Economics, geopolitics force ‘Sultan’ Erdogan to reach out to Gulf ‘hat in hand’

Changing allegiances, regional ambitions, and ideological disputes have long shaped geopolitics in the Middle East. Woven into the fabric of the complex chronicles of the regional state of affairs is the tension between the Gulf States and Egypt on one side and Turkey on the other. Historically, however, these countries have enjoyed friendly relations and shared mutual interests. Yet, in recent years, those amicable ties disintegrated due to political and ideological fractures, creating an imbalance in the previously symbiotic regional equilibrium.

Yet, there has been a recent softening of rhetoric which painted rosy pictures of strong and “brotherly” relations. Last month, President Recep Tayyip Erdogan took center stage in the Middle East when he went on a three-legged Gulf tour that dominated headlines in the region.

The tour ended in friendly displays of affection, deals and cooperation agreements that were signed and Erdogan going back home having secured billions of dollars of investment in his country. Yet, rather than being viewed as the conquering hero who singlehandedly saved Turkey’s economy from the abyss, analysts had a different interpretation of the visits to the Gulf countries.

Henri J. Barkey, the Cohen Professor of International Relations at Lehigh University and an adjunct senior fellow for Middle East studies at the Council of Foreign Relations told Al Arabiya English: “Erdogan snubbed the Gulf leaderships; he tried to demonstrate that he was more powerful than them. His policies, which did not succeed, were designed to create the image of a Turkey on the rise, more powerful than those of the Gulf. Today, he is coming to the Gulf as a demander, his hat in his hand, asking for money.”

“The Gulf countries can only feel vindicated as the balance has changed. Other than seeing him humbled, the most crucial benefit they will derive is that he will no longer support organizations like the Muslim Brotherhood,” he added.

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They’ve moved on

Gone are the days of the bitter and sometimes vicious exchanges between Gulf countries and Turkey. Critical disagreements such as support to the Muslim Brotherhood, the murder of Journalist Jamal Khashoggi in the Saudi consulate in Istanbul and standing by Qatar during the Gulf crisis seem to have been archived and a new era of relations seem to be budding into the international political sphere.

Amb. Gerald M. Feierstein, Distinguished Senior Fellow for Diplomatic Engagement Director, Arabian Peninsula Affairs Program at the Middle East Institute said: “The coup against the Muslim Brotherhood government in Egypt, the murder of Jamal Khashoggi in Turkey, and the intra-GCC conflict with Qatar were principal issues driving the decline of Turkey’s relations with the Gulf states. It’s clear that the two sides have decided to move beyond those issues and focus on positive areas for cooperation.”

Galip Dalay, Associate Fellow, Middle East and North Africa Program at Chatham House argued: “The climate between now and only a few years ago during the time of the killing of Jamal Khashoggi or during the early phase of the Arab Spring, is totally different. Back then the nature of relations between the sides was extremely competitive, if not acrimonious. Both sides would engage in very harsh verbal exchanges.”

He added: “Now you see that the language has changed and one important thing about the new language is its extreme economical focus and it is extremely focused on cooperation.”

“Whereas the previous language was focused more on geopolitical files, political files, and their disputes. The new language is focused on economy, on the areas of cooperation rather than competition. So, the mood and the climate and the language are totally different.”

Turkey’s economy is in shambles

Erdogan is known among international politicians and political analysts circles as the “Sultan”. If he had his way, he would be a sultan presiding over his very own modern-day Ottoman Empire, shaped in his image, until his last dying breath. Although the sultan comparison may appear like a simple cliché, analysts and politicians worldwide have repeatedly used it to illustrate Erdogan's authoritarianism and how he eroded the independence of state institutions. German politician Cem Özdemir once said: “Erdogan wants to be a modern sultan. He wants to rule Turkey for life, and he wants to do it with an iron fist.”

Under the “Sultan’s” leadership and thanks to his interventionist economic policies, Turkey’s economy and its citizens suffered terrible repercussions. Erdogan’s policies eventually led to high inflation, a widening current account deficit, and a severe depreciation of the Turkish lira. The common people in Turkey have faced the brunt of these economic challenges, as the crumbling value of the lira diminished their purchasing power, making it increasingly difficult to afford essential goods and services.

Erdogan has been actively working to mend Turkish ties with Gulf States in an effort to persuade those countries to reach into their deep pockets and invest in Turkey to bolster its economy. He downplayed the political differences between Turkey and the Gulf and played up the potential for collaboration in areas such as tourism, real estate, and infrastructure projects.

