In an exclusive interview with Sunday’s Zaman, while in Turkey for a meeting to announce the opening of his country’s trade office in İstanbul last week, Lee said Turkey and Singapore are two of a small number of nations that have exhibited sustainable resilience against global shockwaves and maintain their preparedness against a possible new global crisis.
It would be naive to say that Turkey and Singapore remained wholly unscathed in the 2009 global financial fallout. The two nations had open economies well integrated with the rest of the world. The crisis, therefore, dealt a blow to their exports, while plugging investment inflow channels. Turkey and Singapore -- popularly referred to as Anatolian and Asian “tigers” -- had to face their own challenges. They did, however, both manage to overcome their difficulties, thanks to well-established financial fundamentals and timely stimulus packages. The Asian city-state recorded 4.8 percent growth over 2010. The Turkish economy expanded by 8.5 percent over the same period, becoming the fastest growing economy in Europe and within the greater Organization for Economic Cooperation and Development (OECD).
Lee said a lingering European sovereign debt impasse and weak global market data remain concerns for rapidly growing markets like Turkey and Singapore. “These two [countries], however, are relatively privileged due to their proximity to dynamic markets, not to mention good economic governance,” he explained.
“We are concerned with developments in the eurozone as well as weak US data. Possible consequences, in the worst case scenario, including loss of confidence in financial markets, will have a negative impact both on Turkey and Singapore, since the global financial markets are now well connected,” Lee noted. He added Turkey and Singapore have taken new measures to mitigate potential negative impacts due to these external factors. Remarking that Turkey exports around 50 percent of products to the EU while this figure is 12 percent for Singapore, he said it is critical that the “purchasing power of the EU remains high.” According to Lee, Turkey and Singapore still have a leg to stand on, despite external shocks. “This depends on how successfully we capitalize on growing markets in Asia. We are close to [all major economies in] Asia and that is an advantage for us. That part of the world will continue to offer growth opportunities. We will be quite happy to see Turkish markets utilize this potential, too,” he said. According to Lee, Singapore is expecting relatively slow growth over next few years. “Lack of room for new jobs remains a constraint for us; unemployment is less than 2 percent, and we are going to slow our rate of growth. Otherwise, we will need to employ foreign workers.” However, Lee said Turkey is still on its expansion path and needs to generate more employment, stating: “Both countries are trying their own methods to create a stable system that can help weather global shocks. ... Time will tell how successful we are.”
Referring to a recently introduced government investment incentive package to promote capital inflow to Turkey’s relatively less developed regions, Lee said: “We are certainly interested in these incentives. Creating an environment to attract foreign investments requires you to compete with rivals. Turkey has gained experience in providing quality manpower, business regulations, tax incentives and political stability. We are hopeful that Turkey will succeed in attracting new direct investments.”
Singapore has free trade agreements (FTAs) with 18 countries and economic zones, which has been one of the driving factors of their economic success. The minister said Singapore is also currently considering an FTA with Turkey. “We have already started discussions for a possible FTA with the Turkish authorities. The pace of discussions will accelerate from now on. We hope that we can complete talks sooner than later. I sense there is a strong desire on both sides to conclude the deal,” he noted. Calling on Turkish investors to explore business opportunities in Singapore, Lee said the people in his country are beginning to appreciate different aspects of Turkish products and culture. “Singapore sent more than 20,000 tourists to Turkey last year, and this is a good number considering our small population; we can improve tourism, too.”