President Recep Tayyip Erdoğan is scheduled to arrive in Cairo this week, accompanied by half of his cabinet. The visit follows a rare retreat in Alexandria of representatives from 365 chambers of commerce across Turkey — a gathering that takes place only every few years. They will now join the president in Cairo for a bilateral business summit held alongside the state visit.
The symbolism matters. But more significant is the structural shift underlying it: Turkey and Egypt are arguably more aligned politically and economically today than at any point in modern history. That alignment is increasingly reinforced not only by diplomacy but also by investment flows.
Since the 1980s, Turkey has pursued an open economic model, marked by volatility but also by sustained industrial deepening. Over time, the country has built one of the world’s most dynamic medium-technology manufacturing bases, spanning automotive components, consumer durables, textiles and construction materials. Manufacturing still accounts for roughly one-fifth of total employment — an unusually high share for an economy with per-capita income approaching $18,000 in 2025.
Yet manufacturing competition today is global. A Turkish producer’s marginal competitor may be located just as easily in China, Vietnam or Costa Rica. As income levels rise, sustaining competitiveness in labour-intensive and mid-tech industries becomes more challenging. It is therefore unsurprising that Turkish corporates are increasingly exploring outward investment as part of their long-term competitiveness strategies.
Egypt has emerged as the primary destination for these investments. Cairo is little more than a 90-minute flight from Istanbul — in practical terms, closer than many parts of Turkey itself. Labour costs competitive, while energy costs are about half. Egypt also offers access to a large domestic market and a broader network of free trade agreements than Turkey. Compared with alternative locations such as Uzbekistan, Morocco or Bangladesh, Egypt’s combination of proximity, cost structure and market access is distinctive. Around 200 manufacturing facilities operated by Turkish companies are already active in the country.
The geographical reconfiguration of manufacturing capacity is neither new nor abnormal. It was central to East Asia’s development trajectory. Japanese firms in the 1970s and 1980s, followed by Korean companies in subsequent decades, invested heavily across ASEAN and China. Host countries initially gained employment and later absorbed technology; investor countries preserved corporate competitiveness and industrial capabilities. A similar regional dynamic is now beginning to take shape in the Eastern Mediterranean.
Interest in Egypt is not limited to Turkish firms. Following the 2023 economic stabilisation programme, investor appetite has expanded across a wide range of countries and sectors. This momentum increases the importance of sequencing — aligning investment promotion with the availability of serviced industrial land, coherent cluster strategies and appropriate financing mechanisms. In industries such as automotive components, proximity to complementary suppliers is often decisive. In others, such as textiles, the scale of relocation requires tailored financial solutions.
For Turkish manufacturers, geography also matters beyond Istanbul. Many potential investors are based in Anatolian industrial centres such as Denizli, Kayseri or Kahramanmaraş, where awareness of Egypt’s investment framework and facilitation channels remains uneven. More decentralised and targeted promotion efforts would help translate interest into execution.
Turkey, for its part, also faces a strategic policy choice. Countries such as South Korea actively supported outward manufacturing investment during their own industrial transitions, notably through dedicated financing tools in the 1980s. Preserving industrial competitiveness often requires accepting geographical reconfiguration. Firms that fail to adapt risk losing organisational capacity, skills, and export relationships altogether.
For both countries, the question is not whether production geographies will shift, but whether policy frameworks can evolve fast enough to shape that shift. If Egypt and Turkey align investment facilitation, financing tools, and industrial clustering strategies, today’s bilateral flows could mature into a durable regional production platform. In a decade’s time, perhaps the more telling measure of success will not be how much capital moved between Cairo and Istanbul, but whether the two economies learned to invest outward in African countries together.
The writers are public policy experts.
* A version of this article appears in print in the 5 February, 2026 edition of Al-Ahram Weekly
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