Assoc. Prof. Dr. Caner Özdurak: Being a financial center and an Islamic financial center are contradictory

The Istanbul Financial Center has returned to the agenda with a 'hardship' allowance for BRSA members. Assoc. Prof. Dr. Özdurak said, "The Istanbul Financial Center, which started with the dream of making Istanbul a financial hub but remained merely a construction project, has now come to the agenda with a 'hardship allowance.' The clause included in the omnibus bill once again showed that the Istanbul Financial Center project was primarily built as a construction project from the very beginning, and a strategic cover was attempted to be sewn onto it afterward.

A 'SPECIAL' CLASS WILL BE CREATED

The motion added to the 86-article omnibus bill during the committee discussions became a subject of debate. It was envisioned that additional monthly compensation would be paid to the chairman, members, deputy chairmen, chief advisors, department heads, experts, and titled professional staff working at the BRSA. The motion stated that the additional compensation would not exceed the amount found by multiplying the 60,000 indicator figure by the civil servant monthly coefficient each month. Accordingly, considering the civil servant salary coefficient, the payment of additional compensation of up to 35,000 liras for 2023 and 45,000 liras in 2024 will come to the agenda.

BROAD AUTHORITY FOR ERDOĞAN

The article added to the law also provided broad powers to AKP President Erdoğan. The article grants Erdoğan the "authority to determine the amount of additional compensation, to differentiate the indicator figure according to title and place of duty when necessary, and to determine the payment procedures and principles."

AKP President Erdoğan noted that the Istanbul Financial Center is a candidate to be one of the centers for the participation finance and fintech sectors. Speaking at the Opening Program of the 39th Ministerial Session of the Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation held in Istanbul, Erdoğan said the following regarding the Istanbul Financial Center: "We have encouraged the development of halal and innovative product alternatives such as gold exchanges and international investment funds among countries. Unfortunately, we have not yet achieved the picture we desire in the field of finance. However, the center of gravity of global finance is shifting from the West to the East. We wish for our organization and you, our friends, to benefit from this center, which has high strategic importance."

CONTRADICTORY EXPECTATIONS

However, expectations regarding the center create a contradiction. Assoc. Prof. Dr. Caner Özdurak explained the contradiction between being a financial center and an Islamic financial center as follows:

"First of all, when it is said that one should enter the top ten financial centers and be an Islamic financial center, there is an inconsistency. Two indices can be looked at for this. One of them is the Global Financial Centres Index (GFCI), which considers more than 100 factors. The other is the Reuters Islamic Finance Index. The factors used in the calculation of the GFCI include financial markets, financial institutions, financial infrastructure, financial services, financial law and regulations, financial education and research, financial technology, financial competitiveness, and financial accessibility. The Reuters Islamic Finance Index is also an index created by Reuters that represents the Islamic finance sector. The financial instruments that make up the index are traded in Islamic financial institutions that operate in accordance with Sharia provisions. The performance of the Reuters Islamic Finance Index generally reflects the performance of the Islamic finance sector. It is obvious that the countries that rank high in these two indices are not compatible with each other. The new goal was announced as entering the top ten in this index, and there are discrepancies between the factors considered in this index and participation (Islamic) finance. Since the project, which has a history of almost 20 years, did not develop on a well-founded macro strategy, it is told from time to time with different goals and stories by different public administrators."

According to the GFCI announced in September, Istanbul fell 20 places in the list of global financial centers, dropping to 110th place among 121 centers. Istanbul's score in 110th place is 603. In March, Istanbul was in 90th place with 601 points. Although Istanbul's score increased very slightly, it fell significantly in the rankings due to the progress in other cities. Entering the top ten financial centers and being an Islamic financial center are contradictory," he said.

News Source: 12punto