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Oman, Turkey - Strategic Alliance, Greater Business

Friday, 30 April 2010 14:52

Oman's growing strategic importance as a regional trading hub was reinforced this month during the first official visit to the Sultanate of Abdullah Gül, the president of the Republic of Turkey. Gül's visit, which saw the signing of a number of agreements between the two countries, coincided with the announcement of a strategic alliance between The Zubair Corporation, one of Oman's largest business houses, and Turkish group Tefirom. The alliance, which will involve the development of a portfolio of business opportunities, could eventually reach a value of $500m.

Speaking on the second day of his visit at the Turkish-Oman Business Forum, Gül described Oman as "perfect" for the re-export industry. "Your ports are accessible to Pakistan, India, Africa and Iran, and also goods can be sold from here," he told delegates, adding he was hopeful of a sharp increase in bilateral trade between the two nations. The agreements signed included reductions in tariffs and Customs duties covering a wide range of goods, as well as criteria determining the origin and type of goods subject to favourable import and export terms. Both countries also agreed to cooperate in regards to organised crime in aviation and shipping.

Turkey, led by the pro-business AK Party, has become increasingly active in international trade in recent years, in particular seeking out new markets in Africa and the Middle East to add to its significant European trade. In developing this new policy, the republic has often looked towards the Gulf for its primary partners - relations with Qatar, for example, are particularly significant vis-à-vis the Levant, with the two often engaged in joint projects in Syria. It may be that Turkey wishes to extend that successful model to Oman, where major infrastructure upgrading at locations such as the port of Sohar provide, as President Gül noted, significant re-export opportunities not only for the rest of the Gulf Cooperation Council (GCC), but perhaps more importantly Pakistan, India and Africa. Vitally, Oman falls to the east of the Strait of Hormuz, placing it outside any potential blockade by or upon Iran.

Khalid M Al Zubair, director of Zubair Corp., told the press the companies were looking into opportunities in infrastructure, natural gas distribution, manufacturing, water management, waste water management and renewable energy. As well as projects in their own countries, the partnership may also be extended to work in neighbouring states, such as the rest of the GCC for Oman and Romania for Turkey.

Of those areas listed, wind and natural gas are likely to be among the most significant. Turkey has made major progress in the past few years in extending its wind generation capacity, and Tefirom alone has eight wind farm projects under way in the country, with a total targeted generation capacity of 549 MW. Wind energy projects will be among the first concrete investments undertaken by the partnership in both Turkey and Oman, while a variety of private participation models will be used by the companies - areas in which Turkish firms have wide experience, and where Oman is hoping to extend its own.

Also discussed at the meeting between the two states was the long-mooted GCC-Turkey free trade agreement - a key goal for the Turkish government as it looks to extend into markets to the south and east, and also likely to be of benefit to heavy-trading GCC members such as Oman. By positioning itself as a link in the chain between Turkey - the world's 16th largest economy and an emerging industrial powerhouse in the east of Europe - and other developing markets in the region, Oman also stands to secure its own continued growth.

Global Arab Network

This article is published in partnership with Oxford Business Group

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Last Updated on Friday, 30 April 2010 15:14

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