the role of foreign powers in the fractured north African state.

Tensions between Ankara and Paris heightened in recent weeks as French and Turkish officials traded barbs over their countries’ roles in Libya, where the Nato allies support opposing sides.

French President Emmanuel Macron on Tuesday described Turkey’s support for the Tripoli government as “criminal for a country which claims to be a Nato member”. He also criticised Ankara for fuelling the war by importing Syrian militias.

In an earlier exchange, Turkish Foreign Minister Mevlut Cavusoglu accused France of seeking to divide the country in order to “go back to old colonial times”.

Karol Wasilewski, head of the Middle East and Africa programme at the Polish Institute of International Affairs, said Turkey and France were divided by different security concerns in Libya, as well as Syria.

“These different threat perceptions between France and Turkey are a huge challenge for Nato, and not only because now we have the two allies looking at each other as rivals,” he said, adding that France “apparently considers Turkey to be a bigger threat to Nato than Russia”.

France, Russia and Egypt support the eastern-based forces while Turkey, Qatar and Italy back Tripoli.

Ankara-based political analyst Ali Bakeer said Turkey enjoyed broad support in Nato amid fears of Russian encroachment in Africa.

“I don’t think Nato will go along with France on this matter because of the Russia threat,” he said.

Emre Kursat Kaya, a security analyst for the Centre for Economics and Policy Studies in Istanbul, said economic and strategic interests lay at the heart of the split.

“In recent years, Turkey increased its footprint in sub-Saharan Africa through both soft and hard power,” he said. “Paris sees sub-Saharan Africa as its influence zone and sees the Turkish presence through a negative lens.”

The fall-out over Libya widened as France demanded EU talks on Turkey’s long-standing aspirations to join the bloc, with Foreign Minister Jean-Yves Le Drian calling for a “comprehensive” discussion on the relationship.

Nato, meanwhile, is investigating an incident earlier this month in which Turkish warships allegedly prevented a French frigate from inspecting a Turkish merchant ship suspected of smuggling arms to Libya.

The dispute over Libya follows France’s criticism of the Turkish incursion into northeast Syria in October that saw Turkish forces target Kurdish forces that had combated ISIS.

Franco-Turkish animosity also emerged earlier this year when Mr Macron announced plans to curb foreign influence among France’s large Muslim population. He said Turkey had been the only country not to agree to the plan to stem “separatism” emanating from mosques and language schools.

France has objected to Turkey’s gas exploration missions in the eastern Mediterranean, alongside the EU, Egypt and Israel.

From Turkey’s perspective, frayed relations with Paris can be traced to the aftermath of the First World War, when France was among the powers that attempted to carve up the territory of the defeated Ottoman Empire.

In another twist, last week Turkey’s pro-government Sabah newspaper reported an investigation into a French spy ring, claiming the ring’s leader had undergone training in France.

Resolving the differences between Paris and Ankara will require mediation by another Nato ally, probably Germany or Italy, according to analysts.

“The tensions are too overt and deep to be self-resolved,” Mr Kaya said. “There are too many divergent subjects and the current governments do not show any sign of smoothing their tones.”

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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