Turkey focuses on its backyard

Paul Doany recalls that before his boss, the billionaire and former Lebanese prime minister Rafiq Hariri, was assassinated in 2005, he had recommended his companies invest in Turkey, which he had spotted as a future success story.

That year, Oger Telecom, a Hariri company, paid $6.6bn for a majority stake in Turk Telekom. Two years later, BankMed, another company in which the Hariri family was the big shareholder, teamed with Jordan’s Arab Bank to acquire a 91 per cent stake in Turkey’s MNG Bank. “As a market for Middle East investors, Turkey started to be taken seriously in 2005,” says Mr Doany, chief executive of Turk Telecom. And for good reason. After the spectacular crash of 2001, economic growth rates were high, runaway inflation had been tamed and, more important for Arab investors sensitive to currency exchange risks, the lira had stabilised.

As Turkey has expanded its influence in the Middle East , with an energetic foreign policy that has rattled western allies and surprised traditional heavyweights in the region, policymakers and analysts have been probing with growing curiosity the perceived shift to the east.