It may not look like much now. But after $2.6 billion is plowed into a bare plot of ground in Atasehir over the next three years, the Istanbul suburb will be transformed into a sparkling ménage of high-rise buildings, a symbol of Turkey’s resumption of a position of power on the global commercial stage.
Bloomberg reported Tuesday that the plan, advanced by Prime Minister Recep Tayyip Erdogan, is an effort to create a one-square-mile “Wall Street of Istanbul” that will be known as IFC-Istanbul—the International Financial Center. Erdogan, whose Justice and Development Party was reelected last year, sees Turkey as a growing center of economic and political power that will make its presence known in the Middle East and southeastern Europe.
Environment and Urbanization Minister Erdogan Bayraktar said in the report that once IFC-Istanbul is functioning, “Istanbul will assume its historical role as a global center of commerce.” The country’s financial industry has already seen substantial growth even as its economy as a whole expanded by 8.5% in 2011.
This year alone, Mizuho Financial Group Inc. and Mitsubishi Corp. of Japan, Kuwait’s Burgan Bank SAK and OAO Sberbank of Russia all came to the city, either buying Turkish firms or opening their own offices.
They have plenty of company; such institutions as Citigroup and HSBC Holdings already have a presence in Istanbul, although currently the financial heart of the city is located in the Levent and Maslak districts.
Not to be outdone, the Istanbul Stock Exchange has also grown, expanding 26% this year and more than doubling in size since 2009. While still very small compared with New York and London, it is a respectable size, larger by just a bit than Frankfurt’s at $51 billion and almost four times the size of Dubai’s.
While everything in Istanbul isn’t perfect—some development projects have stalled—foreign investment is soaring, with direct investment 25% higher in the first two months of 2012 than it was a year ago. CEOs and senior executives seek out the Billionaire Club for nightclub entertainment and new hotels, villas and apartments are going up all over the city—with restaurants and other amenities following to satisfy demand.
“I had no idea how big Istanbul was until I was appointed here,” said Martin Spurling in the report. Spurling, chief executive of HSBC Bank in Turkey, added, “I was shocked. In terms of its location, history, culture, human potential and hospitality, Istanbul’s a great candidate to be an international finance center. We have to explain it to the world a little better.”