Gül Meets with Saudi's King Abdullah

PHOTO from Today's Zaman

President Gül paid a state visit to Saudi Arabia last week (from Feb. 3-5). Calling for Palestinian unity, President Gül lauded Saudi Arabia's attempt to bring Hamas and Fatah together. Bilateral ties between Saudi Arabia and Turkey have grown stronger in recent years. From Emrullah Uslu at EDM:

The visit also highlighted the flourishing Turkish-Saudi bilateral relationship. The Turkish president said that he felt at home on his the trip, calling Turkey and Saudi Arabia sister states and sister nations. Gul recalled that King Abdullah had gone to Turkey in 2006 and 2007 and that these two visits in such a short time had shown Riyadh's "extraordinary attention and concern for Turkey." Gul added that he had wanted to return the gesture by paying a visit without any delay to show the high esteem that Turkey attached to relations with Saudi Arabia (www.ntvmsnbc.com.tr, February 4). Diplomatic observers believe that Riyadh might be seeking to develop a strategic partnership with Turkey to counter the growing Iranian influence in the region (www.cnnturk.com, February 3).

Bilateral economic cooperation was a major theme on Gul's agenda. He emphasized that the two countries had already signed agreements covering tax exemption, investment protection, and transportation (ANKA, February 4) and expressed the hope that the two sides could extend this cooperation further. Turkish ministers and the businessmen accompanying Gul signed new agreements with their counterparts in such areas as educational exchange programs, cooperation in youth and sports, and maritime transportation (Hurriyet Daily News, February 4).

Gul also spoke at a meeting of the Turkish-Saudi Business Council. Noting that structural reforms in Turkey had helped the country withstand the global crisis and created favorable conditions for foreign investors, Gul highlighted the strengths of the Turkish banking system. He invited Saudi businessmen to invest in Turkey. Given Saudi Arabia's projected investments in infrastructure, Turkish businesses, especially contractors, view Saudi Arabia as a lucrative foreign market (Cihan Haber Ajansi, February 4).

Despite the positive outlook for the economy and financial sector that Gul presented, Turkey urgently needs an injection of foreign capital to cushion the effects of the crisis. The government has been reluctant to sign a credit agreement with the IMF, because it would impose stringent conditions on government spending (EDM, January 29). There has been constant talk in Turkey about attracting petrodollars, or "Gulf capital" as the Turks like to call it, as a way to finance Turkey's economic development. Turkish businessmen have hoped that Turkey might be able to attract Gulf capital leaving the Western banking system, especially after September 11. Lately, it has often been said that Gulf capital might make Istanbul a worldwide financial center, and end Turkey's dependence on the IMF (Zaman, January 28, 2008). As a matter of fact, although the AKP government has been successful in boosting the volume of Arab investments in Turkey, it could not raise it to a level that would reduce Turkey's dependence on money borrowed from Western financial institutions.

For full analysis, click here. For coverage from TDZ, click here.

In other news, President Abbas visited Ankara over the weekend, and while gracious toward Turkey for engaging Hamas and, according to TDZ, "pushing it toward the center," the Fatah leader was less optimistic of Turkis diplomacy than most Turks would have liked.