Turkey's Erdogan and Saudi Crown Prince embrace as years of rancour end

Turkish President Tayyip Erdogan and Saudi Crown Prince Mohammed bin Salman at the Presidential Palace in Ankara, Turkey, on June 22, 2022. PHOTO: REUTERS

ANKARA (BLOOMBERG, AFP) - Saudi Crown Prince Mohammed bin Salman and Turkish President Recep Tayyip Erdogan used a lavish reception in Ankara on Wednesday (June 22) to turn the page on years of rancor that had brought trade and diplomatic ties to a virtual standstill.

Erdogan welcomed the crown prince with full military honors as blue-uniformed presidential guards on horseback carried the flags of both countries.

The two leaders smiled and embraced ahead of the national anthems. 

Prince Mohammed’s visit is the first by the de facto Saudi ruler since the 2018 killing of Washington Post columnist Jamal Khashoggi, who had criticised the prince’s policies, at the Saudi consulate in Istanbul severely strained ties between the two regional powers. 

Back then, Erdogan’s aides appeared to revel in releasing gory details of how Saudi agents had dismembered Khashoggi, putting the heir to the throne under immense international pressure.

In the United States, Joe Biden vowed during his election campaign to turn the world’s biggest oil exporter into a pariah.  Times have changed.

Biden will make his first visit to Saudi Arabia next month as the Russian invasion of Ukraine pushes up gasoline prices at home.

And as Turkey struggles with a weak currency and inflation above 70 per cent, Erdogan also stepped up his efforts to rebuild ties with the kingdom and draw investment ahead of presidential and parliamentary elections next year.

Two Turkish officials involved in talks with the Saudis said Ankara is seeking to secure a currency swap deal, akin to several that Turkey has implemented with other countries in recent years.

It’s one of several options being discussed to secure foreign inflows from the world’s biggest oil exporter, which is flush with cash from high oil prices.

A deal could ease pressure on Turkey’s battered currency and help the government cope with the rising cost of energy imports.

Turks' living standards are imploding one year before a general election that poses one of the biggest challenges of Erdogan's mercurial two-decade rule.

Separately Turkish companies have complained of an unofficial boycott of the country’s goods after shipments to Saudi Arabia slumped in late 2020. Last year, Turkish exports were just over US$200 million (S$278 million), down from around US$3.2 billion in 2019, according to official Turkish data.

A rapprochement with the United Arab Emirates last year has unlocked billions of dollars worth of potential business, something Turkey hopes to emulate with Saudi Arabia.

The UAE signed a US$4.9 billion currency swap with Turkey in January, offering Turkey’s beleaguered currency much-needed support. The Gulf state has also outlined plans for a US$10 billion fund to support investments as it seeks to at least double bilateral trade. 

The talks in Ankara between Crown Prince Mohammed and Erdogan come one month before a visit to Riyadh by United States president Joe Biden, for a regional summit focused on the energy crunch caused by Russia's invasion of Ukraine.

"I think this is probably one of the most significant visits to Ankara by a foreign leader in almost a decade," said the Washington Institute's Turkey specialist Soner Cagaptay.

"Erdogan is all about Erdogan. He's all about winning elections and I think he has decided to kind of swallow his pride."

Dr Cagaptay said Prince Mohammed is also trying to see whether he can win broader backing ahead of a possible new nuclear agreement between world powers and the Saudis' arch-nemesis Iran.

"I think the Saudis are hedging their bets," Dr Cagaptay said.

Turkey's rapprochement with the Saudis began with an Istanbul court decision in April to break off the trial in absentia of 26 suspects accused of links to Mr Khashoggi's killing and to transfer the case to Riyadh.

US intelligence officials have determined that Prince Mohammed approved the plot against Khashoggi - something Riyadh denies.

The court's decision drew strong protests from Khashoggi's Turkish fiancee, Ms Hatice Cengiz.

But it paved the way for a visit to Saudi by Erdogan three weeks later, when he hugged the crown prince.

"He gets off the plane and hugs the killers," fumed Turkey's main opposition leader Kemal Kilicdaroglu - Erdogan's likely chief rival in the presidential race. "You should be ashamed," he said.

Ankara expects the mending of fences between the two Sunni powers to help prop up the Turkish economy at a crucial stage of Mr Erdogan's rule.

A Turkish official said the sides will discuss a range of issues that include cooperation between banks and support for small and medium-size businesses.

Mr Erdogan's unconventional economic approach has set off an inflationary spiral that has seen consumer prices almost double in the past year.

Analysts believe the resulting drop in Mr Erdogan's public approval and the depletion of state reserves means the Turkish leader can ill afford to maintain his hostile stance toward the petrodollar-filled Gulf states.

Turkey's problems with the Saudis began when Ankara refused to accept Egyptian President Abdel Fattah al-Sisi's ouster of the Muslim Brotherhood from power in Cairo in 2013.

The Saudis and other Arab kingdoms viewed the Brotherhood as an existential threat.

Those rivalries intensified after Turkey tried to break the nearly four-year blockade the Saudis and their allies imposed on Qatar in 2017.

Analysts believe that Washington is watching this gradual return of regional calm with an approving nod.

"Encouraged by the United States, this rapprochement is relaxing tensions and building diplomacy across the region," said Dr Gonul Tol, Turkish studies director at the US-based Middle East Institute.

But Dr Tol questioned whether Prince Mohammed was prepared to fully trust Mr Erdogan.

The crown prince "will not easily forget the attitude adopted by Turkey after the Khashoggi affair", she said.

"In the short term, I do not think there will be a dramatic improvement in the Turkish economy."

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