With a national income of $400 billion, the United Arab Emirates (UAE) economy is the second-largest economy in the Gulf region after Saudi Arabia. The per capita income is approximately $35,000. Re-export covers 40 per cent and the carbon sector covers 30 per cent of the UAE’s exports. The country has imports of around $250 billion and meets the majority of its consumption through imports. As a result of the Covid-19 pandemic, as in the rest of the world, there have been significant contractions in the UAE economy, but thanks to the rapid supply and application of vaccines, it has kept its economy open for a long time like Türkiye. This year’s EXPO fair also added vitality to the economy. In addition, the recent rise in oil prices has revived the UAE economy. Thanks to free zone practices, initiatives to increase logistics infrastructure, liberal policies in property acquisition and initiatives to become a financial technology centre, the UAE has managed to become a regional hub and has become a country where many international companies have opened regional headquarters.
Trade and investment relations between the UAE and Türkiye have made significant progress in the last 20 years. The annual average trade volume between the two countries is $8 billion. In terms of investments, the developments in the foreign policy between the two countries have also been very decisive in the course of direct investments from the UAE to Türkiye. The state wealth funds and state-linked affiliates established by the state in the Gulf countries also have a significant share in the country’s economic activities. We see companies established as private companies with the state as the partner in almost any sector and the UAE is similar to us in this sense.
When we examine the investments coming to our country from the UAE over the years, we see that the period between 2010-2015 is especially critical. DP World, IFFCO, EMAAR and Abraaj made investments in the form of direct capital in this period. Apart from these, real estate investments of UAE citizens concentrated in Istanbul, Yalova, and Sapanca regions draw our attention.
Between 2015 and 2021, we observed a pause in investments from the UAE, as a result of the changes in foreign policy. However, even in this period, we witnessed that UAE companies have made use of the investment opportunities when they arise, regardless of political developments. Emirates NBD Group’s investment in Denizbank is a good example of this.
Then, as of mid-2021, the political developments between the two countries once again led to an increase in the UAE investors’ interest in Türkiye. In particular, the mutual visits of Sheikh Mohammed bin Zayed and Recep Tayyip Erdoğan, our President of the Republic of Türkiye, and the warm atmosphere and cooperation created will seemingly also act as a catalyst for the upcoming period.
Türkiye is a significant country for the UAE in terms of investment. Türkiye attracts investors in the region with its strategic location, entrepreneurial business culture, young and technology-oriented population, talented engineer pool and competitive products and services. Türkiye also has significant importance in the eyes of the UAE within the context of opening up to Europe and the Turkic States. For Turkish entrepreneurs, on the other hand, the UAE is an important hub to open up to the African, Middle Eastern and Far Eastern markets.
The interruption of the global supply chain as a result of the Covid-19 has brought Türkiye to the fore with its strong production infrastructure. Following the pandemic, as a regional R&D, production, logistics, training and management centre, Türkiye is expected to keep earning investments focused on exports of commodities and services, with priority on sustainable food, agricultural technologies, and foot safety from these countries.
Türkiye and UAE have begun to use these mutual advantages in certain sectors. For example, in the precious metals and jewellery sector, the UAE has been a significant source country for the supply of gold bullion for Türkiye, while Türkiye has become one of the most important countries supplying the UAE jewellery market. This mutual cooperation has rendered both countries significant hubs for precious metals and jewellery around the world.
The developments in the technology sector are also an issue that we would like to mention. We observe start-ups in Türkiye that quickly grow in size in areas such as e-commerce, fin-tech, online gaming, logistics technologies, life sciences, and deep tech. We also see that UAE investors do not remain indifferent to this interest and increase their investments day by day. Getir and Trendyol recently received a significant amount of investment from ADQ and Mubadala. Also, we observed the investments of UAE companies and funds in Modanisa, Insider, Marti, and Tarfin companies. Türkiye has an economy where many technology start-ups exist and are able to be scaled. The UAE, on the other hand, is an important centre where technology start-ups in Türkiye can reach technology investors. It is observed that the two countries complement each other in this sense.
In the upcoming years, we expect UAE investors to make significant investments in energy, health, telecommunications, infrastructure investments, technology, agriculture, and food in Türkiye, and direct talks have started between Turkish and UAE companies in these areas.
Another important issue that we would like to draw attention to here is the importance of informing these investors who are interested in our country correctly and guiding these investors in terms of guidance and process management. As the Investment Office of the Presidency of Türkiye, we carry out a significant function in terms of rendering the investment process of international investors in our country healthy, providing accurate information, and managing post-investment processes. Our expectation is that the investment volume between the two countries will increase very rapidly in the upcoming years and that the strengths of the two countries will be transferred to each other in a synergetic way.
Rahim Albayrak / Country Advisor at the Investment Office of the Presidency of Türkiye