Turkiye and Saudi Arabia have been at odds over a murder that occurred in the Saudi embassy in Istanbul. The Turkish president blamed the crown prince, Mohammed bin Salman, for ordering the murder of Saudi journalist Jamal Khashoggi. Furthermore, the Erdogan administration has been lending support to the Muslim Brothers movement, a Muslim group that Saudi Arabia opposes. As a result of these two criminal and political issues, Saudi Arabia began imposing an embargo on Turkish products and severing ties.

Although there is no explicit embargo, Saudi imports from Turkiye fell dramatically from $221 million to $16 million in 2021. In one month, the price dropped by 92%. In addition, Turkiye received investment funds from Saudi investors, resulting in a precipitous drop. Given that the Turkish economy requires funds to survive the recent deep economic crisis, this embargo resulted in a significant loss for Turkiye. For a few years, Erdogan insisted on blaming the prince in charge, but the economic difficulties Turkiye is currently facing forced his management to change its policy toward Saudi Arabia, and a deal has been sought with Mohammed bin Salman. Erdogan paid him a visit in Riyadh and hosted him in Ankara to ease tensions with Saudi Arabia.

Benefits of Improving Trade between Turkiye and Saudi Arabia

Saudi Arabia is one of the richest countries in the world, despite having industrial production problems. The main reason for this is that Saudi Arabia is a country rich in natural resources, and Saudi Arabian culture has not promoted industrial production sufficiently to compete in the international trade arena. The climate is not conducive to healthy agricultural production. As a result, Saudi Arabia is one of the world's largest importers. Saudi Arabia has announced a reform program to reshape the national economy and increase productivity. It employs two strategies: transferring technologies from developed countries and sending students to universities in developed countries to learn technology.

In terms of industrial production and technology, Turkiye is a more developed country than Saudi Arabia. Although Turkiye has not had a good year, the Turkish labor force is well-developed, and if the necessary conditions are provided for Turkish engineers, Turkiye has the potential to compete with developed countries. Given the large number of Turkish professionals living and working in other countries such as the UK, Germany, and the US, Turkiye will always have a chance to make a big jump in the short term with the right economic and human resource policies. The capital, however, has always been an essential missing component for Turkiye. Turkiye has a significant weakness: national savings have never been sufficient to support economic development.

Given the facts about Saudi Arabia and Turkey, fruitful cooperation between the two countries is possible. The capital is in Saudi Arabia, while Turkiye has a well-developed labor force. Turkiye can also supply agricultural products to Saudi Arabia at more competitive prices. Saudi Arabian investors can turn a profit in Turkiye, and Turkiye can boost its economic development.

Supporting SMEs Might Be Important for the Cooperation

Many students from Saudi Arabia and Turkey attend universities in Western countries. They are learning about modern technology and looking for work in other countries. If the necessary conditions for startup businesses as new SMEs in Turkey and Saudi Arabia are met, these young students can easily be transformed into entrepreneurs producing for their countries. Given Turkiye's technological and industrial infrastructure and setup for supporting new technology SMEs, providing funds for new entrepreneurship opportunities would make both countries more productive and enjoy higher levels of productivity.

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