Erdogan’s dramatic change of course to focus on economic diplomacy reflects how dire his country’s economy’s state is and shows how Ankara is adopting a more pragmatic approach to international relations. The “Sultan’s” song and dance he played for the Gulf States’ leaders – including a making a show of presenting the gift of a Turkish-made car to each leader he visits – is a calculated move, part of a wider economic strategy which Erdogan hopes would open doors to greater financial opportunities, partnerships, and regional stability. This is illustrated by Barkey saying: “Erdogan needs to start a rapprochement with everyone to create a new non-confrontational environment to attract investment.” Additionally, Horowitz said: “Erdogan is a pragmatic leader. He recognizes that he must acclimate to the shifting political sands.”

Analysts believe that Erdogan is cementing a new era of ties with the Gulf because of the critical condition of his country’s economy. Barkey said: “Turkey is facing one of its more dire economic crises. Inflation is high and will continue to rise; the current account deficit is enormous; the lira is under terrible pressure, losing 40 percent of its value this year alone.”

More experts concurred; Amb. Feierstein said: “Traditionally the Gulf has been a key economic partner for Turkey and the tensions in Turkish-Gulf relations were damaging to Turkey’s economy. Improved relations will reopen that area both for the export of Turkish goods and services as well as a source for foreign direct investment in Turkey’s economy.”

He added: “Economic requirements are the principal driving force in Turkey’s desire to repair its relations with the Gulf. In addition, some of the issues creating tensions, including the boycott of Qatar, the Egypt coup, and the Khashoggi murder have been resolved or have become less salient.”

Charles Horowitz, a foreign affairs analyst who writes for online publication Policy Reform Now, agreed and told Al Arabiya English: “Erdogan knows that his economic policies have forced Turkey into dire straits, and the Gulf states are some of his best hopes for receiving the necessary currency infusions and economic solutions to at least partially prop up the Turkish economy. In turn, many of the Gulf states, especially smaller ones, are attracted to working with the country that has the second-largest military in NATO (after only the US) — and one that exercises significant diplomatic sway in the region, to boot.”

Dalay was of the same opinion, he said: “Economically, Turkey wants to capitalize on better relations by attracting more investment from the Gulf, by attracting more Gulf money into Turkey, and more Gulf deposits in Turkey’s central bank.”

However, Barkey stressed that: “[Erdogan’s] first priority is to get the Gulf countries to ‘invest’ in Turkey; these investments tend to be real estate type and limited in their benefits. They represent foreign exchange transfers but do not create jobs. It is a temporary band-aid. He is buying time until the March municipal elections.”

What do Gulf countries stand to gain?

Erdogan got his investments, deals and promised deposits. But what do the Gulf countries have to gain in bailing Turkey out of its economic quagmire?

Analysts had a variety of opinions. A common one was that the Gulf saw investment opportunities in a far away strategically located country and a major player on the international stage to boot. They also argued that Gulf countries have now gained leverage over Turkey – which is quite a feat considering it’s a NATO country with the second biggest army in the alliance after the US.

Soner Cagaptay, the Beyer Family Fellow and director of the Turkish Research Program at The Washington Institute told Al Arabiya English: “Turkey is a resource poor country and so [Erdogan] wants to court investment from rich Gulf monarchies. For that, of course, he kind of had to reset ties with not only the monarchies but their allies, including the Egyptians of course.”

He added: “And I think for the Gulf monarchies, the opportunity there of course is that this gives them leverage over Turkey in the long term. Investments in Turkey, whether it is short term or stock market or buying companies or strategic assets.”

Amb. Feierstein argued that: “For the Gulf states, a strong relationship with Turkey provides further insurance against Iran and is also a reflection of the interest among the GCC states to improve regional relations and lower tensions.”

Given the relationship between Ankara and Tehran, through normalizing ties with Turkey, Gulf countries gained assurances against Iran carrying out attacks on their territories or providing the means for militias to target them such as the case of the drone attacks on Saudi Arabia and the UAE that were blamed on the Houthis, while widely recognizing that the drones had been made and supplied by Iran. The reset of ties with Turkey also adds a level of security guarantee should Tehran decide to renege on the deal with Riyadh.

