Turkey begins foray into Southeast Asia through Vietnam
During his visit to Hanoi last week, Turkish Prime Minister Binali Yıldırım called Vietnam “a very beautiful country entrusted by Uncle Ho to younger generations” and praised his hosts for their economic and social development.
Yıldırım became the first Turkish prime minister to visit Vietnam, and while his words contained a certain dose of diplomatic courtesy, he meant business when he said that Turkey wanted to improve relations with Vietnam, “whom we consider an important strategic and commercial partner”.
Although it would be premature to talk about a real partnership of substance between Turkey and Vietnam, intensifying dialogue between these two countries, which, in Yıldırım’s words, “are able to make a synthesis between the East and the West”, points to increasing prospects of concrete collaboration in the near future.
Only one month before Yıldırım’s visit, a Turkish minister was in Hanoi with a team of bureaucrats and technocrats for meetings of an intergovernmental economic commission setting the roadmap for the development of economic relations in the short to medium term.
Between the two visits, Turkey was officially accepted by the Association of Southeast Asian Nations (ASEAN) as a sectoral dialogue partner, and next in turn is a visit by the Vietnamese prime minister to Turkey.
From the shores of the Bosphorus one can ask: But why Vietnam? Why now?
There are two reasons behind Turkey’s fast-growing interest in Vietnam. First of all, Turkey’s economy, facing an acute current-account deficit and having troubles in nearby export markets due to civil wars, terror and instability, needs urgent revitalization by making new inroads into the global economy, and particularly into its better-performing parts such as East Asia.
Economist Hatice Karahan, who is chief economic adviser to President Recep Tayyip Erdoğan, recently wrote that Vietnam was regarded like “China 20 years ago”, and this depiction fully reflects how Vietnam is seen by the Turkish business community, which wants to avoid repeating the mistakes made in China and enter the Vietnamese market before the competition gets too fierce.
This is the reason the three agreements signed during Yıldırım’s visit were all aimed at facilitating the business environment at the bilateral level. The agreement for Cooperation in Free Zones, Export Processing Zones and Special Economic Zones was especially important for the Turks, who prioritize entering Vietnam as investors.
A report by Turkey’s Foreign Economic Relations Board published right before Yıldırım’s visit points to Vietnam’s experience with industrial zones, some of which have been established with Japanese support, and makes a case for establishing a Turkish industrial zone in the country, listing textile, apparel and electronics as possible areas of investment.
In the meantime, the same report draws attention to the US$500 billion worth of physical infrastructure needed by Vietnam between now and 2020, and asserts that Turkey’s internationally experienced construction companies, on their own or preferably in partnership with companies from China, Japan and South Korea, could undertake major projects such as highways, seaports, airports and railways.
The other two agreements, one on customs cooperation and the other about harmonization of standards, are also expected to help to establish a more favorable business environment between the two countries.
Turkey needs to broaden its economic horizons. Vietnam is becoming one of the rising stars of global business, attractive thanks to its low-cost and highly skillful labor force and geographic position, and the Turks want to have their share in the market. This, however, will not be easy in practice.
A good way to kickstart a business partnership is to cater for each other’s priorities. Vietnam wants Turkey to recognize it as a market economy and minimize protectionist measures against Vietnam’s exports, while for Turkey launching negotiations on a bilateral free-trade agreement tops the agenda.
The other dynamic behind Turkey’s interest in Vietnam relates to ASEAN. Since signing ASEAN’s Treaty of Amity and Cooperation in 2010, Turkey is seeking ways to be more active in this grouping. While it is impossible to become a full member for geographical reasons, Turkey has seen involvement with ASEAN as the key to having a firmer standing in Asia, which is in Ankara’s eyes a sine qua non condition for becoming a globally influential actor.
As a member of the Group of 20, and having recently become an official sectoral dialogue partner to ASEAN, Turkey sees that it can start building influence through these channels. This requires stronger bilateral relations with each of the ASEAN members, and Vietnam is a good place to start.
In Hanoi, Yıldırım stated that Turkey backed Vietnam’s bid for a non-permanent seat in the United Nations Security Council in 2020-2021, and asked Vietnam to support Turkey’s effort to become a member of the UN Educational, Scientific and Cultural Organization’s executive board for 2017-2021, which clearly shows Turkey’s motive behind having Vietnam and ASEAN as partners in global issues.
To be sure, ministerial visits are not enough on their own to build solid relationships between countries. However, long-term interests can be built through business relations, so plans mentioned during Yıldırım’s visit need to be turned into concrete reality.
In the meantime, the agreements signed, as well as the fact that Turkish Airlines operates direct flights to both Hanoi and Ho Chi Minh City, and that the Turkish Ministry of Foreign Affairs is soon to open a consulate in Ho Chi Minh City in addition to its embassy in Hanoi, will certainly help.
Turkey can make a strong foray into Southeast Asia through Vietnam, but words need to be supported by deeds, which come best in the shape of commerce and investment.