2ND WORLD ISLAMIC ECONOMIC FORUM

"OIC and IDB be repositioned and reinvigorated keeping in view the changing demands of the time."

SHAMIM AHMED RIZVI, Bureau Chief, Islamabad
Nov 20 - 26, 2006

The three-day conference of World Islamic Economic Forum (WIEF) concluded in Islamabad last week with the adoption of a declaration strategizing a four-point action plan for socio-economic development of Muslim countries in the globalised world.

This was the second session of WIEF with a theme "Unleasing the potentials of the emerging markets, which was inaugurated by Prime Minister Shaukat Aziz at the Convention Centre in Islamabad and attended by over 600 prominent personalities drawn from all over the world, including more than 300 representatives from 57 Islamic countries. Malaysian Prime Minister Abdullah Ahmed Badawi delivered keynote address at the inaugural session, followed by the speech of President Islamic Development Bank Dr. Ahmed Mahmood Ali. The next day's session was addressed by President General Pervez Musharraf who called for restructuring the Organization of Islamic Countries (OIC) and enhancing intra-OIC trade and investment to spur development in the Muslim countries.

The declaration, issued at the end of the three-day conference, called upon the governments of the OIC countries:

i) To create a conducive environment for business, investments and economic growth through regular dialogues, consultations and smart partnerships with the private sector,

ii) Provide an efficient framework to facilitate the movement of entrepreneurs, capital and trade flows within and between OIC countries;

iii) Promote and intensify Islamic banking, finance and insurance, and

iv) Accelerate regional and sub-regional cooperation leading to the establishment of an Islamic Free Trade Area.

The declaration said that pragmatic and action oriented programs with effective implementation mechanisms within a well-planned timeframe will open new horizons for the Muslim Ummah.

The participants of the conference from all over the world recognized:

*That sustainable economic cooperation and strong business partnership would enhance mutual respect and international understanding,

*That economic development, sustainable growth and wealth creation would promote prosperity, social justice and peace,

*That the private sector is the primary engine of growth, and

*That the World Islamic Economic Forum can contribute to the dialogue for the Muslim economic renaissance and efforts should be directed towards this mission.

As per the declaration the conference participants would continue to facilitate networking and strategic alliances with non-Muslim businessmen to forge viable business partnerships thereby helping to contribute to international understanding, dialogue and peace.

The theme of the inaugural speeches of Prime Minister Shaukat Aziz and his Malaysian counterpart Abdullah Ahmed Badawi at WIEF's second session was almost the same. It revolved around the need for Muslim renaissance and unity and called for joint efforts to remove misperceptions in the West about Islam and its followers.

The two leaders asked the international community to address the root cause of terrorism to make the world a better place to live. They shared views for revitalization of the Organization of Islamic Conference (OIC). President Islamic Development Bank Dr. Ahmed Mahmood Ali emphasized the need for joint efforts for reducing poverty, improving living conditions of the people and bringing women into the mainstream society.

Mr. Badawi said the challenge before the Muslim world is to confront the "ugly realties" of the present situation and it must restore the image of Islam and Muslims. "We must strive for a renaissance of the Islamic civilization. We must recover the hallmarks of the civilization, which is peace, prosperity and dignity and this quest for international respect and dignity must begin at home".

He said that Muslims' battlefronts were not only economic and political but there was also a crucial struggle to transform the mindsets to instill in people the correct understanding of Islam. "We must make our people realize that because of our lack of capacity, compounded by our lack of unity, Muslim nations are often left on the periphery of the global order. Although we are large in numbers, we have little influence in world affairs and (are) accorded little respect in the international community of nations".

The Malaysian Prime Minister said that Islamic countries should cooperate with each other on international economic issues, enhance unity in political matters and must be competitive and efficient producers of goods and services. He said the OIC's 57 members had less than 5 percent of the total GDP and 31 of them were classified as least developed, low-income countries.

Prime Minister Aziz said Muslim countries' eventual goal should be to create an Islamic Economic Union towards which we can begin by entering into multilateral free trade agreements as well as promoting the free flow of capital, labour, goods and services. He said: "We can also create a world class capital market to attract international capital which would enable us to finance our growth and development". His action plan proposed that OIC and IDB be repositioned and reinvigorated keeping in view the changing demands of the time.

Aziz said: "We should evolve an effective dispute resolution mechanism to resolve our issues and problems and put in place a sound framework for mutual cooperation."

To achieve the Muslim economic renaissance, the premier stressed the need to promote unity and broaden economic relations. Aziz said with a growing population and depleting resources in the world, such intra-Islamic cooperation is becoming increasingly important for ensuring energy, water and food security. He also proposed that maximum focus be laid on education to catch up the field of science and technology. He said that skill development through vocational training should receive a high priority to equip our workforce with capabilities, which are in demand in national and international markets. "We must evolve a comprehensive growth model to provide a strategy for balanced development. Moreover, we should provide for sharing financial and commodity surpluses through institutional mechanisms driven by public-private partnerships," he added

"The less endowed countries amongst us should develop absorptive capacity to make optimal use of scarce domestic capital and to benefit from cross-border flows. Depending upon our individual comparative and competitive advantage, we should try to specialize and carve out niches for ourselves in vital economic sectors such as energy, telecom, IT, banking, mining, agriculture, services and so on. We can thus create complementarities and by sharing best practices help each other to help ourselves."