Shared discontent with US

For decades, the historical ties between Gulf States and the US have been built on economic and strategic collaboration, which as time passed expanded to include defense partnership as Washington provided the Gulf with weapons and military equipment and trained their soldiers. However, there has been growing dissatisfaction with the US among Gulf countries straining the relationship. The Gulf countries are discontent with shifting US priorities, with Washington’s pivot towards Asia and the Biden administration’s perceived soft stance against their traditional regional adversary, Iran. Another point of concern for the Gulf is the US goal of energy independence, which reduces reliance on Gulf oil, which makes them question the long-term US commitment to safeguarding the Gulf's oil-producing capabilities.

Dalay argues: “Globally, there is more distrust in the US leadership or the US presence in the region. Therefore, one reason that the regional countries have been engaged with each other trying to mend their ties is a response to the US and is actually motivated by their discontent with the US and distrust of the US.”

He added: “Both Turkey and Gulf countries are discontented with the US, distrust the US and most importantly, the idea that the US might not be as reliable a partner is also another factor that motivates their normalization of ties.”

On the other hand, Horowitz argues: “The Gulf states will continue to realize that the US is the foremost military power in the region, including with troops on the ground. That, coupled with American soft power, makes Turkey a second-tier power even in its own backyard. And, without any exorbitant concessions, Erdogan may try to extract (e.g. EU membership and F-16 jets in exchange for Swedish NATO accession), successfully or unsuccessfully, his leverage in the region is lessened.”

Barkey agreed: “Relations with the US and the Gulf countries may have soured of late, but at the end of the day, they still need Washington to deter the Iranians. People exaggerate the rift between them.”

Shared quest for autonomy

In the shifting winds of global geopolitics, Gulf countries have started charting their own course towards greater autonomy from the US seeking to reduce their dependence on Washington. This shift, becoming more pronounced in recent times, is bound to reshape the Middle East’s political landscape in a major way.

Historically, the Gulf States have strongly relied on the US for military protection, advancements in technology and a wide range of economic partnerships. However, a shift in the geopolitical tectonic plate has taken place. The Gulf is redefining its foreign policy and recalibrating its alliances.

Autonomy happens to be a shared goal between the Gulf and Turkey. Amb. Feierstein said that a stronger relationship between the two would help both sides grow more autonomous from the US.

As for the impact of the normalization on the US, he said: “For the US, improved Turkish relations with the Gulf cuts both ways. As a NATO ally, Turkey’s relations with the Gulf provide the US with an important partner in promoting regional security and stability. But their stronger relations also give both sides a degree of insulation from US pressure to adjust strategies to meet US policy preferences.”

Dalay said: “The quest for autonomy in foreign security policy has been a shared one between the Arab Gulf States and Turkey. The clearest case has been their stance on the war in Ukraine. Both Turkey and Arab Gulf states try to chart their own way rather than just joining the Western sanctions or sharing the Western positions.”

He added: “Therefore, this idea of regional powers having more say in the regional affairs and demanding more status in international affairs is one thing that actually facilitates more conversation between Turkey and Arab Gulf States.”

Tackling regional files together

The normalization of ties between Turkey and Gulf countries presents an opportunity to address a range of regional political files that have significant implications for Middle Eastern stability and cooperation.

The Syrian war is a major regional issue that both Turkey and the Gulf have reason to want resolved, as both sides have been drawn into the conflict and are involved to varying degrees in direct and indirect ways.

Barkey said: “They could and should develop a common strategy against [Syrian President Bashar al] Assad. Despite the efforts to rehabilitate Assad, the fact remains that Damascus is too subservient to Iran. Turkey would like to get rid of the Syrian refugees, but as long as Assad is in power, this will be very difficult.”

The ongoing situation in Libya is another area where Turkey and Gulf countries could align their efforts. Dalay argued: “Turkey and many Gulf states… have been engaged in several crisis areas, most importantly in Libya. So, by improving relation with the Arab Gulf states, Turkey and the Arab Gulf states can manage this crisis better.”

He added: “[Over] the next period, one area that will emerge as potential area of collaboration or at least where they can have better understanding… is the regional conflict management from Libya to Iraq to even Sudan.”

The Gulf States and Turkey normalizing ties could very possibly alter the political landscape of the Middle East. Cooperation between the two sides – each a heavyweight in their own right – could lead to more stability, prosperity, and integration in the region which would be beneficial to the entire regional community and beyond. However, achieving these lofty aspirations will require deliberate and measured diplomacy, transparent dialogue, and the flexibility to be able to compromise, especially on matters which touch core beliefs and historic stances.

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