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D-8 to Gain More Importance in Years to Come

Istanbul, Turkey | December 07, 2009 by D-8 Secretariat

The Turkish Foreign Minister, Ahmet Davutoglu (left), and D-8 Secretary General, Dipo Alam (right), recently met and discussed several issues including the need to boost further the trade potential between Indonesia and Turkey

Turkish Foreign Minister, Ahmet Davutoglu (left), and D-8 Secretary General, Dipo Alam (right), recently met and discussed several D-8 issues including the need to boost further the trade potential between Indonesia and Turkey

Developing-8 (D-8) Organization for Economic Cooperation Secretary-General, Dipo Alam, has predicted that the trade volume among D-8 member countries will increase from its current level of 6 percent to 10 to 15 percent of the organization’s total trade by 2018, adding that the D-8 has potential and will eventually grow to be one of the leading organizations in the world.

Speaking to the Anatolia news agency recently, Alam talked about future projects of the organization, which is a group of developing countries — Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey — that have an economic development alliance. The organization was founded in 1997 by the then-prime minister of Turkey, and Alam said when he came to office in February 2007, some 10 years after the establishment of the D-8, he found that the organization was still lacking a roadmap, regulations or procedures and a well-functioning Web site. The required legislation for the creation of the organization’s main office in Turkey was even absent then, he noted, adding that he concentrated on developing the institutional structure in his first one to one-and-a-half years in office.

“Despite the global financial crisis, the trade volume among the member states of the D-8 reached $78 billion in 2008. Total trade volume of the D-8 also increased to $1.3 trillion. The share of trade among D-8 members in the total trade of the organization was 6.08 percent, which accounted for a significant rise [compared to previous years]. According to our roadmap, trade volume among member countries will increase to 10 to 15 percent of the organization’s total trade.” He stated that agreements about preferential trade and easing custom and visa requirements, which were already prepared and waiting the approval of the countries, play an important role in reaching this goal.

Tabel 1: D-8 Intra Trade (2008)

Tabel 1: D-8 Intra Trade (2008)

Mutual Investment Projects

The organization’s main strategy is to boost trade among member countries and mutual investments, Alam stated, adding that they are trying to decide in which fields to make mutual investments. “For instance, the D-8 can jointly invest in manure production. Iran, Nigeria, Indonesia and Malaysia own important amount of nitrogen sources for the production of synthetic manure. The production plant might be located in Iran. I also had talks with Gübretaş, which previously made investments in Iran. Indonesia and Iran plan to allocate $600 million for investments. We hope other countries will also join them,” he said, adding that Turkey also supports this investment project with its sources of boron that can be used in the production of manure. The joint investment fund project is planned to be completed in 2010, he added.

Turkey and Indonesia to Gear Up Boosting their Trade Volume

In a recent talk with the Turkish Foreign Minister, Ahmet Davutoglu, Alam discussed several issues including the need to boost further the trade potential between Indonesia and Turkey. With their high levels of gross domestic product (GDP), Turkey and Indonesia are part of the G-20, Alam said, adding that, however, the trade volume among the two countries is less than $2 billion. “It’s surprising to see that eventhough we have a large market in our countries, Turkey with around 70 million and Indonesia with around 230 million, our trade volume is much below our expectation,” he said.

He said that Turkey is currently on the negative bench of the trading table, where in 2008 she exported a mere 870 million US$ and importing 1,2b US$ from Indonesia. “This put an imbalance of trade for Turkey to Indonesia, which counts at around (minus) 345 million US$,” he explained (see table 2). In the framework of cooperation within D-8, these kind of imbalance between member states should be improved by various measures such as full implementation of Preferential Tariff Agreement and the simplification visa procedures for D-8 businesspersons. “At Secretariat, we frequently receive complaint letters from our business communities, especially from Turkey, who were discouraged by the visa procedures and wish that the visa shall be exempted, or at least be simplified,” Alam said. The business communities of Turkey believe that visa exemption, or if not - visa simplification, will tremendously contribute to enhancement of trading position and opportunities between Turkey and Indonesia.

Table 1: Indonesia Trade with D-8 Countries (2008)

Table 2: Indonesia Trade with D-8 Countries (2008)

In the discussion with Turkish FM, Davutoglu, Alam also discussed about the potential of D-8 in the international arena. “Several studies talk about the importance of the BRIC countries — Brazil, Russia, India and China. However, we talked about BRICMIT. We are working hard to include Malaysia, Indonesia and Turkey into the BRIC countries, too. The D-8 possesses potential in this regard. Both Turkey and Indonesia have an important potential concerning their market sizes, natural resources, their roles among both world and Islamic countries. In the future, the D-8 can emerge as today’s G-7 or even it can gain more importance than the G-7 has,” Alam said.

He cited the establishment of a joint investment fund as one of the future projects of the organization. “Work is under way to set up a joint investment fund. Iran promised to allocate 15 million euros for the fund. I hope other countries will also act this way,” he said.

Alam, stressing the large number of D-8 countries’ citizens living and working abroad and the amount of money being sent home by these workers, said the organization plans to further improve the remittance sector of the member countries. The D-8 Working Group of Migrant Workers, Remittances and Microfinance will also inform the workers and their families about how to better make use of this money, he said.

News Source: Today’s Zaman and D-8.

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