30.05.2025 16:14
Speaking at the World Islamic Economy Summit, Minister of Treasury and Finance Mehmet Şimşek stated, "Islamic finance can actually provide us with a very useful instrument and a beneficial pathway when we consider the challenges we face today."
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Speaking at the World Islamic Economy Summit, Minister of Treasury and Finance Mehmet Şimşek said, "Islamic finance can actually provide us with a very useful instrument and a beneficial route when we consider the challenges we face today. Our main message is this: for prosperity to be shared equally."
The second Istanbul World Islamic Economy Summit, organized by the AlBaraka Islamic Economy Forum as part of the 'Turkey AlBaraka Summits', started today. The summit, which will continue until June 1, is being held at the Istanbul Financial Center, hosted by Halkbank, under the theme 'Islamic Economic Strategies Towards an Effective Global Economy'. The summit, brought to life in strategic partnership with the Presidency of the Republic of Turkey Investment and Finance Office, Turkey Wealth Fund (TVF), Islamic Cooperation Youth Forum (ICYF), Ibn Khaldun University, Istanbul Financial Center (IFM), and AlBaraka Group, was attended by Minister of Treasury and Finance Mehmet Şimşek, who stated, "Today, of course, we will talk about Islamic finance; however, I believe we should start by discussing the global environment we are in, keeping the big picture in mind. Political uncertainty has never been this high. I am not just talking about trade policies, where uncertainty is indeed at its peak. I think the world is trying to navigate against serious winds. This may sound quite negative, but actually, every challenge, if you are well-positioned, can offer opportunities if you understand and can intervene. That is why I want to start by talking about some global challenges today, how they affect Islamic finance, and how we can address these vulnerabilities."
"THERE IS A GEOSTRATEGIC COMPETITION BETWEEN THE US AND CHINA" Şimşek stated, "The world is currently experiencing a 'VUCA' moment. VUCA is an acronym used by the US military and represents four concepts: Volatility, Uncertainty, Complexity, and Ambiguity. We have been going through this VUCA moment for a while, and as I said, it is not limited to trade policies. The answer is quite simple: there is a geostrategic competition between the US and China, which leads to serious disruptions and fragmentation in trade. This is an important issue in itself because historically, trade has been one of the engines of growth, but it is currently stumbling significantly. It is no longer functioning as it used to. Additionally, the world is facing high levels of debt. We know that high leverage ratios are often associated with macro-financial instability. Of course, we are on the brink of an artificial intelligence revolution. Whether we are talking about general artificial intelligence or super artificial intelligence, it is now visible on the horizon. This means tremendous potential in terms of productivity. However, the fact that not everyone will have equal access to these technologies means a distortion of equal opportunities on a global scale and an increase in inequalities. Inequalities could also be a major source of tensions in the future," he said.
"WORKING ON THE BASIS OF EQUAL PARTICIPATION" Minister Şimşek said, "The climate crisis is another major issue. Moreover, there are still ongoing hot conflicts, geopolitical tensions, and wars. In short, the world is facing serious challenges, and the methods of some major actors in dealing with these issues are not helping. So, how can Islamic finance offer a way out at this point? I think this is the main question we need to discuss. Because growth will become a scarce resource. Growth has already significantly decreased compared to the levels before the 2008-2009 global financial crisis. We see that growth will be below 3%, and within the global movements we are discussing, this could be even more challenging. So, what path can we follow to provide shared growth and wealth? Islamic finance can be a source of hope because when we share risk, and when financing is also asset-based, we can provide better security. As we see, financial instability continues, and unity is found at the core of Islamic finance because it works on the basis of equal participation, and as I said, inclusivity is one of the main themes of Islam. Social inclusivity, financial inclusivity should be equal for everyone. Therefore, when we consider the challenges we face today, Islamic finance can actually provide us with a very useful instrument and a beneficial route for the equal sharing of prosperity. Our main message is this."
"WE NEED TO INVEST FOR THE GROWTH OF THIS STRUCTURE" Minister Şimşek stated, "When we look at Islamic finance, we see very rapid growth, especially in terms of value and market share; but we need to be aware that the market share is just above 1%. When we look at global financial values, we have only reached about 1%. So, if we think that this is the best route for the continuation of the world, it is currently at such a small rate that we cannot focus entirely on it. However, we need to invest for the growth of this structure. To achieve this, we need to understand what is holding us back," he said.
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