The Association of Southeast Asian Nations (ASEAN) is a pioneering organization that brings together the countries of the region within the framework of economic and political cooperation. Currently, the total economic size of the 10 countries that make up ASEAN has reached $3.6 trillion and their populations have reached 700 million. ASEAN is guided by its core principles and values and the organization and its member countries have overcome many challenges, emerging as a key regional player in the global economy. ASEAN is on track to become the fourth-largest economy by 2030. Reflecting its economic potential, the ASEAN bloc is forecast to grow by 4.9% this year and 5.2% next year.
Moreover, ASEAN’s Regional Comprehensive Economic Partnership (RCEP) is a historic agreement that brings together 15 Asia-Pacific countries that generate almost one-third of the global economy with a population of more than 2.2 billion and a total gross domestic product (GDP) of $26 trillion.
On the other hand, ASEAN's share in Türkiye's total foreign trade was 2% as of 2021 while its share in our foreign trade with Asia-Pacific countries stood at 18%. However, it is said that the aforementioned rates do not reflect the potential between Türkiye and ASEAN countries whose economic and political weight in the world is expected to only increase.
Road map for non-ASEAN countries
Many countries recognize the importance of ASEAN but most lack strategy and do not know how to approach the bloc. In this regard, non-ASEAN countries first need to clarify their "ASEAN policy." Many countries suffer from trade deficits but successful cooperation can be achieved by focusing on the trade deficit while also looking at trade from a multifaceted perspective. This perspective would include the coordination of nongovernmental organizations (NGOs), economic and business associations, and foreign and trade ministries. In this respect, countries should be evaluated in terms of their individual dynamics while also keeping in mind the ASEAN umbrella.
What is more, non-members that want to join the ASEAN economy should maintain good trade relations as becoming a pilot country is a starting point to entering the ASEAN market. In this context, the aim is to establish comprehensive trade relations to reach the RCEP market through existing positive political and commercial ties. For example, in this regard, Türkiye might lean toward Malaysia or Indonesia. It has been mentioned that the existing religious, commercial, financial and political ties make these member countries more prominent, in addition to the convenience of the political, economic and geographical proximity to Singapore.
Moreover, allocating private investment land for Turkish investors in one of these countries and Türkiye providing financial support to investors in establishing warehouses and offices may be an option that facilitates doing business in the country and the region. However, for any country, it is essential that the investing and hosting governments and business worlds work in coordination when it comes to planning and regulations.
One source of debate is the presence of China within the RCEP agreement, with some arguing it led countries to sign foreign direct investment (FDI) deals among themselves and that this should be analyzed by non-member countries.
Many non-member partner countries financially fund ASEAN. For instance, as a sectoral dialogue partner, Türkiye has given ASEAN more than $1 billion. Countries and their governments and NGOs should be aware that they can carry out relevant projects and strengthen their ties with ASEAN.
Turkish experience with ASEAN
This year is crucial as it marks the 55th anniversary of the establishment of ASEAN and celebrates the fifth anniversary of the sectoral dialogue partnership between the bloc and Türkiye. Türkiye’s ties with ASEAN go back to 1999.
It is not possible for non-regional countries to become full members of ASEAN. However, Türkiye as a sectoral dialogue partner is aiming to become a "dialogue partner," which is the highest status in the organization for non-regional countries.
Türkiye-ASEAN institutional ties are based on the "Sectoral Dialogue Partnership" founded in 2017, covering areas of mutual interests, political security and economic, sociocultural and development cooperation. In June 2022, ASEAN and Türkiye renewed their commitment to further strengthen their cooperation at the fourth meeting of the ASEAN-Türkiye Joint Sectoral Cooperation Committee. The recent trilateral ministerial meeting on Aug. 3 also highlighted the progress made and set out its future direction.
Türkiye's "Asia Anew Initiative" aims to re-energize its relations with Asia. Moreover, several ASEAN countries, such as Indonesia, the Philippines, Malaysia and Thailand, feature in the recently announced in the Trade Ministry's recently announced "Far Countries Strategy," which aims to boost bilateral trade between Türkiye and the countries.
There is a great deal of potential for closer cooperation under the sectoral dialogue partnership framework and the Asia Anew Initiative, bearing in mind Türkiye’s place in the Asia-Europe region and world and the potential of ASEAN. It is a fact that Türkiye’s existing customs union with the EU offers more advantageous market access conditions for industrial products that no other third country is able to provide. Moreover, Türkiye’s network of free trade agreements with 22 countries will allow access to companies in ASEAN countries.
