Popular Turkish soap operas that are no longer screened on Egyptian satellite TV channels and the recent fiery statements made by Egyptian and Turkish officials about each other's countries have been two signs of the ongoing political rift between Egypt and Turkey. Tensions started following the 30 June Revolution, when Turkish Prime Minister Recep Tayyip Erdogan condemned the toppling of former Egyptian president Mohamed Morsi by the Egyptian army, describing it as a “military coup” and enraging the Egyptian government and public. As a result, the situation today is very different from last year, when Turkey was on everyone's lips and there was a growing sentiment among both government officials and ordinary citizens of the need for Egypt to forge stronger links and foster broader economic ties with the country. Egyptian-Turkish economic rapprochement has always been significant for both countries, but it came under the spotlight under Morsi's administration. Given Turkey's significant economic progress over recent years and Egypt's faltering economy following the 25 January Revolution, the Turkish economic model was ever more alluring. However, the current political dispute has now raised fears about the future of the thriving economic relations between the two countries. There are currently some 280 Turkish companies operating in the Egyptian market, with total investments of $1.5 billion and employing some 52,000 Egyptians. Trade between Egypt and Turkey reached $5.2 billion at the end of 2012. Because of these figures, businessmen from both sides of the divide have decided to do their best to maintain good economic relations. Adel Al-Lamei, head of the Egypt-Turkey Business Council, said that Egyptian and Turkish businessmen had met in Cairo last month to find ways of separating political disagreements from economic cooperation. Al-Lamei said that Egypt's economic relations with Turkey were thriving and had extended over decades. Businessmen should avoid political disagreements, he said. However, he also pointed out that the current situation could have negative effects on economic relations, though he was hopeful that such tensions would end soon. “Relations between states normally have their ups and downs, and the current situation is a period that both states will eventually get through,” Al-Lamei said. The political situation had not prompted Turkish investors to abandon the Egyptian market, Hassan Erdem, chief commercial councillor at the Turkish embassy in Cairo, told Al-Ahram Weekly. “Businesses have nothing to do with politics. Businesses only seek profits.” Erdem said that Turkish investors were continuing to operate normally in Egypt and that there were no plans to withdraw from the market. He denied that there were calls to terminate the free-trade agreement (FTA) between Egypt and Turkey, saying that these were at best rumours. However, Erdem said that some Turkish investors were worried that the current political dispute could prompt the Egyptian authorities to act against them. “Things have been good so far, but investors are worried that if Turkey's critical stance on Egypt drags on, this might prompt the Egyptian authorities to react,” Erdem said. He added that the visit by Mounir Fakhri Abdel-Nour, minister of trade and industry, to two Turkish companies during his visit to the industrial zone of Borg Al-Arab in early August had been a good sign from the government that things would not change as a result of the political tensions. Though the political situation has not so far negatively affected existing Turkish businesses in Egypt, Erdem said that it could affect expansion plans among Turkish investors. Kordsa, a Turkish company that has been operating in Egypt for 20 years, had put an expansion plan worth some $140 million on hold until the political rift between Egypt and Turkey eased, Erdem said. “New Turkish businesses and expansion plans are now in wait-and-see mode,” he said. Tunc Ozkan, chairman of Polaris International for Industrial Parks, one of the large Turkish companies operating in Egypt, said that the current political situation would have no impact on economic relations and that business people always preferred to separate political and economic relations. “At the end of the day, governments can change, but economic ties are long-term that cannot be stopped just like that,” Ozkan told the Weekly, adding that he had not experienced hostile reactions from the Egyptian government. Although the Turkish business community was sad about the current political rift between Egypt and Turkey, “no one comes here because we have good relations with the Egyptian government. We are here looking for profits,” he said. Ozkan said that his company would continue to operate and invest in Egypt, while promoting the country to Turkish investors as a favoured place to invest. He said that Egypt enjoyed several economic advantages, including a strategic location, abundant human resources, and strong duty-free market access at the Qualifying Industrial Zones (QIZ) that follow a preferential trade protocol allowing Egyptian products customs-free access to US markets. There was also an integrated system of free-trade agreements between Egypt and Africa as well as with other Arab countries, he said. “No country is better situated than Egypt in these regards,” Ozkan said. However, he reiterated Erdem's view that the current situation could affect new Turkish entrants to the Egyptian market, who might postpone decisions until things settled down in Egypt. This was an attitude likely to be followed by all foreign investors, he said. “But despite these challenges, we haven't stopped operating or investing in Egypt because we know that these times will pass,” Ozkan said. Though there have not been negative reactions from the Turkish side, there have been calls inside Egypt to reconsider the country's economic ties with Turkey. Egypt's Independent General Tourism Workers Syndicate has called on removing Turkey as a tourist destination for Egyptians as it had failed to recognise the ouster of the Islamist former president. Bassem Halaqa, head of the Syndicate, said in a statement on Sunday that it would not accept Turkish intervention in Egypt's internal affairs, calling on Egyptians to “restructure ties” with states that back Morsi and the Muslim Brotherhood. The Ministry of Agriculture has also decided to halt cotton imports from Turkey in response to the country's stance. Economic relations between Egypt and Turkey have taken great strides over recent years, especially after the signing of the free-trade agreement between Egypt and Turkey in 2005 that came into force in 2007. According to Egyptian government figures, between 2005 and 2010 the volume of trade between the states increased from $954 million to $3.2 billion, representing a net increase of 349 per cent. Following the 25 January Revolution in Egypt, Turkish Prime Minister Erdogan visited Egypt twice, the first time in September 2011 and the second time in November 2012. On his last visit, Erdogan was accompanied by 12 ministers and a large number of businessmen with the aim of boosting relations between Egypt and Turkey.
