A New Era In Turkey-Uae Relations

The visit of the UAE's de facto leader, the Crown Prince of Abu Dhabi, to our country in November opened a new era in our relations.

COUNTRY PANORAMA 03.02.2022, 10:58
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A New Era In Turkey-Uae Relations

Ambassador of the Republic of Turkey to the United Arab Emirates Tugay Tunçer talked about the intensifying diplomatic relations between Turkey and the United Arab Emirates (UAE) and the potential economic cooperation between the two countries to the Katılım Finans.

WHAT IS THE GENERAL SITUATION OF TURKEY-UAE DIPLOMATIC RELATIONS?

In the diplomatic relations between Turkey and the UAE, there is intense contact in light of the mutual political will 

and concrete steps taken in the recent period to strengthen the cooperation between our countries. Mutual high- level visits and signed bilateral agreements are concrete indicators of this. The visit of the Crown Prince of Abu Dhabi, the de facto leader of the UAE, to our country in November opened a new era in our relations. Our Foreign Minister was also in the UAE last month. This visit was important in terms of the preliminary preparation of our President's visit to the UAE in February.

UAE is our first trade partner among Gulf Cooperation Council (GCC) countries. In addition, it ranks second in investments in our country from the GCC. Our mutual interests and economic cooperation opportunities have been the dynamo of our relations. In the new period, the primary orientation of our diplomatic relations will be to benefit from the added value that our cooperation can create in every field, in line with the common goal of contributing to prosperity, security and stability, both bilaterally, regionally and internationally.

WHAT CHANGES HAS COVID-19 CAUSED IN THE UAE ECONOMY?

The pandemic experienced in 2020 upset all the balances in the world economy and caused a deterioration in the global trade order. In addition to the contractions in demand and supply, there
was a loss of employment, decreased production capacity, and a decline in oil and commodity prices. The decline in global oil demand, the decrease in the oil demand of China, which is an essential partner for the UAE, and the conflict between the OPEC+ countries caused the oil demand to remain below the production, which brought oil prices down significantly. Factors such as decreased investments in the hydrocarbon sector, which is one of the country's important income sources, deterioration in supply chains, cash flow problems, layoffs, etc. caused a shrinkage of approximately 6% in the UAE economy. The restriction of travel due to 

the pandemic also dealt a blow to the services sector in Dubai, where tourism is an important source of income.
In the face of all this negative picture, the UAE government announced monetary and financial incentive packages to recover the economy, and various legal arrangements were made to avoid losing the business and investment environment in the country. In addition, we see that attempts to diversify income sources after the pandemic have gained momentum in the country, trying to create an economic income source in non-oil sectors by removing its economy from being dependent on oil. In this context, priority has been given to developing sectors such as digitalization, artificial intelligence, aviation and space, information and communication technologies, financial technology, renewable energy, food safety, agricultural technology and innovation.

COULD YOU TELL US ABOUT THE CURRENT AND POTENTIAL AREAS OF COOPERATION BETWEEN TURKEY AND THE UAE?

There is an ongoing trade partnership, increasing investment and business volume between our country and the UAE. In addition to our bilateral foreign trade, which amounted to 8 billion dollars last year, construction business also constitute a significant part of the economic activities between the two countries. Our contractors have undertaken 141 projects worth approximately 13 billion dollars in the UAE. Our companies have carried out successful projects from housing and touristic facility constructions to infrastructure investments such as airports, railways and highways. Furthermore, our main aims are increasing mutual investments between our countries and improving the investment environment.

When we look at the potential sectors whose importance has increased, especially after the pandemic, they can be listed as e-commerce, information and communication technologies, health, medical, agriculture and food industries. In this context, we believe that cooperation opportunities can be developed between the two countries in these sectors.

COULD YOU SHARE YOUR PREDICTIONS ABOUT THE REFLECTION OF THE RECENT AGREEMENTS ON THE ECONOMIC COOPERATION BETWEEN THE TWO COUNTRIES?
On 23 November 2021, the Turkey-UAE 10th Term Joint
Economic Commission Meeting was held in Dubai under the chairmanship of our Minister of Trade, Mehmet Muş. At the same time, Turkey-United Arab Emirates Business Council Meeting was held with the participation of businesspeople from both countries. A total of 10 agreements and memorandums of understanding were signed within the framework of Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed's visit to Ankara. With these agreements between the two countries, the will to increase cooperation in many fields such as bilateral trade, mutual investments, health, tourism, agriculture, energy, science and civil aviation has been revealed. We believe that this new course of our economic cooperation, together with the momentum of high-level visits, will present new opportunities for our countries and encourage our business people to do business together.

WHAT WOULD YOU SAY ABOUT THE LATEST STATUS OF THE UAE'S ISLAMIC FINANCE ACTIVITIES?

In addition to being a global financial centre, the UAE also
has an important place in the Islamic financial services sector. The country is home to an Islamic finance market, which is growing day by day and with total assets of approximately 210 billion dollars following Iran, Saudi Arabia and Malaysia. In the UAE, where the assets of Islamic banks constitute approximately 19% of the total banking system assets, a 5% growth was recorded in the said assets, according to the Central Bank's 2020 data.

In addition, in recent months, a five-year sukuk of 500 million dollars have been issued by one of the UAE's leading Islamic financial institutions, 'Emirates Islamic Bank'. As of the end of 2020, medium-term (1-5 years) sukuk issuances constitute approximately 46% of the total portfolio, while issuances with maturities longer than five years that started in 2020 constitute 15% of the portfolio.
 

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