Turkish president says financial crises cannot be prevented without shifting to new economic paradigms

Financial crises cannot be prevented unless the world shifts to an economic and financial paradigm centered on justice, morality, production, and fair sharing, Turkish President Recep Tayyip Erdogan said on Friday.

“When we say ‘a fairer world is possible,’ we mean humanity is not condemned to a single system in economy, international relations,” Erdogan said at the 3rd Global Islamic Economy Summit in Istanbul.

His remarks came as he underlined the need for alternative approaches in the global economic and financial system, saying Türkiye’s long-standing call for a more equitable international order also applies 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.

Erdogan said the global and regional environment continues to face mounting challenges, adding that the climate of trust and stability in Türkiye’s region is being increasingly damaged by war, crises, fraternal strife, and uncertainty.

He said participation finance offers a viable alternative in this environment.

“Participation finance is a fairer, safer model not only for Muslims, but for the whole world,” Erdogan said.

The president also pointed to Türkiye’s latest steps to strengthen the investment environment, saying 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 said participation finance and related capital market instruments have gained ground in Türkiye’s financial system.

In the first quarter of 2026, the market value of companies included in the participation index reached 36% of the total market value of companies traded on Borsa Istanbul, Erdogan said.

He also highlighted the role of state-backed participation finance institutions, saying Emlak Katilim had become one of the most dynamic actors in the sector.

“We aim to publicly offer Emlak Participation Bank,” Erdogan said.

He added that another planned step would be the merger of Ziraat Participation, Vakif Participation, and Halk Participation banks.

“With the combination of their strengths, the sector will gain a different momentum,” he said.

He stated that participation finance, encompassing areas such as banking, capital markets, insurance, savings finance, and social finance, as a robust framework capable of contributing to the construction of a new global financial architecture.

Emphasizing that the fact that Fintech and participation finance are the two pillars of the Istanbul Financial Center is a clear indication of the importance they attach to the development of this system.

He added: “We are also making intensive efforts to turn our country into a strong hub where investment, production, and financial instruments converge."

President Erdogan noted that the country is continuing preparations for the Participation Finance Strategy Document covering the 2027-2030 period, saying, "I find it worthwhile to state the following with great satisfaction.

"The number of institutions and the transaction volume in the participation finance sector in Türkiye continue to grow steadily."