Qatar’s economy is highly dependent on hydrocarbons. Due to the fall in energy prices, Qatar has been seeking to diversify its economic base. The opportunity cost of making structural reforms becomes relatively low for hydrocarbon economies during low energy prices. Therefore, this is the right time to work more on the diversification of economic activities. Qatar and other Gulf countries have been taking this issue more seriously since 2015, when global hydrocarbon prices fell dramatically. If they don’t, their economic prosperity will be under threat.

On the other hand, due to its heavy dependence on foreign energy resources subject to unpredictable geopolitical winds, Turkey has been seeking to diversify its imported energy resources. Turkey and Qatar can cooperate to meet these diversification targets.

Turkey and Qatar should work more on long-term liquefied natural gas agreements. Both countries can make joint investments in underground natural gas storage plants. On the one hand, these investments will help Turkey to get more reliable access to natural gas. On the other hand, they will provide an opportunity for Qatar to sell its natural gas to other potential markets more easily.

The defence industry is another area where both countries can work together. Private companies in Turkey have aggressively invested in the defence industry for the last few years. The public side is also giving full support to these companies. In recent years, Turkey has begun to produce its own weapons, tanks, armed helicopters, drones and military vehicles. Future joint investments of these two countries will not only be crucial for security issues, but also pave the way for new R&D activities and innovations.

Qatar is highly dependent on imported agricultural products. Although agriculture is a crucial sector for Turkish economy, Turkey has been unable to exploit its full capacity in this sector, mostly due to a lack of technological investment. Qatar can invest in promising agriculture areas and companies in Turkey. These investments will be beneficial for both sides. While these investments will enable Qatar to reach agricultural products at a lower price, they will increase Turkey’s agricultural production and export.

Another sector of cooperation is the health care system, which Qatar wants to reform in order to improve its quality. According to the results of one survey, 43 percent of Qataris would prefer to go abroad for the treatment of serious health problems. These results show that Qataris do not trust their health system too much. Turkey has improved its health system since 2003 and it has become one of the top destinations in health tourism. Turkey can share its know-how on the health system with Qatar. Turkish hospitals and healthcare groups can also make investments in Qatar.

At a more macro level, Turkey has established a sovereign wealth fund (SWF) to generate long-term and low-cost finance for strategic and large-scale investments. Turkey is taking baby steps on the SWF now. But Qatar is a mature country regarding the SWF. The Qatar Investment Authority has good experience in this area. Therefore, Qatar can share its experiences with Turkey.

Another lucrative sector is Islamic finance, which Turkey and Qatar both aim to develop within their current financial systems, and to become global players in this field. The two countries can forge strategic partnerships in Islamic finance. Strengthening the capital structure of existing Islamic banks and establishing new ones will move both countries to the upper class of this sector.

With all of these opportunities available, mutual foreign direct investment (FDI) in the defence industry, agriculture, health and banking sectors between Turkey and Qatar will be expected, if both countries build their investment cooperation based on technology and the transfer of experience. Both countries have attracted a significant amount of FDIs since 2000s. But, Western multinational companies are not so eager to share know-how and technology with domestic companies in the host countries. Therefore, Turkey and Qatar cannot reap the fruits of FDIs fully. Mutual investments in strategic sectors between Turkey and Qatar will bring not only static but also dynamic gains to both countries.

To strengthen economic relations, first, Turkey and Qatar should finalize the ongoing free trade agreement negotiations. This free trade agreement will significantly expand bilateral trade between two countries. Secondly, the Central Bank of the Republic of Turkey and Qatar Central Bank can also make an agreement that will enable the use of local currencies as the medium of exchange in bilateral trade. Last but not least, investment agencies from both countries should work together to channel Turkish and Qatari investors towards these and other promising sectors

That operates mostly in Saudi Arabia?

Our family construction company operates in Saudi Arabia and Africa. We have several projects at the moment: a small stadium and a dialysis center in Algeria; an embassy building in Burkina Faso in Africa; and schools and other commercial buildings in Saudi Arabia. These are our major projects in the pipeline.

