SEOUL — Korea is a common household name in Turkey because of the 1950-1953 Korean War. Indeed, many veterans still remain from that period.
But no additional noteworthy links have been established between the two countries in the 60 years following the war in either the sphere of business, culture or politics. This only started to change in the last decade as Turkey began to acknowledge South Korea’s economic accomplishments by taking an interest in benefiting from the best practices in this country.
South Korea also recently realized that there is much potential in Turkey’s booming consumer market as well as that the country offer a gateway to the European market through its customs union agreement. A total of 166 Korean companies, including LG and Hyundai, currently operate in Turkey. Hyundai is one of the best success stories of the Turkish market and has joined the ranks of best selling car manufacturers. As of July 2010, Hyundai came in third, after Renault and Ford, in terms of the distribution of registered cars on Turkish roads.
Albeit a bit late, both countries have begun to talk about a free trade agreement, with a view to conclude talks by the end of the year. The trade volume between Turkey and South Korea was almost $1 billion in 2000, favoring the latter immensely. According to the Turkish Statistics Institute (TurkStat), last year’s annual trade volume stood at $3.4 billion, which was down due to the global financial crisis. It peaked in 2008, when the trade volume was recorded as $4.4 billion.
Trade volume showed signs of recovery in 2010. In the first eight months of 2010, Turkey’s imports from South Korea jumped 46 percent year-on-year from $2 billion to $2.8 billion. Turkey’s exports rose 52 percent in the same period, from $125 million to $188 million.
Though both countries targeted $10 billion in trade volume in the short term, the huge imbalance favoring this East Asian country became a real concern for Turkish officials. Zafer Çağlayan, Turkey’s foreign trade minister, said at one point that “we need to map out how these figures can be balanced and in which sectors.”
The two countries also signed a deal worth as much as $20 billion to construct up to four light water reactors in a nuclear power plant in the Black Sea province of Sinop as part of the government’s energy diversification policy. Turkey’s Enka Construction and the Korea Electric Power Corp (Kepco) will submit a joint bid to build the 5,600-megawatt plant. Kepco signed a $40 billion nuclear technology export deal last year with the United Arab Emirates. South Korea is the world’s No. 6 nuclear power holder in terms of current generating capacity.
Cooperation between the two countries is no longer limited to them only. Now that both Turkey and South Korea are members of the prestigious G-20, the world’s largest economies by gross domestic product (GDP), they are working closely on shaping the economic order the world needs after the economic crisis disturbed the balance of the financial and economic structure.
How to reform the governance of the International Monetary Fund (IMF) will dominate discussions at the next G-20 meeting, which will be hosted by Seoul next month. Both countries deserve a seat on the IMF board. After all, their economies have surpassed those of the Netherlands and Belgium, both of which have IMF board members. Even Dominique Strauss-Kahn, IMF managing director, acknowledged the need for change and said in Washington, “I think it’s fair enough to make more room for emerging countries at the board.”
On the diplomatic front, we also see some activity going on as part of the Conference on Interaction and Confidence-building Measures in Asia (CICA). With Turkey currently holding the CICA chair, there may be areas in which both countries could interact more closely.
When Turkish President Abdullah Gül visited South Korea in June, he expressed his support for Seoul in its push for United Nations action against Pyongyang after a North Korean torpedo sank a South Korean naval ship, killing 46 sailors on board. He said the action was deplorable, and offered his condolences. Turkey is a non-permanent member of the UN Security Council and also chairs the council’s committee on sanctions against North Korea.
We were in Seoul last week to celebrate the 60th anniversary of the recapture of Seoul from the Northern. Turkish veterans were the main attraction here, receiving strong applause from Koreans for their bravery and sacrifice. This special relationship should be strengthened with much better cooperation and coordination in business, politics and culture. Better late than never.