Turkey Tourism Recovery Hurt by Russia Invasion of Ukraine

Around 4.5 million Russian and two million Ukrainian tourists descended on Turkey last year. (AFP)
Around 4.5 million Russian and two million Ukrainian tourists descended on Turkey last year. (AFP)
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Turkey Tourism Recovery Hurt by Russia Invasion of Ukraine

Around 4.5 million Russian and two million Ukrainian tourists descended on Turkey last year. (AFP)
Around 4.5 million Russian and two million Ukrainian tourists descended on Turkey last year. (AFP)

Every Sunday Noori Sani welcomes his old friends around a bountiful Turkish breakfast in Istanbul. But surrounding him now are empty tables on his terrace at his restaurant by the Blue Mosque.

"On a day like this, we should be full," the owner of Serbethane restaurant said in the city's historic district.

Within a few days of Russia's invasion of Ukraine on February 24, Ukrainians and Russians cancelled reservations for trips, disastrous for Turkey where tourism represented 10 percent of GDP before the pandemic.

There had been high hopes for a tourism revival in 2022 and the sector was in desperate need of a boost after the Turkish lira lost significant value last year and inflation soared to over 50 percent in February.

Visitors from Ukraine and Russia made up over a quarter of all tourists who arrived in Turkey last year, usually opting for the turquoise beaches on the Mediterranean and Aegean, according to tourism ministry figures.

"Russia and Ukraine are very important markets for us," Hamit Kuk of the Association of Turkish Travel Agencies (TURSAB) said.

Around 4.5 million Russian and two million Ukrainian tourists descended on Turkey last year.

TURSAB expected seven million Russians and 2.5 million Ukrainians this year, but Kuk said it would "likely have to review these figures".

"The war between Russia and Ukraine is making everyone nervous here. Both from a human and commercial point of view," Kuk said.

"Normally, there would be a rush of summer reservations in March. But the demand has stopped," he added.

Sanctions pain

"If it goes on like this, there will be a very serious problem," warned TURSAB president Firuz Ballikaya.

"We try to wait as calmly as we can."

In front of the Hagia Sophia mosque, Russian tourists were rushing to follow their guide, ducking their heads and refusing interviews.

There were even a few Ukrainians, including a young couple from Kyiv who "arrived as tourists and became refugees" and who were now tearfully looking to leave for a third country.

"Maybe the United States?" they asked, wishing to remain anonymous.

The situation is tricky for Turkish travel agents like Ismail Yitmen because of Western sanctions against Russia.

In his office opposite the Hagia Sophia, Yitmen despaired.

"Travel agencies like mine working with Russia are really suffering right now. Taking into account the deposit amount I have paid for hotels, my loss is more than 11,000 euros ($12,000) so far," he said.

If more groups cancel, he could lose between $65,000 and 76,000.

"A group was supposed to arrive in Turkey in two months, but we couldn't receive the money, so it's cancelled. It's because they stopped SWIFT transfers. We had already paid for the hotels."

Several Russian banks were cut off from the SWIFT messaging system, which allows banks to communicate rapidly and securely over transactions.

Despite being a NATO member, Ankara did not sanction Russia and unlike many other countries, Turkey has not closed its airspace to Russian planes.

Safety fears

Before the coronavirus pandemic, the tourism sector was recovering after multiple terror attacks in 2015 and 2016 scared tourists away.

On the edge of the Middle East, the country had suffered in the few years from the impact of wars in Syria and Iraq, both on its southeastern border.

"When the war started in Iraq and then in Syria, European and American tourists stopped coming. They thought we were too near," said Hassan Duzen, sitting with his friends at the back of his deserted carpet shop.

He was convinced the same thing would happen after the invasion.

"When they look at a map, they will see the Black Sea and think we are very close," Duzen lamented. "Why would they take a risk?"

The Ukrainian couple had the same fears.

"We can't stay here, this place isn't safe, it's too close. Their missiles can hit you," the young man said, his eyes clouded with anxiety.



IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.


Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.


Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.