Qatar to invest $15bn in Turkey; Sheikh Tamim meets Erdogan
Ankara slaps retaliatory tariff hikes on key US products
ANKARA: Qatar yesterday promised to make a $15 billion direct investment in Turkey which was hit by a currency crisis amid a widening diplomatic standoff with the United States. Qatar’s royal court released a statement saying the Qatari amir “issued directives that will see the State of Qatar to provide a host of economic projects, investments, and deposits” worth $15 billion to support the Turkish economy. Presidential spokesman Ibrahim Kalin praised Turkish-Qatari relations on Twitter. “Qatar has pledged $15 billion of direct investments in Turkey. Turkish-Qatari relations are based on solid foundations of true friendship and solidarity,” he wrote. “The fundamentals of the Turkish economy are robust and Turkey will emerge stronger from this process,” he added.
The announcement came after Qatar’s Amir Sheikh Tamim bin Hamad Al-Thani held lunchtime talks with Turkish President Recep Tayyip Erdogan. A presidential source also confirmed Doha’s pledge to “rapidly implement the $15 billion investment package”. Turkish Finance Minister Berat Albayrak, who is Erdogan’s sonin-law, and his Qatari counterpart Ali Sharif Al-Emadi were present at the talks in the capital Ankara. Turkey and Qatar, a very close US ally, have become close economic and political partners in recent times.
Meanwhile, Turkey hiked yesterday tariffs on imports of several key US products in retaliation for American sanctions against Ankara, as a bitter dispute between the two allies that has battered the
Turkish lira showed no sign of ending. The lira which lost just under a quarter of its value on Friday and Monday - however continued to claw back some ground on financial markets, rallying around five percent against the dollar.
A court meanwhile rejected an appeal for the release of American pastor Andrew Brunson - whose detention for almost two years sparked the crisis - leaving no immediate solution to the Turkey-US row in sight. The lira’s fall had raised fears Turkey was on the verge of a fully-fledged economic crisis, especially in its banking system, that could spill over into Europe and other markets. Turkish Vice President Fuat Oktay said that the tariff hikes were ordered “within the framework of reciprocity in retaliation for the conscious attacks on our economy by the US administration”.
The hikes were published in Turkey’s Official Gazette in a decree signed by Erdogan, who has repeatedly described the crisis as an “economic war” that Turkey will win. President Donald Trump had previously announced that the United States was doubling steel and aluminium tariffs on Turkey. The Turkish tariff increases amount to a doubling of the existing rate, the state-run Anadolu news agency said, in an apparent parallel response to Trump’s move. The decree said the move brought tariffs to 50 percent on imports of US rice, 140 percent on hard alcoholic drinks like spirits, 60 percent on leaf tobacco and 60 percent on cosmetics.
Trade Minister Ruhsar Pekcan said Turkey had doubled tariffs on 22 products imported from the United States, saying the tariffs were together worth an additional $533 million. Erdogan’s spokesman Kalin added: “Turkey is not in favor of an economic war with anyone but when attacked... will take all necessary steps.”
Erdogan on Tuesday said Turkey would boycott US electronic goods like iPhones. Moves by the central bank to ensure Turkish banks have liquidity and a planned conference call by Turkish Finance Minister Berat Albayrak, who is Erdogan’s son-in-law, today have gone some way to reassuring investors. Some 3,000 investors registered to join Albayrak’s planned teleconference, the private NTV broadcaster reported.
The lira was trading yesterday at 6.0 to the dollar, a gain in value on the day of 5.2 percent. It was boosted after the Turkish banking regulator cut the amount of funds banks can use for currency swap trading, limiting the possibilities for speculating against the lira. But analysts say such measures are artificial stopgaps and do not deal with the core issues hurting Turkey’s economy - especially inflation approaching some 16 percent - which are crying out for a sharp interest rate hike.
As a court in the western Turkish city of Izmir rejected a new appeal to free Brunson yesterday, Kalin said the US needs to be respectful of the judicial procedures in Turkey. Erdogan has warned Turkey could seek alternative partners, pointing to Ankara’s strong ties with Russia, Iran and China. “The US is our major trade partner but it’s not the only one,” Pekcan, the trade minister, was quoted as saying by the official Anadolu news agency. “We have other partnerships and alternative markets.”
Turkish officials have been keen to emphasize that Ankara wants to retain strong ties with Europe, which has also expressed deep unease with Trump’s trade policies. Erdogan spoke on the phone with German Chancellor Angela Merkel yesterday, the Turkish presidency said while he is due to speak with French President Emmanuel Macron today. Relieving tensions in a case that annoyed Brussels, a Turkish court Tuesday released two Greek soldiers detained since March on espionage charges for illegally crossing the border. An Istanbul court also ordered the release of Amnesty International’s Turkey chair Taner Kilic who has spent more than a year in jail over alleged links to a failed coup in 2016.