Saudi and Turkey strengthen energy and defence ties

SPA/Reuters

• Nine MOUs signed in total including real estate and construction
• Defence deal involves cooperation plan and drone purchase
• Turkish government anticipating $10bn direct investment from GCC

Saudi Arabia and Turkey have signed energy and defence agreements with plans to boost direct investments and build on bilateral trade worth over $6 billion last year.

Turkey’s President Tayyip Erdoğan and Saudi Crown Prince Mohammed bin Salman were present as the agreements were signed, state-run Saudi Press Agency reported.

The deals included two contracts with Turkish defence firm Baykar to buy drones, defence minister Prince Khalid bin Salman said in a tweet.

He added that the two countries also signed a defence cooperation plan.

• Gulf sees potential in Turkish energy and defence
• Turkey’s exports to Gulf rise 29% to $1.69bn in May
• Turkey hikes interest rates in attempt to curb inflation 

Nine memoranda of understanding covering energy, real estate, construction, education, tech, healthcare and media were also signed at the Saudi-Turkey Business Forum which began in Jeddah on Monday.

At a separate forum in Istanbul last week the kingdom and Turkey signed deals worth SAR2.3 billion ($610 million).

Erdoğan arrived in Saudi Arabia on Monday as part of a tour of the Gulf, which also includes visits to Qatar and the UAE.  

Prior to his arrival, senior Turkish officials told Reuters that direct investments worth about $10 billion could result from Erdoğan’s visit. They said that expectations were high and that “some important agreements will be signed”.

According to Saudi Press Agency, the kingdom’s exports to Turkey reached SAR52.3 billion over the past three years until May this year. Its imports from Turkey hit SAR16.8 billion during the same period.

Turkey’s exports to Saudi Arabia surged to nearly $800 million during the first four months of this year, an increase of over 600 percent, according to the Turkish Exporters’ Assembly.

Saudi Arabia successfully attracted 390 Turkish companies to invest in its local market, with investment reaching SAR 985.6 million. Turkish companies are active in several sectors, especially construction, manufacturing, wholesale and retail trade and restaurants.

Saudi investment in Turkey reached $18 billion, with 1,140 companies operating across the country.

Gulf nations have invested heavily in Turkey in the past few years as part of wider efforts to de-escalate tensions in the Middle East, and despite the country’s economic malaise and poor returns from previous multi-billion-dollar deals.

Saudi Arabia made a $5 billion deposit into the central bank of Turkey to support the country’s economy in March.