As two key countries geographically located on two wings of the Muslim world, their people enjoy excellent bilateral relations based on friendship, brotherhood and trust.
“Malaysia has been a “Strategic Partner” since 2014, last year, we have elevated this partnership to the level of “Comprehensive Strategic Partnership,” this was the positive sentiment expressed by Ambassador of the Republic of Türkiye to Malaysia, H.E. Emir Salim Yuksel to BusinessToday on enhancing mutual trade and G2G ties between both nations on the background of calls made by President of Türkiye H.E. Recep Tayyip Erdoğan and Malaysia’s Prime Minister H.E. Datuk Seri Anwar Ibrahim.
“In many areas we enjoy a common standpoint. We cooperate at different international fora such as the United Nations, the Organization for Islamic Countries and the Developing 8. Developing Eight (D-8) was established through the Istanbul Declaration, which was agreed at the 1st D-8 Summit on June 15, 1997 in Istanbul, Türkiye. D-8 consists of eight developing countries, namely Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Türkiye.
POSITIVE BILATERAL TRADE AND FTA
Recently, Türkiye – Malaysia bilateral trade has been on an increasing trend and is expected to double in the coming years following the inclusion of additional protocols in their Free Trade Agreement (FTA), which was initially signed in 2015 and expanded in September last year. H.E. Emir Salim said bilateral relations that are already well established could be improved further and there is a huge untapped potential in trade and investment between the two nations.
“Now the FTA includes trade in services and e-commerce, as well as in investments. Last year, the bilateral trade approached US$5 billion (US$1=RM4.54).”
This echoes the call made by Prime Minister Anwar recently in that the Malaysian government will continue to strengthen the business-to-business network and welcomes companies from Türkiye to explore various opportunities here. To date, six manufacturing projects involving a total investment of US$123.2 million (RM571.4 million) have been implemented and in 2022, Türkiye was Malaysia’s third largest trading partner, largest export destination and sixth largest source of import among West Asian countries with bilateral trade amounting to US$4.62 billion.
To add, H.E. Emir Salim said, “The FTA now includes services, investments and e-commerce. Total exports of Türkiye to Malaysia for the first half of 2023 increased by 6.7% and recorded at 244 million dollars (Compared to the same period in 2022). Total imports of Türkiye from Malaysia decreased by 8.17 % for the first half of 2023 recorded at 2 billion dollars (Compared to the first half of 2022).
We believe the decrease in our imports from Malaysia, in monetary terms, was due to falling global commodity prices. As the commodity prices are on the rise again, the decrease in our imports might not continue for the rest of the year. On the export side, with the establishment of new collaborations between Turkish and Malaysian companies, exports are expected to increase in terms of quantity and product variety.
Malaysia remains as Türkiye’s largest trading partner in ASEAN. Last year, the nation was the number one export destination for Malaysia among the West Asian countries. Furthermore, the bilateral trade volume has been increasing where Türkiye’s total exports to Malaysia stood at US$478 million last year compared to USD$445 million in 2021 — increasing by 7.4%. Imports from Malaysia recorded at US$4,3 billion which increased by 38,4%.
In the last fifteen years, Malaysia made significant investments in Türkiye mostly in the form of concession agreements. “I can say that Malaysia’s direct investments in Türkiye concentrate on certain sectors such as healthcare, transportation and insurance services. In recent years, however, Malaysia found new venues to settle in Türkiye. For instance, Malaysia’s largest home improvement retailer has been growing rapidly in the Turkish market since its entry in late-2021.In this vein, further lucrative areas of investments in Türkiye may include renewable energy, participation banking and halal tourism.
On the other hand, an enormous potential for Malaysian investors remains untapped in Türkiye’s fast-growing resilient economy with over US$1 trillion GDP. Malaysian businesses have recognised this potential by seeking investment opportunities in Türkiye. As the Turkish Embassy, we strive to help Malaysian investors discover the investment opportunities in Türkiye.
Last June, in collaboration with Turkish Investment Promotion Agency, the Embassy organised a reception in Kuala Lumpur for Malaysian investors, and received very good feedback from the Malaysian business community. Again, in June, the MUSİAD Business Association Delegation was in KL. They were in a joint business event which was honoured by the Prime Minister of Malaysia.
“I think that we will observe the outcomes of Malaysian investors’ growing interest toward Türkiye in the investment figures. We believe, Türkiye can record over US$100 million in direct investments from Malaysia on a yearly basis from this year. Our goal is to secure a place for Türkiye among the Malaysia’s major direct investment destinations in West Asia with a diversified and dynamic asset portfolio.”
