Ample Opportunities for Cooperation

The leading article of the recent Turkish Focus in Diplomacy&Trade was a comprehensive interview with the Ambassador of the Republic of Turkey to Hungary, Ahmet Akif Oktay. He talks – among other issues – about the growing trade and investment relations between the two countries, especially in the field of energy as well as the wide-ranging cultural ties.

Ambassador Oktay began his tenure in Budapest in January 2018. In recalling the development of bilateral relations since then, he refers further back in time, to 2013. “Since that year, we have described our relationship as a strategic partnership. That was when we first established the intergovernmental mechanism attended by not just the leaders of the two countries, but also many government ministers. This way, we are able to take decisions at the highest level and then implement those decisions effectively. During my time in Budapest, we had the fourth round of the High-Level Strategic Cooperation Council meeting in 2019, with the next one scheduled for November 11 this year. But since 2018, of course, many other good things have also happened like registering good growth in bilateral economic ties. Despite the COVID-19 pandemic, our trade volume did not decline, but stayed at the same level,” he tells Diplomacy&Trade.
“Our president has paid two visits to Hungary since I took up my duties here. We also had a visit by the then speaker of our parliament who came to Budapest at the end of 2018 to celebrate the 95th anniversary of diplomatic relations between the two countries that began with the friendship agreement signed in 1923, just after the Turkish Republic was established. Hungary was one of the first countries with whom we signed such an agreement. Of course, many ministerial visits also took place in the meantime. So, in my view, we have made good progress. I would have liked to see even faster progress, but unfortunately our tempo was somewhat slowed down last year by the COVID-19 pandemic that all countries suffered from diplomatically,” he adds.

Turkey and the EU
Hungary is a member state of the European Union. As to how important this fact for Turkey is, the Ambassador reminds us that his country is a candidate for membership in the EU. “Unfortunately, now, the European Union has developed a new terminology. They are referring to the Western Balkans as a group of candidates for accession and Turkey is not included in this category. We want to be treated on an equal footing with the other candidate countries. We are, in fact, an accession country that has begun active membership negotiations and therefore, we are in the pipeline to join the Union one day. We supported Hungary after the communist period came to an end and Hungary became a democratic state. We supported Hungary's integration with Western institutions like OECD and NATO, and now Hungary is returning the favor and they are supporting us within the EU.” Referring to the problem of migration from Asia to Europe – with Turkey located in between – Ambassador Oktay says “it is kind of an unresolved issue. In 2016, Turkey made a deal with the European Union, in which the EU said it would open new negotiation chapters with Turkey, they would provide visa free travel to Turkish citizens, and customs union upgrade talks would start, etc. – unfortunately, none of these happened. The EU side promised to send us financial aid to help the refugees in Turkey where we have 4-5 million people, mostly refugees from Syria, but from other countries as well. As a result of this arrangement, the influx to Europe has radically decreased, maybe by 95%. However, from our perspective, this is a half-fulfilled deal. From the EU side, we are still waiting for concrete steps on the aforementioned issues. EU leaders visited Turkey earlier this year, so these issues are being taken up at diplomatic talks.”

Economic relations making progress
Before the pandemic situation arose, the volume of bilateral trade had been on a constant trajectory of growth for 10-15 years. As the Ambassador highlights, “in 2018-19, the leaders of both governments set a new target: to double this growth rate and increase the annual volume to USD six billion. We haven't reached that target yet but we are making progress as we have the potential. This year, there are promising signs that our trade is getting back to its normal pace of growth, slowly but surely. However, when it comes to investments, it's a completely different picture. When you compare the situation between 2018 when I first came here and now – after more than three and a half years –, there is a tremendous growth of Turkish investments in Hungary. According to our calculations, the actual, physically realized investment volume is about USD 700 million and it is growing exponentially every year. We believe that in a few years’ time, it will increase to USD 2-2.5 billion, maybe even more, because there are mega projects in the works, which are either already being implemented or in the planning stage.”
The examples mentioned by the Ambassador include a Turkish company, which is establishing a rockwool factory to produce building insulation material in Miskolc. There is another Turkish investor establishing a factory for manufacturing cabins for tractors and similar agricultural machinery in Iváncsa, while the most recent example is the Şişecam glassware factory that establishes its first European glass-packaging facility in Kaposvár with a greenfield investment of EUR 220 million. “In terms of services, Turkish firms are also very active here – especially in the hospitality business. Others are busy building large housing projects and thus, thousands of housing units will be built by Turkish companies. Other companies are working as subcontractors for, for instance, the Hungarian oil company MOL and others. Another example is the factory that BMW wants to establish in Debrecen Although the project is delayed, several Turkish companies are interested in working there as subcontractors. An additional opportunity for Turkish contracting firms is the large scale, but also delayed, expansion project of the Paks nuclear power station,” he adds.

