Turkey and the UAE will develop closer economic ties and increase cross-border investment despite the financial crisis and lingering disputes over US$80 million (Dh293.8m) in unpaid contracting bills, a prominent Turkish businessman says.
Direct investments from the Gulf into Turkey accounted for only 2 per cent of overall foreign investment in the country, said Korhan Kurdoglu, the chairman of the Turkish-UAE Business Council.
And Mr Kurdoglu said only between 1 and 2 per cent of the GCC's total foreign investment went to Turkey, a state of affairs he expected would improve.
"It makes sense for both sides, for Turkish corporations to invest in this region and for Gulf corporations to invest in Turkish companies that will be coming back to this region to invest," he said. "So it will have a multiplier effect."
Turkish companies already have strong trade ties with many GCC countries including the UAE. It is Turkey's 11th largest trading partner, with exports to the Emirates valued at about $8 billion last year.
Dozens of Turkish contracting companies have worked on property and infrastructure projects in the UAE, including the Dubai Metro. Turkey's Yapi Merkezi joined a consortium led by three Japanese firms to build the elevated train system, which opened in September.
"There are a lot of small [Turkish] companies [in the UAE] and every day it is increasing," said Mr Kurdoglu, who is also the president of the Turkish conglomerate Ata Holding. "The highest presence is from the contracting side. Turkish contractors are now second in the world [in size] after China."
But the contracting and construction industries have felt the sting of the financial crisis keenly as property values dropped by an estimated 50 per cent this year in Dubai and ambitious developments were put on hold.
The dip in construction has led to a sharp decline in Turkish exports to the UAE, more than half of which have historically come in the form of steel reinforcing used in the construction industry.
Mr Kurdoglu said exports this year have dropped to $2.3bn from last year's high of $8bn largely because of the construction slowdown.
Turkish contractors are also among those owed money for work already completed by struggling property companies in Dubai.
British and Japanese contractors have made a political and diplomatic issue out of unpaid bills, which are estimated to be in the billions of dollars - much more than the $80m the Turkish Contractors Association estimates is owed to its country's firms Mr Kurdoglu said.
"We will continue to support [the UAE] and we are in this crisis together with the GCC, so there is not a big problem with big unpaid cheques," he said.
While companies from Turkey already have roots in the UAE, investors from the Emirates are only beginning to view Turkey as a prime target.
The country has a young population - the average age is about 27 - and a vibrant economy, as well as historical ties to the Gulf, all of which have helped it draw a number of large investors in recent years.
St Martins Property, a British firm owned by the Kuwait Investment Authority, bought the Cevahir Shopping Centre in Istanbul in 2007 for more than $500m.
Abraaj Capital, the Gulf's largest private equity firm, last January linked up with a Turkish company to buy a majority stake in Acibadem Healthcare Services and a related health insurance provider.
Invest AD, an Abu Dhabi Government-owned investment firm, last month bought a stake in the Turkish logistics firm Ekol Lojistik for ?50m (Dh264.9m).
Invest AD saw an opportunity to help a good Turkish business expand its footprint across the region, including into the GCC, said Serkan Kizil, the firm's senior vice president for private equity. With Invest AD's help, Ekol is already in talks to bring its business to Egypt and the UAE.
"The more the two countries start working together, not only on the government level but in private enterprise, and the more the trust environment keeps improving, more investments will come," Mr Kizil said.
"More investment will come to the GCC and there will be more GCC investment in Turkey to generate returns and bring back know-how. That will only improve and that is just starting to happen."
afitch@thenational.ae
Company%20profile
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The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
Ten10 Cricket League
Venue and schedule Sharjah Cricket Stadium, December 14 to 17
Teams
Maratha Arabians Leading player: Virender Sehwag; Top picks: Mohammed Amir, Imad Wasim; UAE players: Shaiman Anwar, Zahoor Khan
Bengal Lions Leading player: Sarfraz Ahmed; Top picks: Sunil Narine, Mustafizur Rahman; UAE players: Mohammed Naveed, Rameez Shahzad
Kerala Kings Leading player: Eoin Morgan; Top picks: Kieron Pollard, Sohail Tanvir; UAE players: Rohan Mustafa, Imran Haider
Pakhtoons Leading player: Shahid Afridi; Top picks: Fakhar Zaman, Tamim Iqbal; UAE players: Amjad Javed, Saqlain Haider
Punjabi Legends Leading player: Shoaib Malik; Top picks: Hasan Ali, Chris Jordan; UAE players: Ghulam Shabber, Shareef Asadullah
Team Sri Lanka Cricket Will be made up of Colombo players who won island’s domestic limited-overs competition
Neil Thomson – THE BIO
Family: I am happily married to my wife Liz and we have two children together.
Favourite music: Rock music. I started at a young age due to my father’s influence. He played in an Indian rock band The Flintstones who were once asked by Apple Records to fly over to England to perform there.
Favourite book: I constantly find myself reading The Bible.
Favourite film: The Greatest Showman.
Favourite holiday destination: I love visiting Melbourne as I have family there and it’s a wonderful place. New York at Christmas is also magical.
Favourite food: I went to boarding school so I like any cuisine really.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
TEACHERS' PAY - WHAT YOU NEED TO KNOW
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools
- average salary across curriculums and skill levels is about Dh10,000, recruiters say
- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance
- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs
- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills
- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month
- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues
COMPANY%20PROFILE
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The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
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The specs
Engine: 3.8-litre, twin-turbo V8
Transmission: eight-speed automatic
Power: 582bhp
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THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
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Price: From Dh1,350,000
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Brief scores:
Arsenal 4
Xhaka 25', Lacazette 55', Ramsey 79', Aubameyang 83'
Fulham 1
Kamara 69'