SINGAPORE - Singapore firms are already exploring cooperation with the Central Asian country of Turkmenistan in the chemical and private education sectors, and there is potential to increase trade flows further, said Senior Minister of State for Trade and Industry Koh Poh Koon on Monday (Aug 26).
He was speaking at the inaugural Singapore-Turkmenistan Business Forum, organised in conjunction with the two-day state visit of Turkmenistan President Gurbanguly Berdimuhammedow ending on Tuesday.
Nine agreements were inked at the forum, including seven memorandums of understanding (MOUs).
Dr Koh said the total bilateral trade in goods between Singapore and Turkmenistan came up to $43.4 million in 2018, forming just a small proportion of the Republic's trade globally.
He told the forum at the Shangri-La Hotel that this indicates a potential for growth.
Singapore Business Federation chairman Teo Siong Seng said in his welcome address that current trade figures reflect a fivefold increase in Singapore exports to Turkmenistan since 2016, and noted growing interest between both sides' business communities.
The Republic's main exports to Turkmenistan include are machinery and equipment, mineral fuels, and rubber.
As Turkmenistan is one of Central Asia's fastest growing economies and endowed with vast natural resources, it is no surprise that some Singapore companies "have recognised Turkmenistan's economic potential and have taken steps to establish trade and investment links", said Mr Teo.
Turkmenistan's growth rate this year is forecast at 6 per cent by the Asian Development Bank, and its gas reserves are estimated to be the world's fourth largest.
Mr Chary Gylyjov, Vice-Chairman of the Cabinet of Ministers of Turkmenistan, said at the event that "investments act as the main instrument for the diversification of the economy".
"Annually, the share of investment allocated to the economy is over 30 per cent of gross domestic product," he said, adding that the share of foreign investment is up to 13 per cent of the total volume and that in 2018, the volume of investment in the country amounted to US$11.5 billion (S$16 billion).
Dr Koh noted that bilateral relations have been growing with exchanges at the political level, and expressed his hope that "these political engagements can be bolstered by commercial interactions".
In 2017, then Minister of State for Manpower and Foreign Affairs Sam Tan visited Turkmenistan for the 5th Asian Indoor and Martial Arts Games, and Singapore has been welcoming Turkmenistan delegations on various occasions this year, he said.
These included visits by its Deputy Minister of Foreign Affairs Berdiniyaz Myatiyev.
"At the government-to-government level, Turkmenistan and Singapore are working closely together to create conducive conditions for our businesses," said Dr Koh.
For example, both countries just ended negotiations on an Avoidance of Double Taxation Agreement, which reduces withholding tax rates of dividends, interest and royalties, he added.
This is expected to boost cross-border trade and investment, and such efforts to improve the regulatory environments of markets are key to enhancing trade and investment flows - ultimately growing the economy, he said.
He also encouraged the Turkmenistan people to consider Singapore as a "springboard into South-east Asia", which has a market of more than 600 million people and a fast-growing urban middle class.
The MOUs signed on Monday included one on the development of the chemical and fertiliser sectors in Turkmenistan, and another for cooperation between higher education institutions.
The Association of Banks in Singapore and the State Bank for Foreign Economic Affairs of Turkmenistan also signed a cooperation agreement to strengthen collaboration in banking and financial services, including cross-border money transfers and payments.
DBS Bank and the State Bank for Foreign Economic Affairs of Turkmenistan inked an agreement as well, with the aim to expand trade, financial and economic cooperation between both countries.