A $50bn package of soft investment pledges from the UAE was secured by Turkish President Recep Tayyip Erdogan on July 19 at the conclusion of his three-nation Gulf tour.

Turkey is in something of a race against time to obtain major financial inflows in the battle against an economic crisis that some observers fear could be on the point of degenerating into a systemic crisis if there are any more missteps from the Erdogan administration.      

Reacting to the announcement of the UAE package, Timothy Ash at BlueBay Asset Management said in a note: “It beats expectations which had been set by comments by the Turkish trade minister suggesting numbers in the order of $30bn.

“There will be some scepticism that these are soft investment pledges and much of this money won’t come or be constrained by deal availability.

“However, the $8.5bn for earthquake bonds and $3bn for export credits announced should be made readily available.

“This is a real triumph for Erdogan and his team and, if combined with similar commitments from other Gulf states—Saudi Arabia, Qatar and Kuwait—it could cushion the impact of the ongoing and much needed policy adjustment we are seeing now with the [finance minister Mehmet] Simsek team. It buys them some time.”

In the past two years, with the Turkish economy sliding into in increasingly dire straits, Erdogan has worked hard to repair relations with Saudi Arabia and its Gulf allies, almost certainly because he’s aware the clock is ticking down on the urgent need for financial ballast.

As Erdogan prepared to head home at the end of his tour, which also took in Saudi Arabia and Qatar, the UAE’s state news agency said the oil-rich Gulf state and Turkey struck a series of provisional agreements that included the establishment of a joint economic and trade commission, commitments to develop energy and natural resources projects and an extradition pact.

ADQ, one of Abu Dhabi’s state investment funds, said that it would provide up to $8.5bn through bonds to back reconstruction efforts in the wake of Turkey’s double-earthquake disaster in February. The fund added that it would deliver $3bn in export credit financing to Turkish companies to build bilateral trade.

Bankers told the Financial Times that Erdogan took with him on his tour a list of assets in which Turkey is seeking to sell stakes as the government looks to raise foreign currency to replenish severely depleted reserves and manage a gaping current account deficit.

Prior to his UAE visit, Erdogan held talks with Saudi Crown Prince Mohammed bin Salman. Riyadh and Ankara subsequently announced an agreement for Saudi Arabia to buy Turkish attack drones under a contract, including technology transfer, that was described as Turkey’s largest ever defence export deal.