REGIONAL FRIENDS

Turkey 2013 | ECONOMY | FOCUS: MENA TRADE

Turkey has set ambitious targets for trade with the MENA area; however, with the right guidance, it has the potential to meet these and establish itself as an economic power in the region.

After years of attempting to gain accession to the EU with no avail, Turkey is now looking to restart trade relations with its eastern neighbors. This is proving to quite fruitful as the EU still deals with austerity and recession while large parts of MENA have been spurred by high oil prices regularly going over $100 a barrel. Turkey's relationship with the Middle East has not always been easy, and it wasn't until Prime Minister Recep Tayyip Erdoğan came to power that he switched the country's focus from the West to the East. Just over a decade ago, Turkey's investment in the MENA region was approximately $5 billion, which has grown to a little under $34 billion in 2013. Trade with the MENA region now accounts for around one-fifth of all Turkey's external trade. A number of Turkish contractors are also performing well in the region by securing over $20 billion worth of contracts over the past five years, including some of the largest construction projects in the MENA area. In Saudi Arabia, the Turkish contractor Yapı Merkazi managed to secure the $2.1 billion contract for work on the Haramain High-Speed Rail Network, also known as the Western Railway, which is 449.2 kilometers in length and will link Medina with Mecca. Baytur was also able to win an $800 million contract for work at the King Khalid University in Saudi Arabia. The work involves building 142,130 sqm of administrative buildings for the university. In the UAE, trade between the two countries reached $9.1 billion in the first eight months of 2012, which was three times higher than in the same period of the year before. The plan is to increase the trade between the two countries to $15 billion by 2015. In June 2012, Turkey's TAV İnşaat led a consortium that included two of the largest Arab contractors—Arabtec Holding and Consolidated Contractors—and won a $3 billion tender to build the new terminal at Abu Dhabi International Airport. This is the largest construction contract ever awarded in the UAE. In January 2013, Turkey and the UAE signed a project in Turkey's Afsin-Elbistan region where Abu Dhabi National Energy Company (TAQA) and Turkey's state-owned Electricity Generation Company (EUAS) will modernize and expand an existing 1,400 MW power plant, as well as develop several new power plants associated with the coal mines in south of the country, which will provide an additional 8,000 MW. The project is estimated to be completed by 2021. The plan is for trade relations to increase over the next decade with the Turkish government setting a target of bilateral trade between the Turkey and MENA of $100 billion annually by 2023. This is an ambitious target, but not impossible. For this to be realized, the government will need to speed along negotiations of a free trade agreement (FTA) with the six-member GCC, which was put on the back burner once the economic crisis set in around the world. Another way to reach this target would be to think about switching its energy imports to the MENA region. Currently, Turkey imports most of its oil from Russia, Azerbaijan, and Iran. If it were to switch all its imports to the MENA region, then it would go a long way to reaching the $100 billion target. It is also not just products and commodities that Turkey is exporting to the MENA region; recently Turkish TV shows have become extremely popular all the way from Morocco to Iraq. Shows such as Muhteşem Yüzyıl and Fatmagül'ün Suçu Ne? have helped spread a positive image of Turkey among the everyday people of the region.