Delegates to the Organisation of Islamic Conference summit in Putrajaya, Malaysia have been urged to invest in other Islamic nations for mutual long-term gain instead of seeking short-term profits in other markets.
Officials and analysts have said the West has been suspicious of Islamic funds in the wake of the September 11 attacks in the US.
But, they have warned, divisions and suspicions between Islamic states continue to stand in the way of thriving trade.
“The current international situation, including the new dangers for Islamic capital deposited in the West, require us to reconsider our investment policies,” the secretary general of the OIC, Abd al-Wahid Belkeziz, told a business forum before a two-day summit starting on Thursday.
He said Islamic institutional investors should examine the investment opportunities available in the Islamic world, and urged “government help” within the Islamic world.
Muslim capital and oil revenue have been under mounting suspicion in the West since 9/11 and rules governing the transfer of funds have been tightened to curb the financing of “terrorist” groups.
The attacks have tarnished the image of the Muslim world in the West, affecting its companies and investors.
Long term interests
The director of the Oxford Center for Islamic Studies, Farhan Ahmad Nizami, told Muslim investors that “short-term profits lie in the speculative markets of the West or, very soon, in China, but the long-term interests of the Islamic world is to trust and invest in each other.”
Business people at the conference agreed on the principle of boosting inter-Muslim trade, but pointed out that politics stood in the way, with many Muslim states locked in border and ideological disputes.
“They (the governments) have been inviting investors in the Muslim countries to invest in other Muslim countries, but there are many problems linked to visas and custom duties,” said Aqeel al-Jasim, secretary general of the Islamic Chamber of Commerce and Industry, a Pakistan-based affiliate of the OIC.
“We hope that the governments will listen to the point of view of the businessmen to remove these barriers and not to let political problems override economics”
“We hope that the governments will listen to the point of view of the businessmen to remove these barriers and not to let political problems override economics.”
He said political disputes between Muslim states, often neighbours, translated into lengthy delays for granting visas to business people and barriers on the flow of goods and services.
“Getting visas sometimes takes months and even years,” he added.
According to International Monetary Fund statistics, exports within Islamic states stand at about 54 billion dollars a year, accounting for only 11% of the value of their combined total exports.
In contrast, the total population of the 57-member OIC stands at 1.3 billion, about one-fifth of the world’s population.
Al-Jasim pointed out that half the wealth generated in Islamic states was derived from primary products rather than manufacturing.
“Worse, is the fact that large portions of wealth generated in the Islamic world does not get invested where it belongs,” he said.
Majid Khan, chairman of Kuala Lumpur-based commodities trading house, Jawala Corp, said a “change in mindset” was also needed to boost inter-Islamic trade.
Middle Eastern states should “look east to Malaysia and Asia because our production is as good or better than the West, at better market price and we manufacture everything except rockets – from electronics to cars,” he said.