Turkey’s ailing economy, hit by the COVID-19 pandemic atop severe currency woes since 2018, is now facing economic reprisals by Arab countries incensed with Ankara’s policies in the Middle East. Saudi Arabia has already started an undeclared boycott of Turkish goods, according to Turkish exporters, amid rising Arab calls for economic retaliation against Turkey.

Egypt has been at the forefront of efforts to create a united Arab stance against Turkey, most recently at the Sept. 9 meeting of the Arab League. Whether Arab nations can mount an efficient joint action against Turkey is a question on its own, but the Turkish economy today is too vulnerable to dismiss or absorb large-scale reprisals.

Turkey’s economic ties with Arab nations have grown in the past two decades, both in terms of trade and inflows of investment and tourism. Arab nations, however, remain far from being Turkey’s top economic partners. Retaliatory actions would have had a limited impact on the Turkish economy in normal times, but an efficient Arab boycott coming on top of Turkey’s existing economic woes could well prove hurtful. Amid the dramatic slump of the Turkish lira and an exodus of foreign investors, the Turkish economy can ill afford any fresh losses in hard-currency earnings, foreign capital flows and reputation and therefore a further increase in its risk premium. 

In their Sept. 9 statement, Arab League foreign ministers denounced Turkey’s “interference in Arab affairs,” including its military actions in Syria, Libya and Iraq, and urged Ankara to “stop provocations that could erode building trust and threaten the region’s security and stability.” Egyptian Foreign Minister Sameh Shoukry called for Arab unity to deter Turkey’s actions, which he described as the most significant emerging threat to Arab national security. Libya, Qatar, Somalia and Djibouti conveyed reservations about the joint statement, which also welcomed the formation of a committee to monitor and address such Turkish interference. Ankara dismissed the accusations, saying that the decisions made at the meeting “lack any context to be taken seriously.”