Want to see a partnership poised to reshape global finance? Look no further than Türkiye and Malaysia. These nations, strategically located between Asia and Europe, share deep historical ties and a powerful vision for economic prosperity. President Erdoğan recently reaffirmed their commitment to strengthening economic cooperation, focusing on Islamic finance leadership, defense collaboration, and boosting trade and investment. This alliance is set to make waves. Ready to learn more?
As these nations prepare to commemorate 60 years of formal diplomatic relations in 2024, their multifaceted partnership, rooted in centuries of cultural and commercial exchange, is poised to become a significant force on the global stage, particularly within the increasingly important and interconnected realm of Islamic finance.
Building a Strategic Alliance on Shared Values
The relationship between Türkiye and Malaysia is far from a recent construct; it is deeply embedded in the historical fabric of both nations. President Erdoğan eloquently reminded attendees at the business forum that the enduring bonds of friendship, cooperation, and mutual understanding stretch back some 500 years, a testament to the strength and resilience of their connection. This rich historical foundation, built on shared cultural values, mutual respect, a common faith, and a shared understanding of the importance of trade, partnership, and cultural exchange, has allowed the two nations to cultivate “excellent relations in every area,” culminating in the establishment of the High-Level Strategic Cooperation Council.
Erdoğan rightly emphasized the crucial and dynamic role of the business community as the “engine” of this strategic partnership, recognizing their dynamism, entrepreneurial spirit, innovative thinking, and ability to drive sustainable economic growth, create jobs, and foster prosperity. This council will serve as a vital platform for high-level dialogue, strategic coordination, joint planning, and the efficient implementation of the ambitious and mutually beneficial goals set by both leaders, ensuring that the partnership delivers tangible and measurable results for both nations.
A Foundation for Growth and Global Competitiveness
Despite navigating a complex and often volatile global landscape and facing significant challenges, including regional conflicts, geopolitical uncertainties, and the devastating 2023 earthquake, which President Erdoğan poignantly described as “the disaster of the century,” Türkiye has demonstrated remarkable economic resilience, adaptability, and a commitment to sustainable growth. “We are one of the few countries that have achieved an average annual growth rate of around 5% in the last 20 years,” Erdoğan stated, highlighting the nation’s consistent and impressive economic performance. This sustained growth is a testament to Türkiye’s diversified and increasingly sophisticated economy, its strategic and targeted investments in key sectors, and its proven ability to adapt to evolving global conditions and capitalize on emerging opportunities.
Over the past two decades, Türkiye has invested nearly $300 billion in infrastructure development, significantly expanding its capacity for trade, investment, connectivity, and technological advancement. Exports have increased more than 20-fold, and Türkiye’s share in global exports has doubled, demonstrating the country’s growing competitiveness in the international marketplace and its expanding role in global trade. The country has also attracted $270 billion in foreign direct investment, with the number of foreign-capital companies rising dramatically from 6,000 to over 80,000, indicating a strong vote of confidence in Türkiye’s economic potential, its business-friendly environment and its strategic importance as a regional hub.
“We have already started to reap the fruits of the economic program we have been strongly supporting for 1.5 years,” Erdoğan affirmed, reiterating Türkiye’s unwavering commitment to becoming a “global powerhouse” and building the “Century of Türkiye.” This ambitious and forward-looking vision encompasses not only sustained and inclusive economic growth but also significant advancements in technology, innovation, research, and development, particularly in high-tech sectors and social development, creating a more prosperous, equitable, and technologically advanced society for all its citizens.
Malaysia: A Vital Partner in ASEAN and a Gateway to Southeast Asia
President Erdoğan praised Malaysia’s impressive economic achievements, particularly its consistent trade surplus over the past 25 years, its well-developed infrastructure, and its established reputation as an attractive and stable destination for global investors. “Malaysia is our leading trade partner among ASEAN members,” he emphasized, highlighting the crucial importance of the 2015 free trade agreement, which was expanded to include services, investments, and e-trade, as a key driver of bilateral trade growth and economic integration. The trade volume has increased substantially from $1.7 billion in 2015 to over $5 billion in 2024, with both leaders setting an ambitious new target of $10 billion, signaling their strong intent to further deepen economic ties, promote greater trade diversification, and enhance economic cooperation.
