The 8th WIEF Roundtable took place in İstanbul in May 2014 and explored the challenges faced by Turkey in its pursuit to promote a more dynamic Islamic finance industry in the country. It also addressed key priority development areas for market players to methodically expand and deepen the Islamic finance sector's ecosystem for a more sustainable industry. The World Islamic Economic Forum (WIEF) was established in 2006 in Kuala Lumpur, Malaysia, with the objective of facilitating business amongst the Muslim world, promoting and encouraging profits that would eventually flow down to much neglected peoples.
With the overarching theme and aim of promoting cooperation in the region, the highly interactive discourse at the 8th WIEF-MÜSİAD (Independent Industrialists and Businessmen's Association) Roundtable was hosted by Ali Babacan, Deputy Prime Minister of Turkey, while WIEF Foundation Chairman and former Deputy Prime Minister of Malaysia Tun Musa Hitam and Nail Olpak, the president of MÜSIAD, were key speakers. It is indisputable that Turkey indeed has a lot of potential in the Islamic finance services industry. Promoting Islamic finance in Turkey - the world's 17th largest economy with a predominantly Muslim population of almost 80 million - is a part of the government's plans to boost commercial ties with the Gulf and diversify the country's investor base. The 8th WIEF Roundtable drew global attention to İstanbul to explore the challenges faced by Turkey in its pursuit of promoting a more dynamic Islamic finance industry in the country.
Turkey, through MÜSİAD, has been a long-standing partner of the WIEF since 2008.
The 8th WIEF Roundtable, as a follow up to previous sessions, focused on the theme Transforming Islamic Finance in Turkey: Promise of Growth. It was a unique collaborative effort to foster coalition and networking amongst diverse countries. Global leaders, industry think tanks, leading executives and top management and experts in their respective fields, convened in one location to discuss, dissect and determine new ways of overcoming these pressing issues that still besiege many countries in this region to this day.
Turkey is internationally recognized as being one of the top emerging markets, owing to its good infrastructure and abundant natural and human resources. Moreover, professional business-promoting events further serve to render Turkey a perfect hub, bridging both East and West. As the direction of world trade shifts, the situation is viewed as "a possible Ottoman economic resurgence." Being a secular, multicultural country and home to one of the dominant economies in the Organization of Islamic Cooperation (OIC), Turkey appears destined to play a leading role in the field of Islamic finance as well.
Participation banking in Turkey is a result of a 600-year history of raising capital utilizing traditional Islamic contracts, networking and subcontracting. As such, Islamic financing originated from the efforts of Muslim entrepreneurs, SMEs and traditional business networks' desire to raise capital in a closed, centralized Turkish market.
However, participation banks are growing at a much faster rate than the sector as a whole, and available data suggests that they are more efficient than their conventional banking counterparts. In 2013, participation banks reached a combined $36 billion in assets, representing a 5 percent share of total banking assets. This was a 25 percent rise from a year earlier, compared to 13 percent growth for conventional banks. A recent study estimates participation bank assets could reach between $80 billion and $120 billion by 2017 -- on track to meet a government target of 15 percent by 2023.
* Malaysia-based journalist