- Turkey’s Relations with the Gulf Cooperation Council from 2003 to 2007: New Paradigms?
In this essay I seek to document and analyze the relations between Turkey and the countries of the Gulf Cooperation Council (GCC) — Bahrain, Kuwait, Qatar, Saudi Arabia, the United Arab Emirates (UAE), and Uman — during the period from 2003 to 2007. I focus especially on their increased trade, economic, and political relations after the US invasion and occupation of Iraq on 19 March 2003. Bulent Aras has discussed the growth of Turkey and GCC relations during the 1990s up to 2003.1 Aras attributed the increase in Turkey and GCC relations to several factors: the ongoing Iraqi crisis, Turkey’s European Union membership process, the threat of international terrorism and al Qaeda, the United States – led Wider Middle East Initiative (WMEI), increasing business and trade relations, Turkey’s increased profile in the Organization of Islamic Congress meetings, and issues concerning the wider Muslim world.
Almost all the issues that Aras said influenced Turkey-GCC relations still obtained throughout 2007, although some of them were of less importance than during the period from 2001 to 2003, such as international terrorism, and some were of more importance, such as Iran’s efforts to strengthen its nuclear energy capabilities and to consolidate its influence in Iraq, in the Persian Gulf, and in the Middle East region. What is emphasized in this essay is the increase in trade and economic relations between the two entities, [End Page 68] especially the increase in construction on the part of Turkish companies and the growth of investment in Turkey’s real estate, banking, and telecommunication industries by gulf country investors or by companies controlled by GCC investors.
In addition to factors facilitating GCC-Turkey relations mentioned by Aras, other factors began to play major roles in the expanding relationship by 2005. One was the changed geopolitical projection of power of the GCC countries due to the war in Iraq, especially, as a result of US inability to stabilize the situation, to contain increased sectarian fighting among the Arabs of Iraq, or to slow the increasing autonomy of regions of northern Iraq controlled by the Kurds. The second major change that occurred in the region after the US invasion and occupation was the steady growth of Iran’s influence in Iraq. A third factor was the greatly increased amount of funds available to the GCC states due to the increase in oil prices, especially in 2005 and in 2006 when oil prices rose to $70 per barrel, before declining in late 2006. In late 2007 oil prices nearly hit $100 per barrel before slightly declining by the end of the year. In 2006 alone it was estimated that the GCC countries had oil revenues of more than $400 billion, and 2007 revenues were expected to climb to $500 billion. With large amounts of funds available to invest after taking care of domestic needs and debts, the GCC countries began to look increasingly for markets other than the United States or Europe. Turkey was an obvious choice for such funds, with a population of 75 million, a dynamic and fairly well educated young population, and annual growth rates of 5 to 6 percent during the years 2003 to 2007. Turkey is an attractive country to invest in. Turkish construction companies, which have an excellent, worldwide reputation for building good, solid, cost-effective buildings, were attractive for the GCC states, especially Abu Dhabi and Dubai, which were experiencing construction booms. Turkey was an obvious choice for GCC investments.
The Arab Countries of the Persian Gulf and the Wider Middle East Initiative
Turkey’s participation in the WMEI (largely defunct by 2006 as a result of the US occupation of Iraq and its consequences) was still relevant in late 2005 with the commitment of Arab countries of the Persian Gulf (hereafter, [End Page 69] the gulf Arab countries) to invest in the Turkish economy.2 Turkey made great efforts to attract investments from the gulf Arab countries flush with windfall profits from the unexpected high price of oil from 2005 to 2007.3 In November 2005, Prince Muhammad bin Rashid al-Makhtum of Dubai...