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Treasury and Finance Minister Mehmet Simsek on Thursday called for a bigger role for Islamic finance in Türkiye's economy, arguing that countries need stronger buffers and greater resilience as global shocks become more frequent.
"We live in a world that is vulnerable to shocks. Therefore, we need to invest in resilience and build strong buffers. This makes it necessary to place greater emphasis on Islamic finance products," Simsek told participants at the 3rd Global Islamic Economy Summit in Istanbul.
The minister said Türkiye still has significant room to expand its Islamic finance sector, noting that the country ranks ninth globally by market size but aims to move into the top five. Türkiye's Islamic finance assets reached $127 billion in 2024, while total global Islamic finance assets stood at nearly $6 trillion, according to the Islamic Finance Development Report 2025.
Addressing the summit, Simsek stressed that capital remains indispensable for development, but recent increases in global foreign direct investment have largely flowed through financial centers rather than into productive economic activity.
Investment directed toward projects that support productivity and production has declined, he noted, while developing economies with large Muslim populations have seen their share of global foreign direct investment fall from 67% to 54% over the past three years.
According to Simsek, the trend reflects a broader structural shift rather than a temporary change, with capital increasingly concentrated in Western economies amid growing geo-economic fragmentation. He also pointed to rising investment in data centers and artificial intelligence, sectors that continue to attract large volumes of capital, primarily in advanced economies.
"This creates important challenges for developing countries and Muslim nations," he said, adding that both Türkiye and the wider Islamic world need Islamic finance more than ever.
Simsek argued that Islamic finance remains underutilized in many countries, including Türkiye, and outlined several areas where the sector can grow.
"We need a more diversified product range to attract more investors. To compete with conventional finance, we must offer more products," he said. "This requires our institutions to become more innovative."
Simsek added that increasing liquidity in the system remains a priority and noted that the central bank is working on measures in that area.
The minister also reiterated Türkiye's ambition to strengthen the position of the Istanbul Financial Center (IFC) within the global Islamic finance ecosystem. "We aim to move the Istanbul Financial Center into a much stronger and more influential position in the global Islamic finance ecosystem," he said.
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