Syndicate content

Add new comment

Dear Peter,

I apologize for the delayed response. There are two issues at hand here. First is the theoretical discussion on Islamic finance and its potentials to increase financial inclusion and shared prosperity in predominantly Muslim countries. Second is the conditions in the OIC countries and practical issues related to the implementation of Islamic finance. In regards to the first, there are many works pointing to the potentials of Islamic finance in boosting financial stability and inclusive growth and reducing poverty. In regards to the second issue, you are correct that most of the OIC countries are suffering from corruption and poverty levels that are often higher in comparison to other parts of the world. But, as you know that has nothing to do with the socio-economic teachings of Islam (including Islamic finance) and in fact they are in clear contradiction with them. This space is not the appropriate venue to delve into these often politically charged discussions and I would be more than happy to engage in such discussions privately. 

However, at the end of the day, the solid fact remains that more than 50 million adults in OIC countries are avoiding conventional financial institutions because of religious reasons and most of these people are residing in poorer OIC countries. OIC countries can either ignore this gap or try to address it by providing Shari’ah compliant financial services for this population. It seems to me that the latter option is more preferable IF it could be done in a genuine, responsible and efficient manner. I agree that this is a big “IF” and the practical details are extremely important, but at the same time one should not throw the baby out with the bath water. If the theory of Islamic Finance is offering promises for boosting inclusive growth and reducing poverty, I think we should focus our energy on how to actually materialize that promise in the field in the best possible manner rather than disqualifying it because of current unfortunate conditions in most of the OIC countries.