RIYADH, 25 December — Saudi Arabia and Turkey have started negotiations to finalize two major agreements — an investment protection agreement and an avoidance of double taxation accord — in an effort to promote commercial relations.
This new move will boost investment relations between the two countries especially in the financial sector, tourism, textile, agriculture, construction and food processing and production.
"We hope to finalize these two major agreements next year," Osman Durak, Turkish ambassador, said here yesterday.
These agreements, once concluded, will restore added confidence among private investors. A total of 74 Saudi firms have invested millions of dollars in Turkey so far even though Turkish companies have been reluctant to set up joint ventures with Saudi firms.
The new agreements will encourage these companies to set up joint ventures besides helping to boost Saudi-Turkish trade, which made an impressive leap last year after recording the lowest figure in 1999.
Durak said that Turkish exports to the Kingdom have increased by 30 percent in the first half of this year. Saudi imports of Turkish automotive parts alone grew by 106 percent during this period.
"In fact, 2000 was a year of recovery as Turkish exports to Saudi Arabia exceeded $387 million whereas imports soared up to $962 million owing mainly to the oil price recovery," he said.
Durak added that Riyadh and Ankara have also reached a matured stage in the bilateral market access agreement, which will facilitate the Kingdom’s entry to the World Trade Organization.
Asked about the commitment made by the six Gulf states to release $400 million for Turkey after the devastating earthquake of August 1999, he said that these funds were allocated on the basis of project-bound credits.
"Therefore, their actual disbursement requires, first of all, submission of the reconstruction projects by our government and then the actual realization of the projects," he said.
In response to the tragedy that claimed some 16,000 lives, the Gulf governments announced $400 million in reconstruction aid.
He noted that approximately 80 percent of the housing reconstruction projects have been completed.
On the possibility of encouraging tourism traffic between the two countries in the aftermath of Sept. 11, Ambassador Durak said Turkey attaches great importance to the Gulf countries, which have been spending about $20 billion annually on tourism.
He said that the number of visitors from the Gulf region to Turkey has decreased by 50 percent due to quake fears.
He said that although Saudis constitute 60 percent of the Gulf tourists visiting Turkey, they represent only 0.7 percent of the total number of Saudis traveling abroad each year. According to an estimate, more than 35,000 Gulf nationals travel to Turkey each year.