The expanded FTA also not only reduces and eliminates many tariffs involved but also provides an impetus for the increase in the flow of goods and services while encouraging investments. This opportunity gives Turkish and Malaysian businesses an improved access to a wider range of competitively priced goods and services, new technologies, and innovative practices.
We do not evaluate the FTA as a single instrument signed and shelved, but rather as a living entity, destined to evolve to reflect the mutual needs and interests. In this regard, the respective Ministers signed the Revised Agreement of FTA on September 29, 2022 to aim for the highest possible level of commitments with wide sectoral coverage and progressive rules on areas like services, e-commerce and investments.
With its modern rules, the revised FTA will serve to create a more predictable and transparent business environment for investors, service suppliers and businesses in both countries. And, even further expansion is always possible. If need be, the two countries always open to amending the existing FTA further.
Asked on a considerable trade deficit against Türkiye, H.E. said they attach importance to the sustainability of the trade balance for both countries and will work creating export opportunities to Malaysia with the ultimate aim being to permanently increase the bilateral trade volume on a win-win basis as the biggest benefit of our countries.
The bilateral trade is largely diverse in its nature. From textiles to organic chemicals and from machines (including the products of defense industry) to dry fruits, in trade. I should add that palm oil dominates Turkish imports from Malaysia.
THE DEFENSE SECTOR
Important Turkish defense industry companies have already achieved a great deal of recognition in Malaysia. “We always say that Malaysia is not a market for us, it is a partner.
Turkish defense industry has made a great leap forward during the past few decades. Turkish companies are now producing rifles, armoured vehicles, artillery units, various missile types with ranges of up to 1,000 km, helicopters, light attack aircrafts, littoral mission ships, anti-submarine warfare corvettes and most importantly, advanced armed drones, like ANKA, whose reputation has reached all parts of the world.
Important Turkish companies, like TAITurkish Aerospace (TUSAŞ), have established solid cooperation with Malaysia. The government owned company has had a presence in Malaysia since 24 November, 2021 through its design, engineering and research office in Cyberjaya. It has been already integrated into Malaysia through institutional collaborations by employing Malaysian talent.
There is also FNSS, Havelsan, Aselsan and Nurol which have already achieved a great recognition here. These companies are keen on increasing their cooperation with the Malaysian side. The interest in deepening the cooperation in the defense sector is mutual and there is a clear opportunity to make this partnership work based on excellent bilateral relations.
THE HALAL MARKET
“Here, I would like to talk about the potential for cooperation in agricultural sector. Türkiye is the largest country in Europe in terms of agricultural economy producing fruits, vegetables, dried fruits and nuts, olive oil, grains, seeds, dairy and meat products, So, there is enormous potential that we can be a source country in ensuring food security for Malaysia.
Asked on Türkiye being known as one of the world’s Halal Market leading players, H.E. said with its favourable geographical conditions, climate and well-developed agricultural industry, Türkiye is one of the leading countries in the field of agriculture and food production. Malaysia has the palm oil, its produces the king of fruits (durian), etc. Yet Malaysia has to import a significant amount of food as well.
Using the latest technological developments and in meeting the halal standards, Turkish producers are ready to supply food (fresh, packed or canned) and agricultural products to Malaysia. In addition, Malaysian and Turkish companies have the opportunities for collaboration in Halal manufacturing not only for their local markets but also for the European Union and ASEAN markets.
At the 9th OIC Halal Expo 2022, Malaysian halal industry players participated and initiated further expansion of halal corridors with businesses from Türkiye and more Malaysian halal companies have been able to establish partnerships with Turkish businesses since. To thrive in today’s global halal market, both Türkiye and Malaysia are eagerly building networks to exchange information to enhance collaborations.
Türkiye also attaches importance to the participation of Turkish companies to MIHAS, especially the Turkish Halal Accreditation Agency. Also, the 10th OIC Halal Expo will be held from 23rd to 26th November 2023 in Istanbul, Türkiye and they expect participation from over 25 countries. The event will bring together many sector representatives from fields such as food, cosmetics, textiles, finance and tourism.
High participation of businesses in the said fairs will facilitate deepening of the halal market for both nations, added H.E. Emir Salim.
Malaysia and Türkiye have established diplomatic ties since 1964.
Turkish Embassy Office of the Counsellor for Commercial Affairs can be reached at [email protected] and +603 216 30 910 for further inquiries.
