Turkey seeks business opportunities in Gulf nations
Turkey seeks to strengthen political and economic relations with Gulf countries during a visit by President Recep Tayyip Erdogan to the region from Sunday through Wednesday. The long-running war in Syria and chaos in Iraq and other regional issues will be on Erdogan's agenda as well as economic cooperation between Turkey, Bahrain, Saudi Arabi and Qatar, according to presidential sources. The three-nation Gulf tour will be very important for the development of Turkey's economic relations with these countries, according to Turkish business experts. The president will first head to Bahrain on Sunday and will stay there until Monday, when he will depart for Saudi Arabia. He is scheduled to visit Qatar on Tuesday and Wednesday. The economic relations between Turkey and Gulf countries, which have a high level of national income per capita in accordance with their petroleum and natural gas revenues, saw a significant development between 2007 and 2016 when diplomatic relations also improved, according to official data from TurkStat.
In the last 10 years, Turkey’s exports to these three countries totalled $33 billion. Considering the $53 billion foreign trade volume with these Gulf countries, Turkey had a $13 billion trade surplus in that period. Oil-rich Saudi Arabia became Turkey’s top export partner with $27 billion in the last decade followed by Qatar and Bahrain with $3.87 billion and $1.66 billion, respectively. In the same period, Turkey imported most from Saudi Arabia -- $16.3 billion -- while Qatar came second at $2.8 billion. Bahrain followed with $1.28 billion. Last year, the total trade volume between Turkey and these three countries was around $6.2 billion while Turkey’s exports amounted to $3.8 billion.
'Relations with Saudi Arabia to deepen'
Yusuf Cevahir, head of the Turkey-Saudi Arabia Business Council, said that the two countries should cooperate in more sectors "for the sake of mutual benefits". "Relations between Turkey and Saudi Arabia will reach their deepest level in the coming period," Cevahir told Anadolu Agency on Friday, adding it was important to establish joint engineering and consulting companies, and use domestically produced goods. "Let’s do it ourselves instead of getting technical services from the West. [...] Otherwise materials will continue to be procured from foreign markets in the projects carried out by the Western countries," he said. Cevahir also noted the rising population and housing needs in Saudi Arabia, and suggested forming a joint social housing institution like Turkey’s TOKI (Housing Development Administration) which would enhance bilateral trade volume to $10 billion annually. "I believe there could be a significant drop in project costs with the contribution of thousands of globally known Turkish contractors and by using domestic facilities of both countries," he said. Cevahir also pointed out the "expensive" visa problem facing Turkish citizens. "We have to pay 8,000 Saudi riyals [some $2,133] for a two-year business visa. We are expecting a visa fee reduction," he said.
"Another issue is about shipments. Turkish transporters are not allowed to deliver goods within the country. This causes both loss of time at border gates and an increase in costs due to the use of third parties," Cevahir added. In 2016, Turkey imported $1.83 billion worth of goods from Saudi Arabia -- heavily based on the plastic sector and mineral fuels -- while exporting mainly electrical appliances, carpets and floor coverings worth $3.17 billion, marking a 114 percent increase compared to a decade ago.
'No income and corporation tax in Bahrain'
Muhammet Ugurcan Barman, head of the Turkey-Bahrain Business Council, said the business norms in Bahrain and Western countries were alike and the country’s free trade agreement with the U.S. gave it an advantage over other Gulf countries. "A business person can establish 100 percent foreign-owned company in Bahrain within just 24 hours. There is no income or corporation tax which makes the country more attractive in terms of doing business," Barman said. Noting the proximity of the capital cities of Bahrain and Saudi Arabia, Barman said that a wide range of Turkish exports could reach Saudi and other Gulf markets through Bahrain, considering the alternative routes are threatened by the ongoing conflicts in Syria and Iraq.
"A project that makes Bahrain a wholesale market for fresh fruits and vegetables and turns the country into a hub for Gulf countries via an air shipping corridor from Turkey would definitely benefit both countries," he added. Barman also pointed out Bahrain's plan to invest in a 20,000-unit social housing project, saying he had the chance to discuss this with the country's minister of urban planning. "We requested a positive discrimination for Turkish contractors to take role in this project. This should be brought up again with the support of President Erdogan," he said. Last year, Turkish exports to Bahrain increased by more than 150 percent compared to figures of 10 years ago and reached $193 million. Major Turkish exports came from iron and steel, motor vehicles and tobacco industries. Mineral fuels, rolling stocks, electrical and electronic equipments were top subcategories in Turkey’s imports from Bahrain totalling $127 million in 2016.
Qatar to spend $200 billion on 200 projects
Rich in oil and natural gas reserves, Qatar has a gross national income per capita of over $138,000, according to 2015 World Bank figures. There are 200 planned investment projects in the country which need almost $200 billion, according to the Office of the Commercial Counsellor at Turkish Embassy in Doha. Around 43 percent of this amount will be spent on infrastructure while the rest will be used for education and healthcare sectors. Qatar is also planning to construct nine new medium and large-sized football stadiums in the country as the host of the 2022 FIFA World Cup. In 2016, Turkey’s $440 million export to Qatar consisted largely of ships, yachts, electrical and electronic devices, machines and furniture while the country’s imports from Qatar -- $271 million -- were mainly based on oil and petroleum products, aluminum and plastic products.