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OIC countries have an abundance of capital, a large pool of underutilized
Islamic Funds that is running into hundreds of billions of dollars, which is
searching for alternates to the traditional markets of the West but they must
reform their economies to leverage these resources. Dr. Abdul Hafeez Shaikh
Federal Minister for Investment & Privatisation stated this while giving his
keynote address 'Amplifying the Network: A Strategy for Economic Cooperation
Among OIC Countries' to the OIC Economic Conference being held at Istanbul
opened by Turkish Prime Minister Mr. Rajjab Tayyab Ardoghan on the occasion of
the 20th anniversary of the OIC Standing Committee on Economic and Commercial
Cooperation (COMCEC) says a message received here from Turkey.
Dr. Hafeez Shaikh added that Laws needed to be fair, simple, transparent with
minimize discretion and a system of judiciary and regulations that was
predictable. When OIC member countries managed such policy regimes, they were
able to attract the investment. In Malaysia, for example, even at some
countries in West or Jordan and even at our own case, Pakistan, our recent
experience, it has been positive, he maintained.
In all the OIC countries all the States monopolies were still state monopolies
while the world has moved on and they had managed to inject private sector
into the management of commercial groups, we need to get the policy regimes
right and we need to bring the private sector into the picture, he stated.
Dr. Shaikh pointed out the factors that would allow to promote intra-OIC
investment were the same as for the promotion of investment in general. You
cannot focus exclusively on some thing called promoting intra-OIC investment.
If you focus on promoting investment, only then intra-OIC investment would
come, he assured the delegates.
Dr. Shaikh proposed a Joint Investment Promotion Team, which should be
established to develop these ideas including teams from Private Sector
Businessmen and Thought Leaders of the OIC member countries. He also proposed
Economic Convergence Initiative, Islamic Direct Investment Acceleration Scheme
(IDIAS), Communication and Knowledge Sharing Initiative stock market
integration and Joint Investment Fund of OIC member States. He also proposed
that as a preliminary list financial services, energy, agri-business and
information and communications technology be the economic clusters which OIC
as a group show focus on within these clusters and suggested to develop these
ideas further.
The Minister said that OIC had the cultural and ideological cohesion to be a
strong economic network, but to achieve this OIC must close the Target -
Implementation Gap" but the Muslims were interacting with each other outside
their countries, becoming a source of knowledge and sharing of experiences and
generation of ideas. OIC as an economic group had about 1/6 of the world
population. It is rich in resources. Yet, in spite of this abundance of
resources, the group as a whole has not lived up with its potentials. OIC GDP
is only less than 5% of world GDP, which is not growing. In fact, the share of
Muslim countries in World GDP is going down. This GDP is unevenly distributed
across the group. If you take away the six top countries then the rest of 51
countries combined have less than 50% of overall GDP or less than 2.5% of
world GDP. There is a huge gap between the poorest Niger and the richest Qatar
of 1 to 186 times and unfortunately out of the 49 least developed countries,
22 are within this OIC economic network. Our share in world trade is less than
8% and even this is an achievement because historically it ranges to about
6.4% if you take an average. If you turn to trade within OIC countries, the
picture is even bleaker. Of all the trade that we do with all the countries,
our trade with OIC is about 10 to 13%. It shows that the OIC as a network is
not working, he added.
He further stated that all the funds were going to developing countries in
investment, the OIC countries only manage 10%, the share in world FDI was even
less at only 1.5% and unfortunately this number was also not growing and
roughly constant over the last ten years. The main reason was weak networking
capacity of this group. As regard to human development side, OIC as a group
did poorly in term of human development index of UNDP and the literacy numbers
indicated that all the universities in the OIC group were less than in one
country, Japan alone.
Dr. Hafeez gave an over view of Pakistan's economy and highlighted the
economic initiatives taken under the leadership of President General Pervez
Musharraf. Several following speakers including Turkish Commerce Minister Mr.
Tuzmen commented on Dr. Shaikh's proposals and lauded his vision for the
promotion of economic interaction among OIC States.