Turkey’s President Recep Tayyip Erdogan on April 17 opened a half-vacant $3.4bn financial centre in Istanbul in an attempt at showing off an accomplished mega project as part of his election campaign.
Erdogan attempted to talk up the prospect of a “new financial ecosystem” for economic crisis-hit Turkey, but his hyperbole went down like a lead balloon with many expert observers.
“Istanbul Financial Center [IFC] will create a new ecosystem by linking three continents. It will increase the country's potential to attract investment by facilitating international capital flows,” Turkey’s leader of two decades—campaigning ahead of the country’s scheduled May 14 parliamentary and presidential elections—told an audience of ministers, bureaucrats and the public.
Al-Monitor reported that for many critics the opening served as a sad reminder that Western investors have long fled Turkey’s big emerging market. “This is an old dream that is devoid of reality,” Erdal Saglam, a veteran economics columnist, said on independent TV chain KRT. “Turkey, thanks to Erdogan’s economic policies, is far from becoming a financial centre. This huge complex, at an earthquake zone, is an empty dream — figuratively and literally.”
Saglam observed that Istanbul has dropped 10 places on the 2023 Global Finance Center Index compared to 2022. The index scores the competitiveness of financial centres based on assessments drawn from an online questionnaire and more than 100 indices from organisations such as the World Bank, the Organization for Economic Co-operation and Development (OECD) and the Economist Intelligence Unit. The centres are ranked on infrastructure, technology, financial development, reputation, connectivity, corruption and regulatory enforcement, among other factors.
The longstanding woes of Turkey’s economy under Erdogan’s management—or “mismanagement” as the opposition are wont to term it—are illustrated by facts such as how in the last five years, the Turkish lira has lost 80% of its value against the dollar.
But Erdogan is not having any of it. “People say there is an economic crisis—there is none,” Erdogan also remarked at the IFC opening. His administration, he claimed, has “made Turkey an international player in global finance.” Not enough foreign investor tenants of the IFC were present, unfortunately, to back him up.
There’s something of a campaigning pattern developing when it comes to the string of “mega” successes unveiled by Erdogan on the campaign trail. The strongman blows his own trumpet, his critics blow raspberries.
On April 20, Erdogan will declare the start of Turkish natural gas production from the Black Sea. National oil company Turkish Petroleum Corporation (TPAO) has made some lavish claims about the potential of the field to transform the fortunes of huge energy importer Turkey. Expect observers to question TPAO’s unverified assessment of just how much gas it contains and remind onlookers that TPAO has no experience in developing an ultra-deepwater gas field.
Lately, Erdogan was praising Turkey’s up and coming so-called stealth fighter jet to the skies. Experts were quick to remind the potentially gullible that it still has no viable engine for the ‘fifth generation’ class. Not to mention that just over the Aegean Sea the Greek air force is moving towards acquiring F-16s and stealth F-35s from the US that, thanks to Erdogan’s series of rows with Washington, the US Congress is refusing to provide to Turkey.
Also on the horizon, is the inauguration of the first phase of Turkey’s first nuclear power plant, built by Russia’s Rosatom. Erdogan has suggested Vladimir Putin might even turn up for the big day. Any media allowed near the event won’t bet on Erdogan and his elusive guest taking any searching questions on just how much of the facility is actually complete.