The Singaporean government’s deliberate and determined policy to work closely with Turkey on a number of issues ranging from trade to investment and from politics to culture is based on long and careful consideration at the senior policy makers’ level. This represents a breakthrough shift in the conventional thinking of the government establishment, which has been mostly focused on Southeast Asian markets as well as the EU and the US for the survival of this small but highly developed city-state. The Singaporean government decided to diversify and pursue relations outside its traditional partners like many others have, not only for business and investment, but in politics and culture as well.
“Turkey represents the culture of the future in the broadest sense of the word,” said Singapore Finance Minister and Deputy Prime Minister Tharman Shanmugaratnam during an interview I had with him on Friday. I think his description of Turkey as an emerging economy and a forward-thinking Muslim nation, not quite the same as other Muslim-majority countries and one that is doing very well, highlighted one of the many reasons why Singapore has been making overtures to Turkey in recent years. That triggered a reciprocal interest from Turkey.
There are other reasons, of course. The fact that Turkey is a key member of the G-20 group of advanced and developing economies in contributing and shaping policy tools on fiscal and monetary measures while mobilizing members to rein in tax safe havens and unscrupulous reporting by auditing agencies makes Turkey a valued partner for Singapore. Since Turkey will be assuming the chairmanship of the G-20 in 2015, Singapore wants to work closely with Turkey in creating measures to address long term financing problems in order to attract private and sovereign capital funds once the normalization of monetary and fiscal policies resumes.
In comparison to Turkey, Singapore has a small economy and its companies are not that big. But Singaporean companies are very competitive in their sectors, which have been largely driven by high technology and innovation. Turkish companies can certainly benefit a lot from this experience while cutting down on labor costs and increasing productivity. Shanmugaratnam strongly believes that Turkish firms, experienced in major infrastructure and large-scale urban development projects, can easily advance in third country markets with the well-known branding of Singaporean companies and their technologies. This is a win-win case for both parties, and there is substantial complementarity rather than competition.
Singapore understands that it needs to search for new markets for growth opportunities amid uncertainty in the world economic outlook. This has become a sustainability issue for Singapore, given that a widening income gap among Singaporeans has become a real concern for policy makers. Turkey, with a large, booming market and a relatively young population, represents one of the outlets that Singaporean investors can tap into for long-term sustained yields. As Singapore can be a gateway for Turkish companies in the East Asian market, Turkey can also be a springboard for Singaporean companies to enter Turkey’s neighboring markets.
On a global level, Turkey and Singapore both have a vested interest in keeping trade liberalized and markets as open as possible, preferably in the framework of the World Trade Organization (WTO) as a multilateral trading platform. If the WTO deal falls apart, which seems to be the case at the moment, Turkey and Singapore will have to join another group of countries in their effort to secure regional and bilateral free trade agreements (FTA). Both nations are highly dependent on export markets and they want to compete on a level playing field while removing obstructions to trade and investment.
Protectionism woes will hurt both countries deeply. That is why talks on the free trade agreement between Turkey and Singapore are still ongoing; once it is completed, it will deliver a significant message to countries in the neighborhoods of both Turkey and Singapore that they really do mean business. Hopefully the FTA deal will cover goods, services and investments with high liberalization benchmarks in each sector, catalyzing the companies to benefit from the framework as much as possible.
My main worry as far as the future outlook of Singaporean and Turkish cooperation is that we may overlook the importance of small and medium-sized enterprises (SMEs) in anchoring the relationship to a diversified and deeply penetrated market level. Turkey made this mistake with the US when both sides weighed in with just the big boys, leaving the SMEs out in the cold. Now, despite the renewed commitment at the political level, both sides are struggling to bring SMEs into the mix. We should not make the same mistake with Singapore, which is a success story for SMEs.
Unfortunately, this emphasis on small and medium-sized enterprises is currently what we are missing in the Turkey-Singapore link. I believe this is what Shanmugaratnam alluded to when he mentioned that he very much wanted to see fine Turkish cuisine and a top-notch Turkish restaurant chain in Singapore, after dining at a superb restaurant in İstanbul with his counterpart, Deputy Prime Minister Ali Babacan. We already have the success stories of big Turkish and Singaporean companies operating in each country, but we lack leading stories of SMEs, which are often ignored by governments in the drive to attract large companies.
SMEs would actually increase their production capacity in both countries if they were helped by their respective governments with technology transfers, incentives and branding promotion. The Singapore Turkey Business Association (STBA) based in Singapore may be good partner to push this SME issue since they have already organized numerous trips between the two countries in that regard.
In a way, I had a chance to test and also taste a little bit of what Shanmugaratnam wished to see in Singapore during my visit there. Following the interview, I dropped by Aquamarine, a restaurant at the Marina Mandarin Singapore where fine Turkish cuisine was served as part of a month-long Turkish food promotion campaign sponsored by the Turkish Cultural Center of Singapore. I was told that the Singaporeans had shown great interest in the food. When I visited the cultural center in the afternoon, I was surprised to see a cooking class attended by Singaporean ladies there. They were being taught by a Turkish chef how to cook Ali Nazik kebab, which is a difficult yet very tasty Turkish regional specialty made from eggplant, yoghurt and minced meat. This is something we can certainly expand on.
Let’s all remember that one of the key factors in turning Turkey into a major emerging economy today has been the breathtaking success story of SMEs across Turkey in the last decade or so. Some of them have already graduated to the major leagues of corporations thanks to export opportunities and have helped fuel the growth in Turkey. They are the ones who contributed to narrowing income disparity while generating the most jobs in Turkey. The Turkish Confederation of Businessmen and Industrialists (TUSKON), the largest trade advocacy group in Turkey, is a key organization in representing the interests of SMEs as well as large companies. It should be brought into developing vigorous business links between Turkey and Singapore.