Turkey-Singapore Relations: A Manifestation of Turkey’s Growing Interest in SE Asia

This essay is part of the series “Turkey Faces Asia,” which explores the development of cultural, political, and economic links between Turkey and the Asia Pacific region. See more ...

The content and scope of Turkish foreign policy has dramatically altered since the Justice and Development Party (AKP) came to power in 2002. The Asia-Pacific region, which was previously a low priority in Turkey’s foreign policy calculations, is gaining increased space within Turkey’s general strategy and long-term planning, and is seen as vital to the growth of its small to medium sized firms, upon which the wealth of Turkey’s growing middle class is based.

In this article, Turkey’s relations with Singapore will be examined in order to shed light on the growing Turkish interest in the fast-developing Southeast Asia region. As will be shown, Singapore is key to Turkish engagement with Asia. Its strategic location at the center of the region positions it as a jumping-off point for Turkish entry into the Asian market. 

Turkish-Singaporean relations stretch back to the Ottoman era. In 1864, the first Ottoman consulate was established in Singapore. The first consul general of the Ottoman Empire to be sent to Singapore—in 1901—was Ahmed Ataullah Efendi, whose appointment was vehemently opposed by the British, acting partly under Dutch pressure.[1] Diplomatic relations between Singapore and Turkey were formally established in 1969, and the Turkish embassy in Singapore opened in 1985. The decision of the Singaporean government to set up an embassy in Ankara in 2012 has further invigorated bilateral relations, and the relationship between the two countries since then has continued to strengthen and develop. 

Mutual visits by state officials and representatives of the private sector reflect the close relationship between the two nations. In 2012, several Turkish ministers visited Singapore, among them Economy Minister Zafer Caglayan, Finance Minister Mehmet Simsek, Deputy Prime Minister for Economy Ali Babacan, Customs and Trade Minister Hayati Yazici, and Health Minister Recep Akdag.[2] These visits demonstrated the commitment of the Turkish administration to cement economic and financial relations with Singapore. In July of 2013, Turkey’s Foreign Minister Ahmet Davutoglu visited Singapore as part of his participation in the twentieth ministerial meeting of the Association of Southeast Asian Nations (ASEAN) Regional Forum, which was hosted by Singapore’s neighbor, Brunei. This was the second visit by a Turkish foreign minister to Singapore in the republic’s history, the first having been made by Vahit Halefoglu in 1987. Turkish Prime Minister Recep Tayyip Erdogan is expected to visit Singapore early next year.

Economic factors are fundamental to Turkey’s foreign policy under the AKP. Turkish political scientist Kemal Kirisci refers to this development as the “rise of the trading state” in Turkey’s political landscape.[3] It is important to view Turkey’s increasing engagement with Singapore and the wider region through the lens of Turkey’s Asia-Pacific Commercial and Economic Relations Development Strategy of 2005, which was a reaction to the growing shift in economic power from West to East and aimed to enhance Turkey’s trade and investment relations with Asia’s emerging economies. Turkey has a large, youthful population and a vibrant economy that aspires to rank among the world’s top ten economies by 2023—the hundredth anniversary of the founding of the Turkish Republic. Turkish economic interest groups are increasingly vocal and able to influence the government’s foreign policy, while the private sector is lively and entrepreneurial. These factors mean that Turkey must widen its scope and cooperate economically with as many countries as possible, improving relations with its neighbors and previously overlooked countries such as those in Asia and Africa.

Singapore is the second largest buyer of Turkish exports in the Asia-Pacific region, after China. Singapore, having previously been an outpost of the British Empire, has grown to become one of the most prosperous places in the world, with stunning skyscrapers and a bustling port. Singapore’s position as a thriving business hub makes it an excellent entry point to the region. At the heart of Southeast Asia, it is well placed for commercial expansion into the emerging markets of that region, which has a population approaching 600 million and a combined GDP of $1.9 trillion. The Turkish government recognizes this immense potential and is looking to expand its presence in the region.

Singapore and Turkey are both important hubs, albeit in different regions. Both are strategically located at the crossroads of trading activity. Turkey forms a gateway to European, Middle Eastern, and Central Asian markets, while Singapore is a key entry point to Asia. These similarities present interesting opportunities for collaboration between the nations’ business communities. For Turkey, this collaboration, coupled with Singapore’s location, offers a chance to tap opportunities in the fast-growing markets of Asia. The OECD (Organization for Economic Cooperation and Development) estimates that 3.2 billion Asian people will move into the middle class by 2030 and that this group will account for almost 60 percent of total global consumption.[4] Asian markets are diverse, comprising various cultures, customs, and legal/business traditions. S. Iswaran, Minister in the Singaporean Prime Minister’s office, said at the Turkish-Business and Investment Forum in July 2012 that Singapore can act as a guide for Turkish businesses that need a comprehensive and nuanced understanding of such a diverse region, which will in turn help the businesses develop and implement a pan-Asian strategy.[5]

Between 2010 and 2011, trade between Turkey and Singapore increased from $960 million to $1.76 billion, hitting a new high in economic relations. However, there was a sharp drop in 2012, to $666 million.[6] Despite much economic and trade collaboration in the previous year, trade value in the first half of 2013 was at $392 million, a decline of $9 million compared with the same period in 2012.[7] This suggests that further work is needed to put economic relations between the two countries on a firmer footing. Discussions concerning a bilateral free trade agreement may achieve this.[8] There are already commercial ties between the two countries, including the Singapore-Turkey Air Transport Agreement, the Singapore-Turkey Investment Promotion and Protection Agreement, the Turkey-Singapore Investment Avoidance and Double Taxation Agreement, and the memorandum of understanding between the Singapore Exchange (SGX) and the Borsa Istanbul.

