x Abu Dhabi, UAEThursday 18 January 2018

Turkey leads with investment in North Africa

Turkey's growing diplomatic role paves the way for Turkish businesses ready to invest and looking for contracts. It's a healthy trend.

From Tunis to Tripoli to Cairo, a lack of cash liquidity has stifled fledgling governments fresh from revolutions. To keep public employees paid, basic services running and food subsidies in place, the Arab Spring states have been turning to the international community for aid.

But stopgap funds will never be enough. Long-term economic stability, fiscal growth and job creation take more than handouts. And Turkey's high-profile diplomatic junket through North Africa suggests that Ankara understands this. Other countries should follow its lead.

As Prime Minister Recep Tayyip Erdogan tours Egypt, Tunisia and Libya this week, he does so with his nation's business community in tow. More than 280 businessmen and women, from oil executives to construction barons, are staking their claims.

By Wednesday, Turkish business interests had signed over $850 million in new deals in Egypt; Turkish firms had bid on millions worth of Egyptian defence contracts; and there were calls to triple Turkish investment in Egypt to $5 billion. "Why aren't you clapping?" Mr Erdogan joked with business leaders in Cairo.

There is reason to applaud. Industrial investment in North African and Arab state economies is one way to reshape a region long overly dependent on services and tourism. Investment in oil and natural gas projects, another idea floated by Mr Ergodan this week, could help as well.

Where are G8 countries and Gulf states in this new economic trajectory? So far, it has been mostly words. Despite a $40 billion aid package pledged in May, only a fraction has been delivered. Jalloul Ayed, Tunisia's finance minister, said during his visit to Abu Dhabi on Wednesday that his country had not yet received any funds.

Strong regional investment, not pledges, will be needed if Arab Spring states are to be able to rebuild their shattered economies.

The challenge for new governments will be to provide an environment in which investments benefit long-term private enterprise, rather than being frittered away in one-time handouts or siphoned off by members of the old regimes. The temptation will be to shun economic liberalisation in the name of populism, but the new governments will have to balance short-term stability with fundamental economic reforms.

Turkey has its critics, but if its foreign policy can translate into robust economic partnerships, Ankara has demonstrated another dimension of regional leadership.