Erdogan Wants to Set Up an Islamic “Wall Street” in Turkey

Turkish President Recep Tayyip Erdogan said on Thursday that he wants to turn Istanbul into a financial hub for the Islamic world — at a time when the country’s economy is in serious trouble.

“We are seeking to become one of the important centers in the world with the Istanbul Financial Center. We want this project to become a center for Islamic finance as well,” he said in a video message to an economic event called the Regional Finance Conference held in Istanbul.

The Istanbul Financial Center, a project expected to be launched by early 2022, aims to become a major business district serving many banks, autonomous public institutions, and multi-national companies as well as their related back offices and service firms.

The development area consists of 723,00 square meters of office space, retail, residential buildings, hotel, a conference center for 2,000 delegates, mosques, schools, car parks and other community facilities.

It will be developed by Arup, one of the largest and most active consulting engineering firms in Turkey.

Turkey, Erdogan said, has a lure for foreign investors with tax exceptions and discounts. “There are many fields in which we can cooperate, from energy to transportation, defense industry, technology, finance, and food. We expect investors to make the most of these opportunities.”

Erdogan said it is important that Turkey’s name comes to the fore for alternative destinations to the Asian-based production and supply network.

“As a government that has carried out historical reforms in every field for the last 19 years, we are determined not to let this trust in Turkey fail,” he pledged according to a report by Turkish daily Yenisafak.

Erdogan cornered by economic crisis in Turkey

The pledge by Erdogan comes at a time when Turkey’s economy is in the midst of a crisis. On Thursday, the bank slashed its policy rate to 16 from 18 percent despite rising inflation and a fast-depreciating currency.

Immediately, the national currency, the lira, lost more than 2.5 percent against the dollar after the announcement on fears that the decision could see inflation start to spiral out of control.

Erdogan has vowed to bring Turkey’s “exorbitant” prices under control as annual inflation hit 19.6 percent in September, its highest in two-and-a-half years, with food inflation near 29 percent.

The lira has shed 20 percent this year and half of the depreciation has come since early last month, when the central bank began giving dovish signals despite inflation rising to near 20 percent. Turks are converting their liras into foreign currencies and gold to try and preserve their dwindling savings as a result.

Erdogan has long called for monetary easing and his influence, including rapidly replacing the central bank’s top leadership, is seen to have eroded policy credibility in recent years.