Aside from the debates about the organizational structure of the new presidential governance system, which the Turkish people voted for in last year's referendum and is scheduled to take effect after the June 24 elections, discussions on the new government bodies also sway over the current political agenda in Turkey. In addition to the existing Investment Support and Promotion Agency of Turkey (ISPAT), a new financial investment agency that will work to draw financial investments to Turkey will be established in the new presidential governance system, according to sources knowledgeable in the matter.
In the same manner as ISPAT, which was established in 2006 and promotes Turkey's investment opportunities to the global business community, the new financial investment agency will seek to regulate the flow of financial investment entry into the country and develop new financial instrnuments. Moreover, the new investment organization will also expedite the process for the establishment of the Istanbul International Finance Center. Turkey deems the project of the Istanbul Financial Center essential for the country's sustainable growth trends and to achieve the 2023 vision.
Research by global institutions argue that a developed, well-functioning financial system is key to the determinant of economic growth. A look at the latest Global Financial Center Index (September, 2017) indicates that the 20 countries with the highest rankings - including London, Frankfurt, Beijing, Montreal and Zurich - are also the most developed and fastest emerging markets. Another report prepared by the Foundation of Political, Economic and Social Research (SETA) outlines that the ranking of the global financial centers confirms that the development level of high-ranking financial centers are positively reflected in the macroeconomic indicators of the countries where these centers operate.
For instance, the report specifically mentions some of the financial centers with high rankings, such as San Francisco, New York, Los Angeles and Boston, located in the U.S., the world's largest economy.
Moreover, the Shanghai, Beijing, Hong Kong financial centers operate in the world's second largest economy, China. Thus, the report shows that a global financial center poses more significance considering Turkey's economic goals.
The SETA report also emphasizes that Turkey wants to institutionalize its gains from foreign direct investment (FDI) and capital movements, which have risen considerably in the country over the last 15 years by drawing more than $180 billion of FDI. Accordingly, the report claims that the Istanbul Financial Center, which will render short-term capital flows into the long term, will have a key role in resolving structural problems in the Turkish economy. Greater financial development also promotes overall economic activity, notably in financially vulnerable sectors, the study finds, and adds that local companies can benefit from having better access to financial resources and increase their leverage by using different financial instruments.Meanwhile, according to the Cen tral Bank of Republic of Turkey (CBRT) data, the value of the equity shares by foreign residents fell by 14.4 percent and fell to $44.5 billion in April and the investment on the government debt shares also saw a 3.8 percent decrease and amounted to $29.8 billion in the same period.
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