Speaking via video conference at the International Conference on Islamic Economics and finance President Erdogan said “participation banking and utilization tools of Islamic finance and economics” would enable Istanbul to introduce a solid, sustainable and structural alternative to the existing financial system. This year's conference was organized by Istanbul Sabahattin Zaim University and the Islamic Development Bank Institute for Islamic Research and education (IRTI) from June 14th to June 20th.
In his speech made on Sunday, President Recep Tayyip Erdogan said Islamic finance and the means of participation banking and use of the economy would provide a robust, sustainable and structural alternative to the crisis-ridden current financial system. The President also added Istanbul's newly built financial center would also make it a pioneer in the sector, given its geostrategic advantage.
Erdogan said the current global financing system needed to be restructured and added that after the 2008 global financial crisis, it was supposed to contribute to sustainable economic activity as well as to increase prosperity, but the result had been the opposite, noting that such crises had spread to all economies and the real sector, creating huge armies of unemployed people".
It is a known fact that Turkey has taken very important steps in the last 18 years to integrate participation-based alternative models with participating financial institutions, especially with recent initiatives by government lenders. In fact it has also been reported by Fitch Ratings that growth in Turkish participation banking has surpassed that of traditional banks in recent years despite rising market volatility.
Regarding the issue the President also said the global system, based on personal and financial interests, dominance and injustice, needed to be reshaped and replaced with a fairer one.
Referring to the fact that the share of participation banks in sector assets was 6.3% at the end of 2019, compared to the government's target of 15% for 2025 (which was less than 2% in the early 2000s), Erdogan stressed the importance of an interest-free, participatory and therefore alternative financial system and said "Taking all these into account, Islamic finance is our exit from this system".