Cooperation in the field of energy
Diversifying the energy supply is an important issue for Hungary. As to how Turkey can contribute to this goal, Ambassador Oktay says “we are already contributing as Turkstream II is about to become operational. Now, the construction of the pipeline, both on the Serbian side and the Hungarian side has been completed, and Hungary is supposed to begin receiving Russian gas through this pipeline very soon. The Turkish Petroleum Company and the Hungarian oil company MOL are also cooperating in different parts of the world on joint exploration projects. A major part of the Turkish companies’ portfolio in Hungary is in the energy sector. There is at least one large scale company, which wants to build an EUR 800 million solar energy farm in Hungary. So, we are not just serving as a transit country for Hungary in importing oil and gas but we are also actively involved in energy projects in Hungary itself. In short, it's a very promising area and we can also work with Hungarian companies in Turkey, in the Middle East, in North Africa. The sky's the limit!”

Military partnership
Turkey and Hungary are both members of NATO and this partnership was also discussed by the visiting Turkish defense minister in February this year. As regards the main aspects of military cooperation between the two countries, the Ambassador explains that “for a long time now, we have been cooperating on the basis of NATO. We take part in joint military exercises, and we consult closely through our delegations in Brussels. We are happy about our alliance not just within NATO but on a bilateral level as well. Defense industry is emerging as a promising sector of cooperation. Last February, ten armored vehicles produced in Turkey were delivered to the Hungarian army, they are known as ‘Gidrán’ here. We have an agreement on the procurement of defense material to Hungary, and the production will shift to Hungary as well.”
He also mentions a symbolic development showing bilateral military cooperation by which the ‘Turkish Stars’ aero acrobatic team of six planes flying in formation produced a performance at the Kecskemét military air show in Hungary earlier this year. “As the Hungarian government implements the Zrínyi 2026 Defense and Military Development Program, the Defense Ministry is buying equipment and establishing factories here for joint production as well with a number of countries. We are also ready to cooperate with Hungary in any way we can, including joint production here and the sharing of technology.”

Cultural ties
Ambassador Oktay stresses that good progress in bilateral relations has also been made in the cultural field. “One of the most important developments was the opening in Budapest – during the visit in 2018 of the Turkish President – of the Gül Baba Türbe (tomb). Cultural cooperation is maybe the richest area where we had the most visible progress during the past three and a half years, and this was the most comprehensive restoration of the tomb site with both countries taking part in it. We are very happy about it but there are many other history-related projects waiting to be implemented.”
He highlights that Hungary and Turkey were allies during the First World War and Turkey sent about 30,000 soldiers altogether to fight alongside Austrian and Hungarian troops but only about 12,000 of them returned to Turkey. “So, many, many soldiers died along the frontline in Galicia and some of them also lost their lives in Hungary, in hospitals and other places. Therefore, we established here a Turkish martyrs cemetery, which, since 1926, has been managed by our embassy. On March 18, every year, we have a special commemoration ceremony for those 480 soldiers. But Hungarian soldiers also died defending Turkish soil, especially during the campaigns in the Gallipoli area where at least several hundred Hungarian soldiers fell fighting. To commemorate them, Hungary will establish a monument in the Gallipoli historical peninsula. The Hungarian minister of defense will be in Turkey hopefully sometime next year to inaugurate this monument.”
But there are projects in Hungary too. For instance, in Szigetvár, where Sultan ‘Suleiman the Magnificent’ died on his last campaign in Hungary and his remains were buried near the town center. That location was determined after many years of search and technical studies. Now, the Hungarian government wants to turn this site into a memorial center for visitors, “like maybe Gül Baba Türbe. As soon as the project is prepared and the Hungarian side informs us, we are ready to cooperate on that project as well. We can send material from Turkey to be displayed in the museum to be built for that purpose, and contribute financially to the project. So, it will be the next big step but, unfortunately, I may not see it because my tour of duty in Hungary is slowly coming to an end as our ambassadorial term is normally a four-year period. But the work will go on, I have no doubt about it,” he points out.
As for other cultural issues, there are about 830 Turkish students studying in Hungarian universities, and Hungary is providing 150 Hungaricum scholarships. The Ambassador believes this number may increase because there are many more applications to this program than the actual scholarships provided. “Of course, there have also been many, many other steps like the opening of the Turkish Maarif Foundation school in Budapest but one of the most important developments will take place in the year 2024, when we will celebrate the centenary of our diplomatic relations as the 1923 friendship agreement came into effect the following year (and the mutual embassies were also opened in 1924). To that end, we will designate 2024 as the Turkish-Hungarian cultural year, which has never happened before between the two countries. Throughout that year, both countries will promote their culture, history and social ties with more systematic activities in each other’s territory. During the upcoming intergovernmental meeting in November, we will sign a protocol on that, set up a working group and start the preparations. I'm sure it will be a very rich year. I'm also glad that the first step is being taken during my tenure in Hungary. I am sure that my successor will take the further concrete steps,” the Ambassador concludes.