turkey and uae trade relationship

Paritosh Kashyap

Turkey and UAE- Trade Relationship


Turkey and UAE are undergoing a very interesting phase in their bilateral

relationship, with trade between them undergoing a rapid escalation in the

last few years. Though still in its crawling phase, the bilateral trade

between the two nations has witnessed a significant growth. According to a

study conducted by researcher Ahmed Al-Ananbeh of MoFT’s Department of

Analysis and Trade Information, bilateral trade between the nations has

increased from US $ 2.074 billion in 2006 to US $ 7.99 billion in 2008.

Both Turkey and UAE offer a great case study to explore- one an oil rich

Gulf state with a small population- considered richest among the world in

terms of per capita income; other an emerging economy of great geo

political significance- placed between the crossroads of Europe and Asia

with a predominantly western orientation.

UAE is presently the 3rd largest export destination for Turkey with Turkey’s

export to UAE increasing from US $ 2.892 billion in 2006 to US $ 7.473

billion in 2008. There had also been a gradual increase in UAE’s non oil

export and re export to Turkey. In 2010 Turkey accounted for 1.4% of UAE’s

non oil trade with the world. Other than trade both the nations are also

exploring business opportunities with each other. Presently UAE’s

investments in Turkey are worth US $ 5.01 billion and turkey’s investments

in UAE are worth US $ 6.51 billion (moft.gov.ae, 2011).

In the light of growing relationship between the two nations the given

report is prepared to give a generalist overview- country profiles, nature of

trade, attractiveness of both the destinations etc.

Turkey and UAE: Country profiles

The following part will compare the two nations across various social and

economical parameters along with the graphical representation of data

pertaining to the trade figures of both the nations.

Parameters Turkey UAE

Paritosh Kashyap


Real GDP (PPP) US $ 952.6 billion US $ 246.8

GDP Growth Rate 8.2 % 3.2 %

GDP per Capita (PPP) US $ 13, 398 US $ 49,200

Inflation (CPI) 8.5 % 2.2 %

Current Account

Balance-US $ 48.56 billion + US $ 36 billion

Exports US $ 117.7 billionUS $ 195 billion

(Including Oil)

Imports US $ 166 billion US $ 159 billion

Table 1: - compares Turkey and UAE across various social and economic

parameters. Source of data: CIA fact books, Euro Monitor etc.

85 90 95 00 05 06 08 09 100

20

40

60

80

100

120

140

160

180

6.7 11.621.4 27.2

67.479.3

153.9

121.8132.1

Import in US $ billion

Import in US $ billion

Fig 1: Value of Import for UAE in US $ billion, over the period of last 25

years. Source: National Bureau for Statistics, United Arab Emirates

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85 90 95 00 05 06 08 09 100

10

20

30

40

50

60

0.3900000000000010.940000000000

001 1.54 1.954.48

7.96

16.34 17.722.6

1.163.17 4.42

7.08

26.01 26.03

44.3440.22

50.61

ExportRe Export

Export & Re Export in US $ billion

Fig 2: Value of non oil Export and Re Export for UAE in US $ billion, over

the period of years. Source: National Bureau for Statistics, United Arab

Emirates

85 90 95 00 05 06 07 08 090

50

100

150

200

250

7.9 12.921.6 27.8

73.585.5

107.2

132.1

102.1

11.322.3

35.754.5

116.8

139.6

170.6

201

146.8

ExportImport

Fig 3: Value of annual Export and Import for Turkey, in US $ billion, over

the period of years. Source: Turkey Statistical Institute, US dept of state

UAE Turkey: Trade Statistics

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Year Turkey’s Export to UAE

(million Kg)

UAE’s non oil Export to

Turkey (million Kg)

2006 2520 24

2007 3300 41

2008 6280 41

2009 2270 34

2010 1980 30

Table 2: Total weight of Export of Turkey to UAE and vice versa. Source of

data: National Bureau of Statistics, UAE

Year Turkey’s Export to UAE

(US $ billions)

UAE’s Export to Turkey

(US $ billions)

2006 1.89 0.05

2007 2.85 0.08

2008 7.47 0.25

2009 2.55 0.19

2010 2.48 0.16

Table 3 : Data pertaining to total value of Export of Turkey to UAE and vice

versa. Source: National Statistics Bureau, UAE

Nature of Trade B/W Turkey and UAE

Major exports from Turkey to UAE include aluminum, precious stones, food

stuffs and beverages, plastics followed by animal products, chemicals,

vegetable products etc. The following pie chart shows the percentage wise

break up of major export items from Turkey to UAE in 2010.