How about your investments in Turkey?

We started real estate investment in Turkey 5–6 years ago. We built a compound (Arterium Villas in Istanbul) that consist of 32 town houses, each block consists of four town houses. Then we started a bigger project: Nivo. It is being built on a 40,000-square-meter piece of land but the total size of construction is approximately 180,000 square meters. It is comprised of six towers; more than 1,000 apartments and 200 commercial shops. We have finished the excavation and just started the foundations and hoping to finish it in three years. Marketing has already started. For the future, we are looking for other opportunities in the IT, energy, and medical sectors. However, healthcare and education are my real fields of specialty.

As far as I understand, the real estate investment is just a beginning for your other investments in Turkey. Towards which sectors do you want to expand your investments? Healthcare, information technologies, or others …?

We started with a small real estate investment to learn the regulations and the investment environment in Turkey. Now, I am aiming to expand our business in healthcare, and the IT sectors because I think there is potential in IT in Turkey.

What motivated you to invest in Turkey?

Any investor looks for diversification, so do I. It is also true for my major investment in Saudi Arabia, where I always look for diversification. First, I chose Turkey because of its clear laws and regulations for investment. If you go through laws and regulations and hire proper lawyers, you won’t face any problems and your investment will be safe here. From my experience, this is a matter of fact. My second motivation is the geographic location of Turkey, I think of its location as being in the middle of the world. It is close to East, West, North, and South. My third motivation is related to the basic assets of the Turkish economy which is very important for me. There is an energetic population, strong export capacity and a hardworking labor force. My fourth motivation is culture. I believe that we share a common culture and values.

In Turkey you feel as though you are home, not like a stranger as you feel in other countries. Many of my friends and relatives have difficulties when they travel to the West. For example, as you know in France there are laws recently against hijab, also some other difficulties in Germany, etc. This makes investors and their families uncomfortable.

Is it particular or habitual for Saudi investors that, whenever they start an investment in a country, they bring their families too?

Well, actually, we prefer to mix business with tourism and pleasure. My family has its own schedule while I’m doing my business, and this makes me feel comfortable. Otherwise, I have to be part of the touristic planning. Luckily, here in Turkey, my family can easily arrange whatever they want by themselves.

You have already mentioned one advantage of investing in Turkey that laws and regulations are clear and if you follow the right path you can easily get the result. And what are the other advantages or disadvantages?

As I said, the advantages are related to the fundamentals of the Turkish economy. There are almost 80 million people in this country, so the demand is strong. The infrastructure for industry is solid. You have skilled people, knowledge, and advanced communications technologies. The banking system is there to support you, so these are all good advantages. The thing that I hope to see improve is less bureaucracy and a stable currency (lira). You can make a profit but you might lose a part of it if the value of the lira loses against foreign currencies. One more point to add to the advantages is the government’s clear vision for 2023. We can see that people are planning around it and they really know what they are doing that I find it very positive.

So, you said that Turkey has a clear vision for 2023 and this, as an investor, gives you the anticipation for a brighter investment environment in Turkey and this motivates you to invest. Let’s be more factual. You said that the currency should be stable. What sort of disadvantage have you faced so far?

Since we started our business until now, the Turkish lira has lost about 30 percent of its value. Five years ago, the US dollar was about 2 liras and now it is 3. Unstable currency make investors lose some profits. Of course the fluctuation in the currency price is normal, and every country has fluctuations, but the ups and downs should be within reasonable limits.

It was recently discussed that the currency fluctuation happened in most of the rapidly developing countries, from Brazil to Turkey to India. They all went through this. So, investing in rapidly developing countries might bear such risks, is that right?

Sure, but 30 percent is still high. I know Turkey is an emerging market, and in emerging markets you expect fluctuations, but it shouldn’t take a long time to stabilize a currency. This does not mean that the value of the lira should be fixed. It should be open to the market. I think the foreign currency deficit is the reason behind devaluation, and Turkey must handle this.

When you look at the Turkish economy, as a foreign investor, what attracts or surprises you most?

