Islamic Capitalism in

Turkey
by Radha Palacholla and
Kassymkhan Kapparov

Religions in the World

Religion and Economics

Religion - A long-time driving force behind the

economic development.
Development of the Western economics started
from the reforms in Christianity, known as
Calvinism.
Capitalism in northern Europe evolved when the
Protestant (particularly Calvinist) influenced large
numbers of people to engage in work in:
the secular world
developing their own enterprises
engaging in trade
accumulation of wealth for investment.

Islam
Influences decision-making and behavior
patterns of over 1.2 bn people everyday.
Includes not only religion, but also
matters of law, ruling of the state and
social behavior.
Out of 35 countries with Muslim majority
Turkey is one with the most developed
market economy.

Turkey
80mn people, mostly young
Strategic location
Ataturk wanted to transform the
former Ottoman Empire into a modern,
secular and European nation-state
Economical development 2012 PPP based GDP was #17 with
$1.1trln.
2012 est. Turkey is #90 globally with
$15k GDP per capita PPP
Erdogan - PM for 10 years

Current Turkey: Protests

Turkey and the EU

Turkey seeks to join the
European Union from 1987
Growing skepticism in Europe
about the prospect of integrating
Turkey
Main concern is that Turkey is a
large Muslim country
The case of Kayseri presents one
of the strongest arguments that
Islam, capitalism and
globalization can be compatible

Kayseri: Anatolian tiger

Anatolian Tigers 6 cities with the
highest number of companies
among Turkey's 500 biggest.
Kayseri has no obvious
comparative advantage
Major industries furniture, textile,
food and electronics.

Kayseri: Islam and

Entrepreneurship

Prophet Muhammad preached that 90%

of Muslims life should be devoted to work
in order to earn a living.
Islam preaches equal opportunities in all
spheres, including business. Islamic
principles helped to improve the
profitability of businesses.
For instance, lower costs of supplies due
to diversification of the supply base based
on the principle of equal opportunities.
Globalization was another driving force
behind the success of Kayseri
Played an important role in promoting
entrepreneurship among Muslims.

Kayseri: Calvinist Islam

Calvinist Islam mix of Muslim values, hard
work and capitalism
Example that Islam, capitalism and
globalization can be compatible.
Change in the government policy from more
regulated Kemalist approach towards Islamic
Capitalism in resulted in emergence of the new
growth centers one of them being Kayseri.
For these businessmen, Islam is simply a way
of life, not a matter of political mission.

Kayseri: Challenges
Womens role is still limited under
the current model of Islamic
Capitalism. Low employment
opportunities for them.
Political risks: social unrest, riots
and a change in political regime.
Economic risks: inflation,
government debt, currency
devaluation, low attractiveness for
FDI due to political instability.
Legal risks: property rights,
corruption (ranked #54 in the
world in 2012 Corruption
Perception Index).

Q&A

Kayseri a unique case or beginning of the

trend in Islamic countries?

To what degree are Islam and Capitalism

compatible?

What is the influence of current protests on

Turkeys accession to the EU?