Turkey, Brunei offer promising partnership

The Turkish prime minister’s unannounced trip to Brunei last week was not scheduled in advance and in turn completely unexpected. Everything developed right on the spot when Recep Tayyip Erdoğan met Brunei’s Sultan Hassanal Bolkiah Mu’izzaddin Waddaulah at the 5th Bali Democracy Forum in Indonesia. When Bolkiah renewed an invitation for a visit to his country at the opening of the forum, Erdoğan made the decision to take a trip to the wealthy Asian sultanate while in the region, prompting his protocol officers to hastily arrange for a one-day working visit.

Although the trip was not on Erdoğan’s itinerary, Turkey’s action plan to boost ties with Brunei has been well under way for some time now since Bolkiah’s four-day visit to Turkey back in April. It was the first time a sultan of Brunei has visited Turkey since the country gained its independence from the British in 1984. Turkey’s focus on Brunei is part of a grand strategy that was launched by Erdoğan’s Justice and Development Party (AK Party) government in 2005 to boost trade, economic and political relations with Asian and Pacific countries.

The agreement on trade and economic and technical cooperation signed on April 10 during Bolkiah’s visit to Turkey is significant in that it lays out the framework to drive relations further. As per the agreement, both countries have agreed to give each other the “most favored nation” (MFN) status while establishing a joint economic commission to be chaired by ministers of both countries. Though the agreement has a term limit of five years, it will be renewed automatically for another year unless one party withdraws from the agreement. The agreement was approved by the parliamentary Foreign Relations Commission in October and forwarded to Parliament for approval, which is likely.

The trade volume between the two countries is almost nothing, with some $7 million worth of trade in 2011, and for the first nine months of 2012 has amounted to a little over half a million dollars. But there has been a significant amount of investment coming from Brunei to Turkey in recent years, mostly through the sukuk (international Islamic bonds) market. As Asia comes right after the Middle East in surplus funds for sukuk, Turkey has been trying to tap into these vast financial resources. It is estimated that some 12 percent of Turkey’s recent $1.5 billion sovereign sukuk was purchased by Asian investors when it was issued by the Turkish Treasury, in association with Citigroup, HSBC and the Kuwait Finance House.

Bank Islam Brunei Darussalam Berhad (BIBD), the largest Islamic bank in Brunei, has been active in the Turkish financial market for some time. The bank expects to invest in some 10 to 20 percent of the sukuk products in Turkey while planning to capitalize on market opportunities in the Turkish energy, health, real estate, finance and leasing sectors. The bank already extended $500 million in murabaha loans to Turkish Islamic participation banks last year and is expected to invest another $500 million this year.

The Association for Social and Economic Solidarity with Pacific Countries (PASİAD), a leading Turkish advocacy group working for the promotion of ties with Asian and Pacific countries, has been lobbying to develop ties between Turkey and Brunei. It hosted Pehin Abu Bakar Apong, minister of education and chairman of the board of directors at the Brunei Investment Agency in January 2012. The association convinced the Turkish Confederation of Businessmen and Industrialists (TUSKON), the largest business interest group in Turkey, to organize a three-day business trip to Brunei for Turkish businessmen in May to test the waters for business potential. It worked very well. The fact that contracts worth $2.5 billion were signed between Turkish and Brunei businesses for the construction of luxury residential buildings in Brunei during this trip indicates that there are many opportunities to tap into on the bilateral relations front.

Turkish investors, contractors and construction industry representatives can certainly capitalize on a long-term plan called Brunei Darussalam’s National Vision, also called Wawasan Brunei 2035, which entails the development of a sustainable economy by investing in Brunei’s infrastructure, especially in education, health and housing. There is no doubt that the opportunities for cooperation in these areas were discussed during the Turkish prime minister’s visit to Brunei. I think TUSKON, a success story in turning Turkish small and medium-sized enterprises (SMEs) into national and global players, can be a good partner in helping to realize Brunei’s SME development goals as part of Wawasan Brunei 2035.

There are also plans between the two countries to realign policies with regard to the halal food industry. A few years back, Brunei launched its national halal branding scheme called Brunei Halal to allow manufacturers worldwide to cater to consumers’ needs by helping to establish standards in halal certification, a move that many saw as the first significant attempt to tap into the international Muslim consumer market. As Turkey is in the process of developing its own national branding and standards on halal food, Erdoğan discussed this issue with the sultan. With the agreement to waive current visa requirements and the opening of embassies in the two countries’ capitals soon, we will likely see more intense networking between Turkish and Brunei businesses in the future.

This oil and gas-rich island with a population of roughly 400,000 may be a small market in itself, but it offers huge opportunities for Turkey to tap into Brunei’s vast neighborhood in Southeast Asia. Brunei will assume the rotating presidency of the 10-country Association of Southeast Asian Nations (ASEAN), an economic, political and cultural organization that is home to a huge economy with $1.6 trillion in trade volume, comparable in size to China and Japan, bigger than India. As Turkey is trying to develop its own relations with ASEAN following a deal on accession to the organization’s Treaty of Amity and Cooperation in Southeast Asia in July 2010, Brunei’s chairmanship may make a positive difference in fast-tracking Turkey’s membership aspirations to become a Dialogue Partner of ASEAN, a kind of channel mechanism for ASEAN as a group to forge and develop strong cooperative relationships with major political and trading powers.

To further illustrate how this tiny but wealthy country can make a difference for Turkey, I have to point out the fact that Brunei is supporting the isolated Turkish-Muslim community on the Mediterranean island of Cyprus. Despite the negative campaigning of the Greek Cypriot government, senior Brunei finance officials did not shy away from participating in the 34th annual meeting of the 120-member Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) held in the Turkish Republic of Northern Cyprus (KKTC) in April 2011, a country which so far has only been recognized by Turkey. The event was organized with the help of Bank Asya, Turkey’s leading participation bank, in cooperation with the Turkish Foreign Ministry and the Development Bank of the KKTC.

On the political level, when you look at the voting records of both Turkey and Brunei at the United Nations as well as at the Organization of Islamic Cooperation (OIC), there is quite an overlap on the positions taken by both countries on various issues. Brunei soldiers are serving today along with Turkish soldiers in the United Nations Interim Force in Lebanon (UNIFIL) as part of a peacekeeping operation. As Brunei tries to enhance its capabilities in peacekeeping, it can collaborate with Turkey in defense-related projects, especially in maritime security.

There are also striking similarities between the countries’ approaches to religious diversity in general and moderate Islam in particular. Muslims in both countries overwhelmingly subscribe to moderate Islamic values, and their governments actively support this long-held view among their own populations. There are no worrying indications in either country that can be traced back to extremist religious movements. But the radical movements happening in the Middle East, Southeast Asia and Central Asia are of great concern to both countries, which may be another area in which Turkey and Brunei can collectively work together.

For all this potential to be realized, we need to jointly invest in the people of both countries through student and scholarly exchanges to sustain constructive ties for the future while linking Turkish and Brunei media professionals to raise awareness of the other within their respective countries.

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