There is nothing surprising, but the strong demand in the market and the ability to export really attract me. Turkey has good export experience and the 2023 vision foresees an increase in export to $500 billion dollars. Of course geopolitical situation and unending troubles in the region are affecting all countries, but I hope it will stabilize soon.

And your suggestions?

I would suggest that bureaucracy is eased a bit more. There should be satellite offices, for instance, in the local municipalities to help investors solve their issues quickly. This will facilitate the work. Applying to the main investment agency for every case is not always convenient.

So, you expect a kind of facility that provides fast communication between the investment agency and the investor.

Yes, this would be my suggestion. Also, I would like to see more active use of mergers and acquisitions in the Turkish market. There are lots of small and middle-sized Turkish companies which is a good sign because if they join their forces together, they can become regional players. This merger will enable the new joint company to have better management because they could pay high salaries for good CEOs and, as a result, have a good strategy and strong marketing abilities. Small and medium companies cannot afford to spend large sums of money and explore new markets.

That sounds quite right.  How about your sector in Turkey? The real estate sector is very developed in Turkey and some believe that it has developed too much.

It is true that there is too much activity in the real estate sector, yet it is not sophisticated enough. There is still a lot to do to make the real estate market sophisticated and more developed. In fact, real estate funds are very low. Although real estate activity in Turkey is very high and here is a lot of constructions, but it’s not sophisticated.

What do you mean by sophistication?

What I mean is that there should be more options to invest in and exit from the real estate investment. For example, there could be RIET, fixed income, real estate funds, etc. that help investors to get in and out of their investments smoothly by selling or buying units in these funds. Instead of the current situation where you fund it yourself through bank credit or sales that blocks you for 4-6 years until you fully finish the project. These real estate funds provide flexibility to investors whereby they can come in and out more conveniently, and more importantly to allow small investors to invest. For example, Borsa Istanbul has started to provide real estate funds in the past few years, and this is a good start. This is what I meant by the sophistication of real estate funds.

There are other companies doing business in your sector. This can be real estate or others. But let’s talk about a bit more on the healthcare and IT sectors. How do you see them in terms of technology, the amount of export, total sales, firm size, and R&D expenditures? How about other companies doing business in these sectors?

On one hand, the IT is emerging now in Turkey and I think there is a promising opportunity of consolidation and merger and acquisition in this sector. On the other hand, in the healthcare sector, you cannot establish a new stand-alone hospital unless you have a faculty of medicine connected to it, while in the case of Class A dental hospitals, if you are a foreign investor you can only own maximum of 49% of the total shares and dentists themselves can own the rest. It will be better to open healthcare sector to foreign investors as it is an attractive business and there are a few big players in the industry now. I believe that the healthcare market is capable of attracting more investors since there are more than 35–40 million tourists coming to Turkey every year in addition to the almost 80 million Turkish citizens.

How about the cooperation opportunities in the education sector? Some Arab families have their own flats in Turkey and their children apply for graduate education to Turkish universities. Do you think there is potential?

Of course, it would be a good idea to focus on attracting Gulf students who are studying abroad and looking for better alternatives. In addition, students are faced with various, and mainly cultural difficulties in the western countries. Turkey is a developed country and among the few stable countries in the region, so Turkey is a good option for Middle Eastern and particularly Gulf students. I think Turkey should capitalize on this opportunity to open and enlarge the education sector especially in higher education through Masters, PhD and joint research programs. Take healthcare for example, it is a sector that has developed a lot, that is if you have Arab graduates from Turkey, they would certainly attract their patients from the Middle East. Turkey has a good higher education system and you can easily accommodate large numbers of foreign students who would promote Turkey in the future.

One of your investments in Saudi Arabia is in the education sector, is that right? And you know there is a Turkish–German university already opened and there is a Turkish–Japanese university, and the construction is underway. But why is there is no Turkish–Saudi, Turkish–Jordanian, or Turkish–Lebanese university?

