World Islamic Economic Forum provides a platform but results would depend on rulers to translate words into deeds

SHABBIR H. KAZMI, Special Correspondent
Nov 20 - 26, 2006

The second World Islamic Economic Forum (WIEF) was recently held at Islamabad. Pakistan as a host managed to attract a large number of dignitaries as well delegates from Muslim Ummah. Many proposals were tabled and various pledges were made to integrate Ummah into a united economic power. However, it remains to be seen how each stakeholder behaves in the days to come.

It is an irony that Ummah is divided into Arabi and Ajami. It is also divided into extraordinarily rich and extremely poor countries. Most of the Muslims proclaim to be the true followers of Shariah but are not proving this by their acts. They love to accumulate wealth but do not seem to be ready to discharge their Shariah responsibilities as specified in Quaraan and Hidah simply because of conflict of interest. People often chant 'Death on US' slogans but are never ready to give up their love for 'Made is USA' products.

It is often said that the World Trade Organization (WTO) is the biggest threat for the developing countries as its articles are tilted towards protecting the interest of developed countries and facilitating MNCs/TNCs in expanding their market share. However, developing countries are perfectly ignorant of the fact WTO does not stop them from forming regional blocs and PTAs and FTAs. The largest and the most comprehensive economic bloc of present time is European Union. It includes Germany, which was previously divided into two sovereign countries working under two different and completely opposite economic systems. It has countries, which were the worst enemies in the past. It has a common currency, despite all the countries having their own national currencies. The EU has been constantly expanding and very shortly will include Turkey, may be the only Muslim country to become a member of EU.

As against this the Organization of Islamic Conference (OIC), despite being more than three decades old, has not succeeded in forming a unified voice against the miseries inflicted on Muslims throughout the world, be it Iraq or Palestine in the Middle East or Afghanistan and Iran in Asia. This is the key reason Muslims have not been able to take a united stand is their fragile economies. Some of the Muslim countries may be among the largest producers of crude oil but are dependent on non-Muslim countries for their food needs as well as luxuries. They can buy the same products from another Muslim country but are either ignorant or arrogant. Most of the time they are ignorant what other Muslim countries are producing and/or do not wish to buy the products because they do not carry a European or US brand name.

People from oil rich countries have billions of dollars, which they wish to invest. However, they often do not wish to invest their money in another Muslim country or the countries soliciting foreign direct investment do not have proper infrastructure and regulatory framework. Some times investors also complain that the size of listed companies as well as the size of market is often so small that an inflow/outflow of a million dollars cast extreme impact on the market.

It is regrettable that since its establishment the Islamic Chamber of Commerce and Industry (ICC&I) has been working hard for expanding trade among the Muslim countries as well as formation of joint ventures. The success has not been worth mentioning keeping in view the enormous potential. It has also tabled the idea of formation of Islamic Common Market. To achieve the ultimate objective first PTAs and then FTAs have to be signed and implemented to enhance trade among the Muslim countries. Similarly, Investment protocols have to be signed for facilitating and protecting foreign direct investment and encouraging cross border listing. Appropriate amendments have to be made in foreign exchange regime for the smooth inflow/outflow of foreign exchange, both capital and dividend.

It is often complained that due to geographical location agricultural products and manufactured goods are similar, if not identical. This leads to competition rather than complementing each other's economies. It may be true but the fact is that there are also ample opportunities to complement and supplement each other. However, the local entrepreneurs have to produce goods and services according to international standards and at competitive rates.






Saudi Arabia












United Arab Emirates




















World total


Let us take Pakistan as a test case. Investment from Muslim countries in the past came from Saudi Arabia, United Arab Emirates, Kuwait and Libya. Initially, the funds came for the establishment of DFIs/investment companies, which in turn provided equity and credit to a variety of businesses. These included fertilizer manufacturing, oil refining, banking, leasing and mutual funds. Some of the recent inflows have been from the UAE in banking and telecommunication.

While Pakistan has witnessed huge investment from the Middle East in telecom sector, it is regrettable that portfolio investment, including special convertible rupee accounts (SCRAs) from UK, USA and Singapore, remains the highest. One may say that some investment in the SCRAs may have originated from the Middle East but it is difficult to quantify the amount and the country of origin. Similarly, if one looks at the quantum of Pakistan's international trade, bulk of the trade pertains to the US, EU and Japan. Trade with Muslim countries has remained low except for the petroleum products.

It is known to all that Pakistan faces acute energy shortage, including natural gas. However, Iran-Pakistan-India gas pipeline project has remained a victim of US policy and pressure. Both, India and Pakistan need gas but are not able to pursue the project because of US-Iran conflict. India has been promised nuclear technology for civilian use by the US but Pakistan is not offered similar deal. Pakistan is being told to opt Turkmenistan-Afghanistan-Pakistan project, which may take decades to become a reality because of war-like situation in Afghanistan.

One may say that Pakistan was not the perfect example to be quoted to highlight the impediments faced by Muslim countries. However, it is a market of over 160 million people, having adequate (some may say even superior) manufacturing infrastructure, ports and financial system. It has been the most vocal member of the OIC and the strongest propagator of Muslim common market. If it has been able to make a mark, little could be expected from countries suffering from famine, civil wars and gross human rights violation. The governments of Afghanistan and Iraq have been toppled in the name of restoration of democracy and change of regime. A part of Indonesia has been axed and Sudan may be the next victim. There are talks about imposing economic sanctions on Iran.

The 2nd World Islamic Economic Form (WIEF) attracted over 300 delegates from 57 Muslim countries to tackle economic reforms in the Islamic countries with the industrialized world. The forum focused on forging joint efforts to unleash the emerging potential markets and business beyond borders. The conference was organized by the WIEF Foundation and co-organized by the Asian Strategy and Leadership Institute in association with the Islamic Chamber of Commerce and Industry and Islamic Center for Development of Trade. A major objective of the WIEF forum is to provide a platform for the positive and healthy interaction between government leaders, civil society and business players for the benefit of the Muslim community throughout the world.