An Islamic development bank: Will an Islamic “World Bank” be any better than the real one?

Show me the money

Can capital be invested more ethically when wielded by a Muslim hand? Muslim governments and banking institutions around the world are hoping so, with broad moves taken last week at the Organization of the Islamic Conference (OIC) to dismantle trade barriers (long term goal: a Muslim common market), create a Muslim version of an Export-Import Bank (which will help finance exports to international markets), and fund an infrastructure bond fund to handle large World Bank/IMF-style projects in Muslim countries. Sure, the annual gathering of the OIC (like most Muslim conferences) has done little better than make statements rather than affecting on-the-ground changes, but the movement for an dramatic reorganization of Muslim economies has been gaining steam for some time now. While many Muslim countries are quite wealthy, average per capita GDP is a paltry $1,300, and while Muslims are 15% of the world population, they sit on 60% of the globe’s natural resources. Lately, more leaders are looking to intra-Muslim trade (aka “south-south” trade & investment between developing countries) and infrastructure development as keys to unlocking these resources. The emergence and (partial) success of the European Union has added to the impetus for institutions such as an Islamic free trade zone and a Muslim investment bank with a proposed initial capitalization of $11 billion. While the Islamic Development Bank (IDB) has been in existance for nearly 30 years now as a wing of the OIC, until now it has been unable to finance a wider array of infrastructure projects of the type funded by its larger, non-Muslim siblings. “Let this meeting not be distinguished by mere polemic, rhetoric or empty slogans,” said Malaysian Prime Minister Datuk Seri Abdullah Ahmad Badawi, who hosted the conference. “Rather, let this meeting be evoked as an important point in the transformation of Muslim societies.” The group plans to spend $741 billion over the next 10 years to develop infrastructure in Muslim countries. What remains to be seen is whether or not the IDB will (like the World Bank currently does) emphasize private sector, investor-friendly development at the expense of social concerns and environmental health, and saddle member countries with more debt than you can shake a solid gold dinar at.

Shahed Amanullah is editor-in-chief of altmuslim.com.