TURKEY and Saudi Arabia are two brotherly countries that share a common ground of history, culture, and faith. Over the last 13 years, we have seen these close bonds begin to reflect on Turkish-Saudi business and economic cooperation.
Saudi investments in Turkey are on the rise. As of the end of 2015 there are 744 Saudi companies in Turkey, with 149 of those operating in real estate, 120 in construction, 110 in wholesale trade, 87 in retail trade, 77 in transport and travel activities, 20 in hotel/restaurant businesses, while the remainder are active in a number of other sectors.
The most recent entrants from Saudi Arabia include Acwa Power International in the energy sector and Iris Capital in the e-commerce sector. The largest declared Saudi investor in Turkey to date is National Commercial Bank, which acquired Türkiye Finans for a sum of $1 billion in 2007.
Total FDI flow during the last five years from Saudi Arabia to Turkey is $553 million, with the total FDI stock from Saudi Arabia to Turkey amounting to $2 billion as of the end of 2015.
Saudi Arabia was Turkey’s 12th largest export and 22nd largest import partner in 2015. Turkish exports to Saudi Arabia in 2015 stood at $3.47 billion, whereas imports from Saudi Arabia amounted to $2.11 billion. The trade volume between the two countries reached $5.5 billion.
The number of Saudi tourists visiting Turkey is increasing each year. More than 450,000 Saudi tourists were welcomed in Turkey in 2015. This number was 341,000 in 2014 and 234,000 in 2013, representing a remarkable surge of an additional hundred thousand Saudi nationals adding Turkey to their travel plans each of those years.
Turkey is a strong blip on Saudi investors’ radar
Among the many fields of business for Saudi investors in Turkey, the tourism, finance, real estate, and energy industries present the best opportunities given our countries’ great potential and cultural kinship.
The very factors that motivate European and American companies to invest in Turkey are also motivating Saudi investors to take advantage of the opportunities here. For instance, Saudi investors can use Turkey as a springboard to access rich markets in Europe, the Caucasus, and Central Asia.
Moreover, given the fact that Turkey has a Customs Union agreement with the European Union, as well as free trade agreements with 27 countries, Saudi investors can access multiple markets in those countries and the EU, using Turkey as a safe and stable investment base.
It is not surprising that Istanbul, with its intense economic and business activity, is growing into a regional and international financial center to serve global investors.
The Turkish government, well aware of this, has launched a project to speed up Istanbul’s bid to become a leading international financial center.
Having been tested by the recent global economic crisis, Turkey has one of the most stable and profitable financial sectors in its region. Istanbul Financial Center offers global companies a chance to run their financial operations in the region through Istanbul thanks to various incentives, a skilled workforce, and a global, cosmopolitan city with a vibrant local economy.
Commenting on the current state of Turkish-Saudi business and investment relations, the President of the Investment Support and Promotion Agency of Turkey (ISPAT), Arda Ermut, said that the two countries’ true potential is yet to be realized.
“While the scope of our economic cooperation is getting wider every year, there is still ample room to grow. Raising bilateral trade and investments would mean a more inclusive and sustainable growth for Turkey and Saudi Arabia, the region’s two leading economies. Moreover, the joint projects by Turkish and Saudi businesspeople in third countries would strongly contribute to regional development as well. In other words, further strengthening the economic cooperation and partnership between the two countries will not only benefit our countries, but the entire Middle East by setting an example of a relationship that has reached a strategic level in every aspect,” ISPAT president remarked.
Bilateral Commercial and Economic Relations:
Turkey’s foreign trade with Saudi Arabia (in million $)
2011 2012 2013 2014 2015
Export 2.763 3.677 3.192 3.048 3.476
Import 3.454 4.414 4.177 3.862 2.117
Volume 6.217 8.090 7.369 6.909 5.593
Balance -690 -737 -986 -814 1.358
Source: TUIK
Turkey’s exports to Saudi Arabia: Electrical machinery and equipment, carpets and mats, matting and tapestries, mineral fuels and oils
Turkey’s imports from Saudi Arabia: Plastic and articles thereof, organic chemicals, aluminum and articles thereof, mineral fuels and oils
Number of Saudi visitors: 341,786 (2014); 450,674 (2015)
Bilateral Cooperation Mechanisms:
Joint Economic Commission (JEC) Meeting: Last meeting of the JEC was held on Nov. 5-6, 2013, in Ankara. Deputy Prime Minister Lütfi Elvan is the co-chairman of the JEC.
Land Transport Joint Commission Meeting: Last meeting of the Turkey-Saudi Arabian Land Transport Commission was held on Dec. 20, 2011, in Ankara.
Business Council: Turkish-Saudi Business Council was established on Oct. 11, 2003, in Jeddah. The last meeting of the Council was held on Dec. 7-8, 2015, in Istanbul.
