Saudi Stock Exchange Fayez Nureldine/Getty Images

Leveraging Islamic Finance for Sustainable Development

The Middle East’s oil wealth has failed to be translated into broad-based economic development. But the capital that has accumulated in the region’s financial systems could yet play an important role in developing the Muslim world – if Islamic finance is used to its full potential.

WASHINGTON, DC – Roughly one-third of those suffering from extreme poverty worldwide live in member states of the Organization of Islamic Cooperation (OIC). In 21 of those 57 countries, fewer than half of the population has access to adequate sanitation. Four percent of infants born in these countries die before they reach the age of five.

Simply put, despite great potential, many OIC countries have struggled to achieve broad-based development. For many countries, the infamous “resource curse” is at work; in others, weak leadership and failed institutions are to blame. It does not help that the vast majority (some 71%) of the 125 million people affected by conflicts and natural disasters reside in OIC countries. Instability places enormous strain on national budgets.

But these countries have options. In particular, the capital that has accumulated in some of the OIC countries’ financial systems could play an important role in helping them to meet their development goals – especially if Islamic finance is used to its full potential.

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