Paritosh Kashyap


39%

29%0%1%

3%

1%

4%1%

7%14%

abcdefghij

Fig 4: percentage wise break up of Turkish export to UAE in 2010

In the given figure

(a stands for base metals and their articles; b stands for pearls stones and

other precious metals; d stands for others; c stands for articles of woods; e

stands for food stuffs; g stands for textile and textile articles; c stands

vegetable products; f stands for plastic, rubber articles; h stands for

chemicals and allied products)

Total value of non oil exports from UAE to Turkey is US $ 160 million in

2010. The major export items are – Pearls and precious stones followed by

plastics, rubber etc. The following pie chart gives a percentage wise break

up the UAE’s export to Turkey.

Paritosh Kashyap


72%

4%

16%2% 2% 3%

ABCDEF

Fig 4: percentage wise break up of Turkish export to UAE in 2010

(In the given figure A stands for pearls and precious stones; B stands for

articles of stones, Mica etc; C stands for plastics, rubbers etc; D stands for

products of chemicals, E stands for food stuffs and beverages; F stands for

others.)

Future Prospect

Presently the trade between Turkey and UAE is in its crawling phase, with

GCC and UAE comprising a comparatively smaller share in Turkey’s overall

trade in the MENA region. But it has huge latent potential with both the

nations taking strong measures to boost their relationship further. In Q1

2011, the total trade volume between them stood over US $ 1.3 billion, 50

% increase compared to the same period last year. (Khaleej Times, 2011).

The following part of the report will evaluate the future prospect of trade

between Turkey and UAE.

Turkey’s attractiveness

Turkey is an attractive trade partner and investment destination for UAE.

Turkish attractiveness is due to a wide range of Economical, Socio-

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Cultural, Legal and Geographical factors stated below

(Middleeastelectricity.com , 2011) -

With a GDP growth rate of 8.2% in 2010- it is presently among the

fastest growing European nations.

Strategically well placed between the cross roads of Central Asia and

Europe- is well connected with 1.5 billion lucrative consumers in the

region.

60 % of its population is aged less than 30, providing a huge and

sustainable consumer base.

Turkish annual trade standing at US $ 320 billion in 2010- constituted

1 % of the world trade.

Turkey has strong presence in the MENA region making it easier for

UAE to build further relationship.

UAE and Turkey are Islamic societies with UAE once being part of

the bigger Ottoman empire. Both share rich and glorious Islamic

heritage and there is comparatively lesser cultural differences

between them.

UAE nationals do not require VISA before their arrival to Turkey.It

can be applied upon arrival.

Turkey is geo graphically close to UAE. Istanbul port is at a distance

of 6700 KM from Dubai (Jebel Ali port ) where as the aerial distance

is just 2995 KM. (The higher port distance is on account of ships

travelling via Suez Canal to reach each other)

UAE’s Attractiveness

UAE also offers attractive business opportunities for an emerging economy

like Turkey. Other than the common cultural and geographical factors that

is being shared, UAE’s strength lies in the following-

Paritosh Kashyap


UAE is among the richest nations in the world. With a GDP per capita

of US $ 40,000 in 2008, it was ranked as the 19th richest nation in the

world. (World’s richest countries.com, 2009). With an annual

disposable income of US $ 120 billion (2010) it offers a lucrative and

elite consumer base. (Euromonitor International, 2011)

UAE had been one of the fastest growing economies of the world in

the last decade. Due to global economic slump followed by real estate

crisis, GDP was hit hard in the last couple of years. But with oil

prices’ increasing again- the economy is back on track.

Dubai enjoys the status of a regional distribution center and is the 3rd

largest re export center after Hong Kong and Singapore. Dubai has

strong ambitions of transforming into a global trade hub. Jebel Ali

port with an annual capacity of 11.6 million TEUs is undergoing

expansion. Post expansion, the annual capacity is expected to

leapfrog to around 55 million TEUs by 2030.

UAE is strategically placed between the cross road of East and West

and North and South.

With the help of flagship carriers like Emirates Airlines and Etihad

Airways,UAE is well connected to whole world.

With ambitious plans such as Abu Dhabi 2030 and Dubai 2015- UAE

is aggressively attempting to transform and diversify its economy.

