Turkey's Crisis-hit Economy

Scrambling to draw foreign investors to ease Turkey’s hard currency crunch, President Recep Tayyip Erdogan’s government has once again turned to its closest ally, Qatar. Ankara has been eager to convey a semblance of renewed foreign capital flows to its crisis-hit economy.

Qatar has agreed to buy a stake in Istanbul's stock exchange in one of several deals worth billions of dollars and sell assets after a sharp drop in the value of the Turkish lira in recent years.

The latest deals, announced during Emir Sheikh Tamim bin Hamad Al Thani’s Nov. 26 visit to Ankara, include Qatar's purchases of a stake in Istinye Park, one of Turkey’s largest shopping malls, and a 10% share in the Istanbul stock exchange. 

The European Bank for Reconstruction and Development had previously bought the 10% Borsa Istanbul AS stake, but divested it last year, irked by Ankara’s appointment of Hakan Atilla, a Turkish banker who served jail time in the United States for helping Iran evade US sanctions — as the CEO of Borsa Istanbul.

The most controversial handover was that of Turkey’s top tank factory last year. The 25-year operational rights of the factory in the northwestern province of Sakarya were transferred by a presidential decree to BMC, a joint venture between the Qatar Armed Forces Industry Committee and a Turkish businessman close to Erdogan.

The new agreements, which followed some controversial deals in previous years, triggered political wrangling at home, as opposition parties blasted Ankara for mismanaging the economy and then “selling off everything to Qatar.” Is it so? What is the actual scale of Qatari investments in Turkey?

Government opponents, who charge that Ankara’s economic bonds with the Gulf monarchy are politically motivated and lack transparency, however, meet Qatar’s investments with suspicion.