He said the Muslim world is rich in human capital as well as physical resources and has immense potential for growth, progress and prosperity. "We constitute on fifth of humanity and our people are intelligent, industrious and enterprising. Nature has blessed us with vast natural resources, which include 70% of the world's hydrocarbon reserves. The Muslim world is spread over a vast geographical expanse extending from Morocco to Indonesia and has a rich diversity of races, languages, cultures and people. Counter-pointing the richness and diversity of our resource base is an economic performance, which is not commensurate with our true potential. There is no doubt that some of the Muslim countries have made impressive progress. However, a vast majority of Muslims live in poverty and backwardness. Nearly 39% of the world's Muslim population lives below the poverty line. We make up 19% of the world's population but only 6% of its income. Our share in global trade is barely 7-8%, while only 13% of our total trade is amongst ourselves. No Muslim nation is among the group of developed industrialized countries," added

Speaking at the panel discussion, President General Pervez Musharraf said the Muslim world could achieve successes by restructuring the Organization of Islamic Conference and emphasized for enhancing intra-OIC trade and investment to spur development in the Muslim countries.

The other members of the panel were Prime Minister Shaukat Aziz, Malaysian Prime Minister Abdullah Ahmed Badawi, besides former Sri Lankan President Chandrika Bandaranika Kamaratunga and former Australian Prime Minister Bob Hawk.

Stressing the need for forging unity in the Muslim world Pervez Musharraf said the OIC restructuring is imperative to meet today's challenges like extremism, terrorism and resolution of political disputes mainly affecting the Muslims.

President Musharraf underlined the need for setting up dedicated departments of trade, education and Islamic thought for making the epic Muslim body a vehicle of socio-economic change. He said the Muslim states must also individually develop human resource, promote science and technology and enhance trade and investment and industry for fast paced economic development.

General Pervez Musharraf reiterated his call for setting up a fund in the OIC to help the least developed Muslim states and again urged the member sates to contribute .02 percent of their GDP in the fund. He said the OIC and the Islamic Development Bank must work in synchronization for achieving socio-economic development in the Muslim states.

President Musharraf emphasized the need for creating an enabling environment in each member state according to their environments to draw investment and increase intra-OIC trade. He said without developing strong industrial base Muslim countries would never be able to transform themselves into developed nations. He stressed the need for Muslim countries to gradually transform from agrarian to industrial societies for achieving a fast paced economic uplift. President Musharraf, referring to lack of industrialization in Islamic world, pointed out that the collective GDP of all the Muslim states is less than an industrially advanced European country. He said the way forward is industrialization.

The President said extremism, as opposed to moderation, is on the rise, which spawns terrorism. Listing reasons that are spawning extremism, President Musharraf said they include lack of socio-economic development, poverty, unemployment, absence of modern education and unresolved political disputes mainly affecting the Muslims.

He listed extremism as the most important issue afflicting the Muslim states as it is spawning terrorism and called for projecting true values and real essence of Islam and the need for removing misperceptions about the great religion, which is unjustly being equated with acts of terrorism.

The President, while underscoring the need for addressing the underlying causes of extremism and terrorism, again urged the key world players including the United States and the European Union to help resolve political disputes affecting the Muslims, including Palestine and Kashmir, in a just manner. He said these unresolved disputes lie at the heart of extremism and terrorism.

FIRST WORLD ISLAMIC ECONOMIC FORUM

RECOMMENDATION:

  • The delegates called upon entrepreneurs and businessmen and businesswomen of OIC member countries and Muslim communities in non-OIC countries to establish private sector-sponsored

  • Further strengthening of networking with one another as well as to seek strategic alliances with non-Islamic businessmen to forge viable business partnerships

  • The delegates agreed to establish relevant task forces, each led by a prominent Islamic business leader, to develop specific practical implementation plans to report back to the 'International Advisory Panel' (IAP) within a reasonable time frame

  • The governments of OIC member countries to create a conducive environment for business, investments and economic growth through regular dialogues and consultations with the private sector and substantially increase the resources committed to education and development of human capital at every level including leadership development, capacity building in science, technology and vocational training.

  • For taking relevant measures to facilitate the easy movement of business people, investments and trade flows among OIC member countries and to consider the establishment of an 'Islamic Free Trade Agreement' (IFTA) through regional and sub-regional FTAs in a step by step, time-bound process that would ultimately lead to an 'Islamic Common Market

  • The Forum commended the Islamic Development Bank (IDB) for setting up the 'Islamic Trade Finance Corporation' (ITFC). They called upon the IDB to enhance its services in fund mobilization to promote further the economic and social development of Muslim communities.