The Unrealistic Potential of Turkey-UAE Defense Cooperation
December 10, 2021, 10:46 am

The Unrealistic Potential of Turkey-UAE Defense Cooperation

Dalia Ziada

Since the beginning of the year, the United Arab Emirates (UAE) has been exceptionally active in fixing its bilateral relations with Iran and Turkey. On the next day of Taliban’s seizure of power in Afghanistan, in mid-August, UAE’s National Security Advisor, Sheikh Tahnoun Bin Zayed, quickly arranged a visit to Ankara to meet with the Turkish President, Recep Tayyip Erdogan. Sheikh Tahnoun’s move and Erdogan’s quick response surprised observers due to the history of fierce rivalry between Turkey and UAE.

Three months later, on the 24th of November, Sheikh Mohammed Bin Zayed, the Crown Prince of Abu Dhabi and the de facto ruler of the UAE, led a high-profile delegation to Ankara to meet with President Erdogan and sign a dozen of memoranda of economic cooperation. At the end of the visit, Bin Zayed pledged to invest a total of ten billion dollars in the Turkish market, which is considered a booster shot to the declining lira and ailing Turkish economy. However, the two parties did not sign any military or defense-related cooperation, giving the impression that the newly established relationship between UAE and Turkey is purely economic. In other words, Turkey needed UAE money to rescue its suffering economy, and the UAE found a good investment opportunity out of the sharp decline in the value of the Turkish lira.

However, last week, Ismail Demir, the Chairman of the Turkish Presidency of Defense Industries (SSB), noted the potential of cooperation in the defense sector between Turkey and the UAE. “When we look at our defense industry figures, we see that our defense industry relations continued even during times of crises. There was contact even when relations were not at their highest,” Demir told the press. Indeed! the UAE purchased weapons from Turkey with more than 90 million dollars, during the first quarter of 2021, according to the statistics of the Ministry of Commerce and the Exporters Council.

Three days after Demir’s statements, on the 7th of December, while Turkey's President Erdogan and his top ministers were in Qatar for strategic talks, a UAE delegation visited Ankara for negotiating defense deals. To the anger of the ultra-nationalist Turkish public opinion, some reports claimed that UAE asked to buy shares in ASELSAN, Turkey's leading electronic defense manufacturer. On a side note, ASELSAN opened a branch in Doha, in January, as part of the military agreement between Qatar and Turkey. ASELSAN is already listing about one quarter (25.6%) of its company shares in the Borsa İstanbul (BIST) stock market. This means that the UAE can actually buy these shares as part of its economic investment in Turkey, although ASELSAN is a national company.

The UAE’s move to negotiate defense and armament deals with Turkey came exactly two days after UAE signed a contract with France to purchase a record number of 80 Rafale fighter jets, during 2022-2024. UAE has been waiting for so long for the American F-35 fighter jets deal with the United States. However, the Biden Administration has been very hesitant in implementing this deal, especially under pressures from Israel and some members of the US Congress. This is the first time the UAE, or any other Arab Gulf country, make such a big armament deal with any arms exporter country, other than the United States.

On pragmatic terms, the UAE investment in Turkey’s defense sector is beneficial to both of them. For the UAE, it can buy advanced technology weapons from Turkey, including the Turkish benchmark drones and tanks, with a low cost of manufacturing and importation, compared to the high-cost weapons that it can procure from France or Russia. For Turkey, the UAE investments in its defense sector, does not only mean more money to be poured into the Turkish economy, but also a huge support to its goal to improve its indigenous defense industry.

However, on practical terms, defense cooperation between Turkey and the UAE remains a very sensitive issue. Despite signing historical economic cooperation agreements last month, Turkey and the UAE are still supporting and sponsoring conflicting actors in various ongoing conflicts in the Middle East, Africa, and the Mediterranean. That is clearly seen in the examples of the civil wars in Syria and Libya. Around the same time last year, the Turkish Minister of Defense Hulusi Akar, in an interview on Qatar’s Aljazeera TV, promised to punish Abu Dhabi for supporting Haftar forces in Libya against Tripoli, which Turkey supports with military troops and mercenaries, since December 2019.

In addition, the ultra-nationalist public opinion inside Turkey is still holding the negative image portrayed about the UAE in the Turkish media. This will make it difficult for Erdogan to open up to deep military cooperation with the UAE, and risk losing the votes of the huge ultra-nationalist base, in the quickly approaching presidential elections. Moreover, the UAE is already having military cooperation agreements with France, Greece, and Cyprus. All of them are counted as enemies by the Turkish state and public. It is unlikely that UAE may abandon its relationship with Greece or France to ally with Turkey. Most importantly, Turkey already enjoys a vast military presence in the Gulf region, via Qatar, and thus does not need to risk this alliance by shifting its military cooperation from Qatar to the UAE.

