Türkiye and Arabia trade relations
1. Trade relations between Türkiye and Saudi Arabia
In recent times, there have been signs of rapprochement between the Republic of Turkey and the Kingdom of Saudi Arabia after a period of downturn in relations that lasted for several years. The volume of trade witnessed a significant decline in recent years, reaching its peak in 2016 at nearly 6 billion dollars, while there were concerted efforts by both countries to raise it to 25 billion dollars over the next decade.
However, there have been positive signs indicating the return of Turkish-Saudi relations to their previous state. For example, Turkish President Recep Tayyip Erdoğan had a phone call with Saudi King Salman bin Abdulaziz within the framework of the G20 summit in 2021, marking the first high-level contact between the two countries in a long time. Additionally, President Erdoğan recently announced that he will undertake an official visit to Saudi Arabia in February 2022.
2. The trade balance between Türkiye and Saudi Arabia in numbers
After Saudi capital flowed into Turkey, especially after 2011, when Turkish authorities allowed foreigners to own property in the country to encourage foreign investment, the investment relations between the two countries witnessed significant development. The number of Saudi companies operating in Turkey increased from 11 companies to more than 1100 companies, with an investment value exceeding 11 billion dollars, distributed across various sectors including agriculture, real estate, and energy.
Despite this advancement in investments, Turkish exports to Saudi Arabia witnessed a significant decline, reaching only 189 million dollars in the first 11 months of 2021, compared to 2.5 billion dollars in 2020, and 3.2 billion dollars in 2019. According to data from the Turkish Ministry of Commerce, Turkish exports to Saudi Arabia between January and August 2021 declined by 18% on an annual basis.
However, other figures from the Turkish Statistical Institute indicate that Turkey exported goods worth 3 billion dollars during the same period from January to November 2021, compared to 1.7 billion dollars in the same period of 2020, reflecting renewed confidence between the two countries.
These numbers illustrate fluctuations in the volume of trade between the two countries and its impact on economic and political factors. Nevertheless, the recent figures indicate an improvement in confidence between the two countries and their readiness to increase trade exchange in the future.
3. Saudi exports to Turkiye
Among Turkey's exports to the Saudi market, food products and various types of clothing stand out, along with tobacco products, textile industries, carpets, building stone, marble, and a diverse range of metal and wood industries. Trade in furniture, ready-made foodstuffs, textiles, fruits, and fresh vegetables are also among the most prevalent goods exported from Turkey to Saudi Arabia. The total Turkish exports of grains and legumes alone amounted to $181 million in 2020.
4. Turkiye exports to Saudi
In the first 11 months of 2021, Saudi sales to Turkey reached a record high of $3 billion, compared to $1.7 billion in 2020 and $1.9 billion in 2019. Chemical products constitute a significant portion of the trade exchange between the two countries, with Turkey importing $2.7 billion worth of chemical products during the period from January to November 2021.
5. Has import from Türkiye to Saudi Arabia been suspended recently?
The tension between Turkey and Saudi Arabia from 2018 to 2021, compounded by the ramifications of the COVID-19 crisis, significantly affected the trade volume between the two countries, witnessing a notable decline, amidst an unofficial boycott from the Kingdom's side. Over more than a year, there were speculations by some Saudi and Turkish traders that Riyadh was imposing an informal boycott due to political tensions between the two nations, leading to a halt in imports from Turkey to Saudi Arabia. Although this suspension came unofficially, it is expected that relations will regain their strength, especially considering Turkey's status as the ninth largest source of imported products to Saudi Arabia!
6. The future of Saudi-Turkish relations?
Amid the economic challenges posed by the COVID-19 pandemic, Saudi-Turkish relations appear promising for future cooperation, especially given the growing need for economic collaboration. Saudi Arabia has been affected by declining oil prices and reduced demand, while Turkey has experienced a depreciation of its currency and inflationary pressures. There seems to be a mutual willingness to capitalize on growth opportunities, particularly with economic initiatives like China's "Belt and Road." Regional competition encourages cooperation between the two countries, and it is expected that joint trade will be stimulated to reach higher levels in the near future, with expectations of its value rising to $3 billion.
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