This is a very good question. I think the reason behind is that we are still developing our education systems, and such extensive cooperation needs time before people engross the knowledge of differences and compatibilities of our education systems. The higher education in Saudi Arabia is an amalgamation of the UK, the US and German university systems, so we need to work on the compatibilities of the university systems. Are the universities you mentioned for profit or non-profit?

Foundation (Vakıf) universities in Turkey are non-profit institutions and their income helps them, in theory, to finance their budgets, advance their quality, and further their facilities. Long-term social, political, and economic effects of such international schooling initiatives sound exciting and promising, aren’t they?

Yes, sure. I think it would be better to have more endowments. There are many people in the West who contribute to universities for various reasons: they might have studied there; or, some of their family members might have had treatment there and etc. Nowadays people have started coming to Turkey for treatment. And, by the way, the healthcare system in Saudi Arabia is advanced and has a good service offered by skilled doctors and trained nurses, who are well equipped with high standard facilities. But still, there are many people, Saudis and non- Saudis, going abroad for treatment. There are about 10 million non-Saudis living in Saudi Arabia that find medical treatment in the Kingdom expensive, therefore they prefer to go abroad. Nowadays, they go to Jordan that is still doing well. In the past, they went to Lebanon and to Egypt, but now Egyptian healthcare systems and hospitals are no longer preferable. I think Turkey is a good alternative instead of going to some European countries or to the United States.

There is also the fact that some Europeans prefer Turkey for medical treatment.

That’s true, but you need to market it to people. Once, I was invited by Turkish Airways to visit hospitals in Turkey as I chair a healthcare company in the Kingdom. I met with key people in the Turkish health sector and I am convinced that there’s a lot of advancement in Turkey. But it is under-marketed and no one knows about it in Saudi Arabia. Maybe the best way is to organize joint conferences and meetings for graduate students. This needs some effort from the Turkish side to introduce what they can offer to the region. I know a lot of Syrians, Libyans who come here for medical treatment, so you need to work on it and conduct good marketing of what you have.

My last question is about July 15, I mean, the defeated coup attempt. Do you think it will have an effect on the Turkish economy or will it change your future plans in Turkey?

I believe that the fundamentals of Turkish economy is stronger than ever, so we plan to continue and increase our investments. During the coup attempt, I was in Istanbul and I went out with my son to see what is going on. I noticed that the Turkish people would never tolerate going back. Turkish people became accustomed to advanced living standards. I have known Turkey for the last 40 years. Now, Turkish economy has grown and advanced to the extent that Turkey became a member of the G20.

Take the healthcare sector for example; when the father of my Turkish driver had a heart attack, they immediately took him to the hospital and had given the necessary treatment and his insurance covered all the expenses. This is great! Years ago, he would probably have died. Turkish people would not tolerate the loss of such living standards. I think the coup plotters haven’t thought about it.

Furthermore, the coup attempt illustrated the strong desire for democracy and they would not accept the dismantling of the democratic system. People believe in democracy and that gave us all confidence and guarantee of stability of the Turkish democracy. It is proven in the streets by the people not by promises or statements from politicians.

So, at the grassroots level, you think that the stability is guaranteed by the will of the people and this makes you confident to invest further in Turkey.

Sure, and I want to extend my condolences to the families of the martyrs and my prayers for those who were injured, may Allah give them strength to recover soon. When we went out to the streets on that night of July the 15th, we saw people were raising Turkish flags; men and women with their children were in the streets at 2:00 a.m. in the morning; calls from the minarets were echoing; and the municipality trucks like fire engines, garbage trucks and others were brought just to give support to the government. The incident proved that democracy has great supporters in Turkey.

Yes, and the economy stayed stable.

The tourism sector was expectedly affected to some extent due to media. There were calls from Saudi Arabia to its nationals in Turkey. We were asked whether we wanted to return back. But we told them we are safe and we are staying. On the next day, we went out to buy our daily groceries and we found shops were open as usual as if nothing had happened. In Başakşehir, nothing changed. People were doing their daily routine. To date, lots of people continue to come to Turkey, including my own family.

Mr. Tarek al-Kasabi, thank you very much for this interview.