Once realized the plans are expected to provide ample business

opportunities for its trade partners.

Notwithstanding the attractive opportunities between Turkey and UAE as

trade partners, there are some hindrances as well. Lot of Turkish people are

interested in visiting Turkey for trade; however they need to apply for visa

before their arrival. (The same does not hold true for UAE nationals visiting

Turkey). Similarly downside of UAE is that though it is one of the richest

nations in the world, its small population of 4.7 million does not represent a

Paritosh Kashyap


very big consumer base. Turkey has bigger market bases- Russia, EU

nations, Poland- in its nearby vicinity. There are other areas of concern that

has to be taken care of in order to bolster the burgeoning trade between the

two nations.

Prospects of Turkish Export to UAE

Turkey has a well established textile industry. In 2009 the total textile

export valued at US $ 5.37 billion, comprised 5.3 % of the total Turkish

export. According to a WTO report- Turkish export constituted 3.3 % of the

global textile trade where as 17.5% of the European textile trade. Major

markets for Turkish textiles are European Union, Russia and other former

USSR nations (ITKIB, 2009).

Though not a major export destination, Turkish textile export to UAE had

burgeoned in the past few years. In 2010 it was valued at US $ 110 million.

The following pie chart shows the breakup of Turkish textile export to UAE

in 2010. Hence textiles offers a great area for Turkey to explore further.

0% 0% 1%0% 4%2%2%16%

1%

1%1%

31%

34%

5%

ABCDEFGHIJKLMN

Paritosh Kashyap


Fig 5: %wise break up of Turkish textile export to UAE

(In the given figure –

A SILK

B WOOL,FINE OR COARSE ANIMAL HAIR,HORSE HAIR YARN

C COTTON

DOTHER VEGETABLE TEXTILE FIBRES,PAPER YARN &FABRICS

E MAN-MADE FILAMENTS

F MAN-MADE STAPLE FIBRES

GWADDING,FELT,NONWOVENS;TWINE, CABLES,CORDAGE ETC.

H CARPETS AND OTHER TEXTILE FLOOR COVERINGS

I SPECIAL WOVEN FABRICS & TUFTED TEXTILE FABRICS

J TEXTILE ARTICLES AND FABRICS USED IN INDUSTRIES

K KNITTED OR CROCHETED FABRICS

L KNITTED OR CROCHETED ARTICLES OF APPAREL

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M ARTICLES OF APPAREL, NOT KNITTED OR CROCHETED

From the figure it can be comprehended that carpets and other floor

covering, knitted or crocheted apparels and articles of apparels not knitted

or crocheted constitute more than 80 % of Turkish export to UAE.

References:

1> Moft.gov.ae, 2011, moft releases study on UAE Turkey trade

exchange, available at http://www.moft.gov.ae/en/det.aspx?

detid=262&resourceid=30

Paritosh Kashyap

http://www.moft.gov.ae/en/det.aspx?detid=262&resourceid=30

http://www.moft.gov.ae/en/det.aspx?detid=262&resourceid=30


2>Khaleej Times, Turkey targets 20 % rise in food trade with UAE,

available at http://www.khaleejtimes.com/DisplayArticle.asp?

xfile=data/business/2011/July/

business_July203.xml&section=business&col=

3>Middleeastelectricity.com, 2011, Turkey-UAE investment reach $ 10

billion in 2010, available at

http://www.middleeastelectricity.com/Global/Middle_East_Electricity/

pdf/TurkeyUAEinvestmentshit10bin20104Mar11GN.pdf

4>World’s richest countries.com, 2009, home page, available at

http://www.worldsrichestcountries.com/

5>ITKIB, 2009, Turkish Textile Industry, available at

http://www.itkib.org.tr/english/about/sectors/textile/textile_info.pdf

6>

Paritosh Kashyap

http://www.itkib.org.tr/english/about/sectors/textile/textile_info.pdf

http://www.worldsrichestcountries.com/

http://www.middleeastelectricity.com/Global/Middle_East_Electricity/pdf/TurkeyUAEinvestmentshit10bin20104Mar11GN.pdf

http://www.middleeastelectricity.com/Global/Middle_East_Electricity/pdf/TurkeyUAEinvestmentshit10bin20104Mar11GN.pdf

http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/business/2011/July/business_July203.xml&section=business&col=



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