Erdogan calls for new economic paradigm to prevent crises

President Recep Tayyip Erdogan said on Friday that financial crises cannot be prevented without shifting to an economic paradigm centered on justice, morality, and production, calling for a fairer global system beyond a single dominant model.

Call for 'fairer world' order

Speaking at the 3rd Global Islamic Economy Summit in Istanbul, Erdogan emphasized that Türkiye's long-standing call for a more equitable international order applies equally to economic relations. "When we say 'a fairer world is possible,' we mean humanity is not condemned to a single system in economy, international relations," he said, noting that the global environment faces mounting challenges from war and fraternal strife.

He stressed that the climate of trust and stability in Türkiye's region is being increasingly damaged by uncertainty, underscoring the need for alternative approaches that prioritize morality and fair sharing over speculative practices.

Participation finance expansion

Erdogan highlighted participation finance as a viable alternative, stating it offers a "fairer, safer model not only for Muslims, but for the whole world." He noted that participation finance instruments have gained significant ground in Türkiye's financial system, with the market value of companies in the participation index reaching 36% of Borsa Istanbul's total in the first quarter of 2026.

A comprehensive legal regulation that entered into force on Thursday launched a competitive incentive program aimed at increasing the country's attractiveness for investors, he added, linking these reforms to the broader goal of constructing a new global financial architecture.

State-backed banking consolidation

The president announced plans to publicly offer Emlak Participation Bank and merge Ziraat Participation, Vakif Participation, and Halk Participation banks to create a stronger state-backed entity. He added that Fintech and participation finance serve as the two pillars of the Istanbul Financial Center, with preparations underway for a Participation Finance Strategy Document covering the 2027-2030 period to position Türkiye as a hub where investment, production, and financial instruments converge.