More than 50 Turkish companies are registered in Singapore, among them Opet Trade Pte Ltd. Opet has had a Singaporean presence since 2008 and has invested in order to expand its trade activities and find investment opportunities in Southeast Asia. Opet is concerned with marine fuel trading, and is looking to extend its activities to distillates while expanding its fuel oil volumes in Asia’s expanding markets. With 1,300 service stations in Turkey and a 20 percent share of the Turkish market, Opet is part of Koc Holding, Turkey’s largest conglomerate. Koc has a range of interests, including energy, the automotive industry, durable goods, and the banking and food industries. It may behoove other Turkish companies to take advantage of the benefits of Singapore’s business environment. According to the World Bank’s “Doing Business” report of 2013, Singapore ranks first globally for the ease of doing business (for the seventh consecutive year).[9] The Economist Intelligence Unit research report, “Hot Spots 2025: Benchmarking the Future Competitiveness of Cities,” commissioned by Citigroup, ranked Singapore as Asia’s most competitive city in 2025 (third in the world after New York and London).[10]

In recent decades, Turkey has raised its ambitions above that of being a bridge between Europe and Asia, and is now looking to become a business and investment hub. Turkish Deputy Prime Minister Ali Babacan stated that his country is looking to establish cooperative relationships with Hong Kong and Singapore as part of Turkey’s bid to transform Istanbul into a global financial center. “Both Hong Kong and Singapore are the gates to Asia in terms of trade and finance, and a major portion of global growth is coming from Asia now. With Istanbul being the gate to Turkey’s region, bringing these gates closer to each other is in the interest of all sides,” Babacan told journalists during his visit to Singapore.[11]

Turkey’s adoption of one of the most liberal investment regimes in the OECD illustrates its recognition of the importance of foreign investment for its economic development and prosperity. There is great economic potential for Singaporean companies in the new Turkish investment environment; the OECD believes that by 2017, Turkey will be the third fastest-growing country after China and India. Singapore’s business community has targeted Turkey since 2004 as part of an outreach program that aims to extend Singaporean economic cooperation beyond the boundaries of the immediate region. The fast-developing Indian and Chinese economies have led Singapore to feel squeezed and to look outside the region in order to regain equilibrium.[12] This is one reason why trade and investment between Singapore and Turkey, in a variety of industries, is important to the Singaporean authorities, and why they are open to signing a free trade agreement.

Successful Singaporean investment in Turkey includes the operation of Mersin International Port by the Port of Singapore Authority in collaboration with its Turkish partner, Akfen. Another example is Jurong Consultants, whose industry is petroleum chemicals. In terms of successful investment, Temasek Holdings, which is the investment arm of Singapore’s government, has bought a stake in Turkiye Halk Bankasi, which is Turkey’s second largest bank. Singapore brokerage group PhillipCapital acquired a Turkish securities and futures brokerage firm in March 2012, and the trade agency IE Singapore has opened an overseas center in Istanbul. Singaporean foreign direct investment in Turkey was approximately $170 billion between 2002 and 2012, and it is steadily increasing.[13]

Turkey and Singapore also share many similar views on regional and international issues and have cooperated on several occasions. In 2009, both committed forces to join Combined Task Force 151 to execute counter-piracy operations in the Gulf of Aden. Turkey and Singapore also cooperated in the stabilization and reconstruction of Afghanistan, and have expressed similar views with regard to global governance reforms. Singapore can help Turkey to gain access to Asian regional organizations and thereby benefit from the increasing importance of the Asia-Pacific region in world trade. Turkey, for instance, wishes to become a dialogue partner with ASEAN. In July of 2010, Turkey became a party to ASEAN’s Treaty of Amity and Cooperation, which was a step forward in extending its diplomatic reach into Southeast Asia. The inauguration of several embassies in recent years in Southeast Asia is further proof of Turkey’s growing presence in the region.

The increasing economic, commercial, and political ties between Turkey and Singapore have had benefits on other levels. Tourism between the two countries has increased, driven largely by improved transport links and greater promotion. In 2011, over 20,000 Singaporean tourists visited Turkey, and more than 15,000 Turkish tourists visited Singapore. Cultural interactions have also risen. Around 500 Turkish citizens now live in Singapore. Tourism and cultural exchanges allow people of both nations to establish contact and develop understanding and awareness. Now that Singapore Airlines offers a direct route to Istanbul and Turkish Airlines has daily flights to Singapore, it will be even easier for trade, investment, and people to move between the two countries. In the education sector relations are also developing quickly. Singapore’s Nanyang Technological University has, for instance, collaborated with four top universities in Turkey (Istanbul Technical University, Middle East Technical University, Istanbul University, and Yildiz Technical University) as a means to increase academic exchange and research cooperation.

Turkey and Singapore are still in the early stages of their relationship, and they both stand to benefit from increased cooperation in various sectors. Singapore has in recent years been looking for new business opportunities in non-traditional markets such as Turkey. Turkey’s favorable investment environment, together with the country’s geostrategic location, has prompted many Singaporean companies to become actively involved in the Turkish market. As for Turkey, establishing links with Asia’s huge emerging economies is an important part of the country’s hope of becoming one of the world’s top ten economies by 2023. Indeed, Turkey’s performance in Asia will give a good indication of whether it will be able to achieve this “global player” position, especially as it deals with political problems at home and crises amongst its neighbors that may hinder its ability to devote time and resources to the Asia-Pacific region. Unquestionably, Turkey’s foreign policy choices will determine its own destiny in the international system—whether it will be one of success or failure.

This contribution is part of the Middle East-Asia Project at the Middle East Institute.