Therefore, we may expect that the UAE may increase its investments in procuring arms from Turkey, in the next years, especially under the increasing difficulty of purchasing weapons from the United States and Europe. However, this could hardly be seen as an indicator that Turkey is willing to take the UAE as a military ally on a level similar to its defense cooperation with Qatar or Pakistan, for example. There are a lot of bilateral and regional considerations that make the potential of actual long-term defense cooperation between Turkey and the UAE an unrealistic wish.

BY: Dalia Ziada

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BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, held its Annual General Meeting (AGM) at the company’s headquarters in the Seef District.
During the meeting, shareholders approved all items listed on the agenda, including the ratification of the minutes of the previous AGM held on 26 March 2024. The session reviewed and approved the Board’s Annual Report on the company’s activities and financial performance for the fiscal year ended 31 December 2024, and the shareholders expressed their satisfaction with the company’s operational and financial results during the reporting period.
The meeting also reviewed the Independent External Auditor’s Report on the company’s consolidated financial statements for the year ended 31 December 2024. Subsequently, the shareholders approved the audited financial statements for the fiscal year. Based on the Board’s recommendation, the shareholders approved the distribution of a cash dividend equivalent to 10% of the paid-up share capital.
Furthermore, the shareholders endorsed the allocation of a total amount of BD 172,500 as remuneration to the members of the Board for the year ended 31 December 2024, subject to prior clearance by related authorities.
The extension of the current composition of the Board was approved, which includes ten members and one CBB observer, for a further six-month term, expiring in September 2025, pending no objection from the CBB.
The meeting reviewed and approved the Corporate Governance Report for 2024, which affirmed the company’s full compliance with the corporate governance directives issued by the CBB and other applicable regulatory frameworks. The AGM absolved the Board Members of liability for any of their actions during the year ending on 31st December 2024, in accordance with the Commercial Companies Law.
In alignment with regulatory requirements, the session approved the reappointment of Ernst & Young (EY) as the company’s External Auditors for the fiscal year 2025, covering both the parent company and its subsidiaries—Sinnad and Bahrain FinTech Bay. The Board was authorised to determine the external auditors’ professional fees, subject to approval from the CBB, and the meeting concluded with a discussion of any additional issues as per Article (207) of the Commercial Companies Law.
Speaking on the company’s performance, Mr. Mohamed Al Bastaki, Chairman BENEFIT , stated: “In terms of the financial results for 2024, I am pleased to say that the year gone by has also been proved to be a success in delivering tangible results. Growth rate for 2024 was 19 per cent. Revenue for the year was BD 17 M (US$ 45.3 Million) and net profit was 2 Million ($ 5.3 Million).

Mr. Al Bastaki also announced that the Board had formally adopted a new three-year strategic roadmap to commence in 2025. The strategy encompasses a phased international expansion, optimisation of internal operations, enhanced revenue diversification, long-term sustainability initiatives, and the advancement of innovation and digital transformation initiatives across all service lines.
“I extend my sincere appreciation to the CBB for its continued support of BENEFIT and its pivotal role in fostering a stable and progressive regulatory environment for the Kingdom’s banking and financial sector—an environment that has significantly reinforced Bahrain’s standing as a leading financial hub in the region,” said Mr. Al Bastaki. “I would also like to thank our partner banks and valued customers for their trust, and our shareholders for their ongoing encouragement. The achievements of 2024 set a strong precedent, and I am confident they will serve as a foundation for yet another successful and impactful year ahead.”
Chief Executive of BENEFIT; Mr. Abdulwahed AlJanahi commented, “The year 2024 represented another pivotal chapter in BENEFIT ’s evolution. We achieved substantial progress in advancing our digital strategy across multiple sectors, while reinforcing our long-term commitment to the development of Bahrain’s financial services and payments landscape. Throughout the year, we remained firmly aligned with our objective of delivering measurable value to our shareholders, strategic partners, and customers. At the same time, we continued to play an active role in enabling Bahrain’s digital economy by introducing innovative solutions and service enhancements that directly address market needs and future opportunities.”
Mr. AlJanahi affirmed that BENEFIT has successfully developed a robust and well-integrated payment network that connects individuals and businesses across Bahrain, accelerating the adoption of emerging technologies in the banking and financial services sector and reinforcing Bahrain’s position as a growing fintech hub, and added, “Our achievements of the past year reflect a long-term vision to establish a resilient electronic payment infrastructure that supports the Kingdom’s digital economy. Key developments in 2024 included the implementation of central authentication for open banking via BENEFIT Pay”
Mr. AlJanahi concluded by thanking the Board for its strategic direction, the company’s staff for their continued dedication, and the Central Bank of Bahrain, member banks, and shareholders for their valuable partnership and confidence in the company’s long-term vision.