According to the data from ASEAN member countries, their exports to Türkiye stood at $5.6 billion in 2020 but this figure increased to $8.4 billion in 2021. The 88% increase in Malaysia's exports to Türkiye in 2021 compared to the previous year has been a determinant in the increase in exports of ASEAN countries. Exports from Indonesia, Thailand, Vietnam and Singapore to Türkiye increased by $1.2 billion compared to the previous year and reached $4.9 billion.
ASEAN countries' imports from Türkiye increased by 41% in 2021 compared to the previous year and amounted to $2.8 billion. Singapore's imports from Türkiye increased by 125% compared to the previous year and reached $861 million, while Malaysia, Indonesia and Vietnam imported $450 million more from Türkiye compared to the previous year.
According to Deputy Minister of Trade Mustafa Tuzcu, bilateral investment relations are quite robust. Türkiye's foreign direct investment stock to ASEAN countries increased from $257 million in 2015 to $471 million in 2021. However, we know that this figure is in reality far higher when we take the Turkish investments to the ASEAN region via third countries into consideration. Among the ASEAN countries, Türkiye made the highest investments in Malaysia, Indonesia and Thailand, respectively. On the other hand, ASEAN countries' foreign direct investment stock in Türkiye was $2.06 billion in 2015. Following an unstable trend for a while, it started to increase in 2020 and reached $10.3 billion in 2021. Singapore and Malaysia have also made the highest investments in Türkiye among member countries.
Once the Turkish Embassy was established in Laos in 2018, Türkiye had a diplomatic presence in all 10 ASEAN member countries. In addition, Türkiye became an observer member of ASEAN’s police organization, ASEEANAPOL, in 2014. The Turkish Cooperation and Development Agency (TİKA) has been actively providing development assistance in the region, at a cost of nearly $147.8 million between 2005 and 2015.
The Turkish government's Asia Again Initiative and ASEAN-centered policies will contribute to the development of closer ties between the bloc and Türkiye. These bonds will be mutually beneficial in responding to challenges and seizing new opportunities in today's world.
One recent development is that the Foreign Economic Relations Board (DEIK) – the Turkish business world's representative – established the ASEAN Working Group and held a conference on Dec. 14 that saw the attendance of eight ASEAN ambassadors, members of the business world, academics, diplomats and bureaucrats from Türkiye and the bloc as well as the related department directors from the Turkish Trade Ministry and Foreign Ministry. It shows that Türkiye is not only preparing for further steps from the government side but also from the civilian side. On the same day, the EU-ASEAN commemorative summit has held in Brussels.
Similar moves are expected in 2023, which will mark the 100th anniversary of the foundation of the Republic of Türkiye. Currently, the Turkish business world has focused on the following processes:
– Increasing mutual awareness in order to be more involved in the ASEAN market and to benefit more from RCEP.
– Strengthening the ongoing economic cooperation between Türkiye and ASEAN, which has the largest trade agreement (RCEP) in the world; identifying and removing obstacles to the development of bilateral economic relations between ASEAN and Türkiye.
– Working toward increasing awareness about Türkiye in ASEAN countries and raising mutual awareness.
– Articulating the needs and expectations of the Turkish private sector in order to protect its interests in matters concerning relations between Türkiye and ASEAN.
– Coordinating with consultancy firms active in the fields of lobbying and strategic communication with ASEAN countries to ensure a positive perspective of the country and the Turkish business world.
– Promoting more business, networking, trade, investment and economic relations through conferences and business partnership events.
Mutual visits by business delegations can be organized in the high-tech products, agriculture and food sectors and partnerships can be established. In this regard, preparations can be made for ASEAN member states to recognize the Organisation of Islamic Cooperation's SMIIC standards in the field of halal certification.
To sum up, ASEAN's geographic, geostrategic and geoeconomic position, in addition to the RCEP agreement, has gained importance in the world economy and in terms of regional security, energy, trade and logistics. The tariff-free network brings dynamism to ASEAN and the region. Non-ASEAN countries should work hard to promote and facilitate more interaction between their private sectors and the bloc. It is a fact that the gap does not lie in the physical distance between countries, but rather in the lack of awareness about each other’s potential. It is possible to develop "cooperation in competition" and follow a "win-win" approach between the two sides. There is no doubt that non-members should determine their ASEAN road maps to establish beneficial ties with ASEAN countries. The road map also helps non-ASEAN countries avoid risks from potential competition.