“Mutual investments are another important aspect of our relations,” Erdoğan noted, recognizing Malaysia’s significant position as the second-largest investor in Türkiye in 2023. Malaysian companies, particularly under Khazanah Nasional, have made substantial and impactful investments in Türkiye’s healthcare, transportation, and energy sectors, with further investments planned in food processing, retail, and other promising sectors. Erdoğan identified substantial potential for future cooperation in a wide range of strategically important sectors, including construction, automotive manufacturing, food processing, electronics, and the rapidly expanding and increasingly sophisticated halal industry, recognizing the strong synergies and complementary strengths between the two economies.
President Erdoğan underscored Türkiye’s significant and impressive advancements in its domestic defense industry, emphasizing its willingness to share these capabilities with “friendly and brotherly countries,” including Malaysia, through mutually beneficial technology transfer agreements, joint production ventures, and strategic partnerships. He highlighted ongoing and expanding collaborations between prominent and technologically advanced Turkish firms like ASELSAN, HAVELSAN, and TUSAŞ and Malaysian partners.
Strengthening People-to-People Ties and Mutual Understanding
President Erdoğan stressed the vital importance of direct communication, reciprocal visits, cultural exchange programs, and educational initiatives in fostering strong social ties, building bridges between people, and promoting greater mutual understanding. He noted that Türkiye hosted over 61 million foreign tourists in 2024, including nearly 100,000 Malaysians, demonstrating the growing popularity of Türkiye as a diverse and culturally rich tourist destination. “Turkish Airlines and Malaysia Airlines have enabled us to strengthen social relations,” he said, calling for increased flight frequencies to further enhance connectivity, facilitate greater people-to-people exchange, and promote tourism, cultural exchange, and business travel. He also encouraged Malaysian business leaders to actively utilize business council mechanisms to deepen economic collaboration, build stronger professional networks, and explore new business opportunities.
President Erdoğan highlighted Türkiye’s strategic location at the dynamic crossroads of Europe and Asia, its dynamic and rapidly growing economy, its business-friendly and investor-centric policies, and its well-developed infrastructure, emphasizing the significant and diverse opportunities available for Malaysian investors seeking to expand their global footprint and diversify their portfolios. “Entrepreneurs trusting and believing in our country never have and never will regret,” he asserted, pointing to potential and high-growth investments in renewable energy, participation finance (Islamic banking), the halal industry, and other promising sectors.
He also mentioned emerging and potentially lucrative investment opportunities in Syria following the end of 13.5 years of conflict, inviting Malaysian businesses to leverage Türkiye as a production hub and a strategic gateway to European, Middle Eastern, and African markets, offering access to a vast, diverse, and increasingly affluent consumer base.
A Shared Vision for Shaping the Future of Global Finance
President Erdoğan emphasized the considerable and largely untapped potential for both nations to take a leading role in the development, innovation, and promotion of Islamic finance, particularly within the Organization of Islamic Cooperation (OIC) countries, which represent a significant and growing market for Sharia-compliant financial products and services. “I hope entities from the Malaysian finance industry will take their place at the Istanbul Finance Center, inaugurated in 2023,” he stated, underscoring Türkiye’s ambition to become a leading global hub for Islamic finance, attracting investment, expertise, and talent from around the world.
He also advocated for the greater use of national currencies in bilateral trade, a move that could further strengthen economic ties, reduce reliance on the US dollar, and promote greater financial independence. This shared focus on Islamic finance leadership reflects a deep and mutual commitment to developing innovative, ethical, and sustainable financial solutions that cater to the specific needs of Muslim communities and promote inclusive economic development. This includes fostering innovation in fintech within the Islamic finance sector leveraging technology to expand access to Islamic financial products and services.
A Future of Enhanced Cooperation and Enhanced Global Influence
President Erdoğan described Malaysia as a “key country” in Türkiye’s broader and strategically important Asia-Pacific strategy, expressing confidence that relations with ASEAN, a dynamic and increasingly influential regional bloc, will reach new heights, particularly during Malaysia’s 2025 ASEAN presidency. “I hope the business forum will help our brotherly countries’ business communities get closer and foster new partnerships,” he concluded. The Türkiye-Malaysia Business Forum served as a powerful and highly effective platform to underscore the shared and unwavering commitment to deepening economic ties, with both leaders expressing strong optimism about achieving their ambitious trade, investment, and collaboration goals in the years ahead.
Türkiye and Malaysia are poised to become Islamic finance leaders, shaping the future of ethical investment. Their growing collaboration across sectors promises a more prosperous future for both nations and the region. This partnership showcases the power of South-South cooperation, building a brighter future through shared vision. The deepening ties contribute to a more balanced and interconnected world. Explore our Islamic finance resources and investment guides to learn more.
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