Can Istanbul be a financial center? – DW – 30.04.2022

The Istanbul Financial Center project, which was first announced by the AKP government in 2007, is set to go into operation from June. All financial sector regulatory agencies in Ankara will start moving to Istanbul Financial Center in Istanbul Ataşehir in the coming days. With the center fully operational, a new wave of immigration of around 100,000 people is expected in Istanbul.

The government claims that Istanbul’s financial center will provide $250 billion in revenue to the Turkish economy in 10 years. However, according to financial experts who spoke with DW Haber, Istanbul is unlikely to become a global financial system with its current economic policies and legal system. Urban planners, on the other hand, claim that the new wave of immigration that will occur with the financial center of Istanbul will aggravate the urban problems in Istanbul.

Migration from Ankara has started

The Istanbul Financial Center (IFC), which has been under construction for almost 10 years in Istanbul Ataşehir, is scheduled to open from June 2022. For this reason, financial market regulators and tens of thousands of employees of the capital Ankara move from Ankara to Istanbul.

The offices of the Central Bank of the Republic of Turkey (TCMB), Banking Regulation and Supervision Agency (BDDK), Capital Markets Board (SPK), Borsa Istanbul, Ziraat Bank, Halkbank, Vakıfbank, Turkey Insurance and İŞ GYO will be located in IFC. The center will also be a gigantic living space with 1.4 million square meters of offices, a shopping center of 100 thousand square meters, a 5-star hotel of 30 thousand square meters, a conference center for 2100 people and a parking lot. a capacity of 26,000 vehicles. The center will welcome 75,000 employees and visitors daily.​ ​​ ​

Will Istanbul be able to achieve its goal of becoming a global financial center with the realization of the said project?

“The biggest problem is the justice system”

Speaking to DW Turkish, Professor of Business Management Department of Istanbul Technical University (ITU) Prof. Dr. According to Öner Günçavdı, the regression that Turkey has experienced over the past 10 years in areas such as economic policies, the rule of law and the independence of the judiciary is the biggest obstacle for Istanbul to become a global financial center.

Stating that the basic requirement for being a reputable financial center like New York and London is democratic practices and universal legal service in that country, Prof. Günçavdı says: “When the IFC was first announced, the Turkish government stood for values ​​such as universal human rights and the rule of law. But after 10 years, we are no longer there. .”

Stressing that the perception of Turkey in the world on issues such as democracy, human rights and freedoms is seriously deteriorated at the moment, Günçavdı said: “If you establish such a financial center in a style of management as oppressive, in such a regime where all decisions are made by one man, this center will be in the region. It will be a center where unregistered money is laundered, to say the least.

“The law is not predictable in Turkey”

In terms of many institutions providing advisory services to investors globally, Turkey’s “legal system” is at the center of concerns regarding Istanbul’s financial hub.

Istanbul Financial Center ProjectPhoto: Istanbul Financial Center

Providing advisory services to investors in the global stock market, commodity and foreign exchange markets, STRFS (Stratejistanbul Financial Solutions) chief strategist, Dr. Atahan Çelebi told DW Turkish: “Legal infrastructure does not should not only be seen as the regulation of the financial market, but also as the operation of general law. Unfortunately, Turkey’s scorecard has not been very good in this regard in recent years. The independence of general law , international financier Full compliance with the terms of the law, look, I’m not saying compliance here, it has to be full compliance,” he says.

STRFS Chief Strategist Dr. Atahan Celebi
STRFS Chief Strategist Dr. Atahan CelebiPhoto: private

Stressing that the main feature of global financial centers is their commitment to international law, Çelebi says Turkey is not a “predictable” country in this regard. Çelebi expresses the following views:

“You need a predictable legal framework. There can be rapid changes in the legal framework in our country. I don’t want to call them arbitrary, but decisions can be made very quickly and then steps back can be taken This has no equivalent in the financial market.”

“House prices could rise further”

Tens of thousands of employees of the Istanbul financial center will move from Ankara to Istanbul. When calculated with their families, it is expected that there will be an immigration wave of around 100,000 people. It is reported that some units started being transferred to the Central Bank and Ziraat Bank at the end of March. teacher. According to Öner Günçavdı, this influx of immigration due to the financial center of Istanbul could further increase housing sales and rental prices in the megalopolis.

teacher.  Oner Guncavdi
teacher. Oner GuncavdiPhoto: Private

Günçavdı said the main problem in Istanbul’s real estate market today is the high price of purchases and rentals. It becomes impossible for residents to buy a house,” he said.

“The traffic problem will get worse”

Another concern with the financial center project is that the massive project could pose a new threat to the city, which is threatened by heavy traffic and earthquakes. Speaking to DW Turkish, Chairman of Istanbul Branch of Istanbul Chamber of Urban Planners Assoc. Dr. Pelin Pınar Giritlioğlu states that Istanbul already hosts a population far above its capacity, so the traffic problem is increasing day by day. Stressing that under these conditions, the IFC will aggravate Istanbul’s problems, Giritlioğlu says:

Chamber of Planners Branch Chairman of Istanbul Assoc.  Dr. Pelin Pinar Giritlioglu
Chamber of Planners Branch Chairman of Istanbul Assoc. Dr. Pelin Pinar GiritliogluPhoto: Private

“Istanbul’s current load has already overdosed. It can’t handle more population, it can’t handle more traffic. Today, 99% of people in Istanbul say whatever you say to traffic. Ataşehir , almost. And you condemn the Istanbulians to live with this new district. Istanbul is no longer able to tolerate this looting, these urban pressures, these megaprojects.

It was first announced in 2007

The AKP government first announced in 2007 that public banks and financial institutions in Ankara would move to Istanbul. The opening date, first announced in 2016, was postponed to 2018, then to 2020, then to 2022. Turkey Wealth Fund bought the rights of the construction companies named in the project for TL 1.6 billion in September 2021. In the statement issued by IFC in October, it was noted that the project aims to become one of the top 10 global financial centers in the world within 10 years and generate $250 billion in revenue .

“We will establish Islamic arbitration”

Chairman of the Presidential Office of Finance Prof. Dr. Göksel Aşan also end of 2021 Anadolu AgencyIn his statement to , he said that the Gulf countries will have an important place in the IFC, a significant part of which will become operational in mid-2022. Expressing that an “Arbitration Center” will be created within the IFC, Aşan said, “We are in the process of establishing the IFC Arbitration Center. We will form the ‘Islamic Arbitration Center’ for the first time under this.”

Leave a Comment