The Muslim world today is going through a period of low economic growth, inter-communal trade, high indebtedness and socio-economic problems of poverty, economic and political instability. The institutions of the Muslim world namely, the Organisation of Islamic Countries (OIC) and the Islamic Development Bank (IDB) along with many other Islamic banks and financial institutions that have mushroomed, have not played their due part in solving the economic or political problems of the Ummah. Particularly following the days of the high oil revenues and in recent times by the prospect of profitability in the new financial age, they have all failed to achieve the goal of self-reliance in the Muslim world.
The question then is why has this instability in the Muslim world continued, even though many other regional economic blocs have succeeded in paving their way to progress in recent times. It should be recalled that economic integration of the Muslim world has been on the agenda of the OIC and IDB for quite some time now. The Muslim Ummah is 1/4 of the total population of the world and possess 70% resources of energy. But it is backward, ignorant and suffers from the worst economic crisis of history. The criticality of the situation can be gauged from the fact that there are 435 universities in whole Islamic world, whereas the number of universities in Japan only is more than one thousand. Islamic world produces 500 PhDs in the field of science whereas Britain produces 1300 PhDs in just one year. Total Gross Domestic Product of the Muslim countries in the field of energy is $1200 billion, whereas the volume of GDP of Japan falls in the neighbourhood of $5000 billion.
Keeping in view the conditions in the world, European countries felt after the World War II that they cannot live honourably without economic progress. They made a plan to unite the whole of Europe and that gave birth to European Union in 1956. Firstly, six countries constituted it, namely Belgium, France, Italy, Netherlands, Luxembourg and Germany. They created the European coal and steel community (ECSEC) by pooling their coal and steel resources in a common market controlled by an independent supranational authority. European Union’s first step was the formulation of common policies, and thus they established single market of coal and steel in January 1993, in which goods, services, people and capital would move as freely as within one country. They introduced single currency Euro in January this year. It suffices as evidence that the wealthy in the developing manufacturing countries have achieved a combined wealth of $3000,000,000,000.00 through the past 20 years. During the same period, the foreign debt for these countries reached $1945 billion.
Now let us look at some Muslim countries and their economy. Pakistan: The initial target for the real GDP growth during the current fiscal year (2000-01) was fixed at 4.5% with agriculture and large-scale manufacturing growth by 2.6% and 6.2% respectively. While fixing the growth target the shortage of irrigation water was taken into account. However, the drought situation has worsened since the fixing of initial targets. Dry spell has continued all through the current fiscal year resulting in 40% shortage of irrigation water against the normal water availability. The drought situation has already affected adversely two major crops — rice and sugarcane while the target for wheat crop has also been scaled down to 18.75 million tons. Consequently, the target for the real GDP growth has also been revised downward to 3.8% from the initial estimates of 4.5%. Saudi Arabia: The annual growth rate of total population was 2.5% between 1992 and 1999 as opposed to 3.5% in the preceding decade. Figures indicate that currently there are 5.02 million expatriates in the Kingdom and 14.9 million Saudis for a total population of 19.9 million. Saudi’s and the Sabah’s whose personal wealth exceed $US200 billion, this wealth equates to 10% of the entire third world debt. Egypt: The Egyptian cabinet discussed the draft 2001/02 budget in April, which includes provision for 13.6% increases in nominal spending. The government says the deficit in the new budget will be the equivalent to 2.6% of GDP. The draft for 2000/01 had a deficit of 1% of GDP but this was subsequently revised following the release of figures, which showed that the actual deficit was 3.7% of GDP. Qatar: The Qatar government, in its 2001/02 budget, has budgeted for its first surplus ($US136 million) in more than a decade. According to this budget, which came into effect in April, revenues are projected to increase to $US4.96 billion (a 43% increase on the previous year) while budgeted expenditure has only forecast the increase from 14% to $US4.8 billion. The sharp increase in revenues is in part explained by the fact that the new budget has been based on an average oil price of $US116.50 a barrel compared with $US15 a barrel in 2000/01. The rise in revenue also reflects that liquefied natural gas exports are set to climb to 12.4 million tons in 2000. Iran: Iran holds almost 10% of world oil reserves. It is OPEC’s second largest producer. It has also the second largest oil and gas reserves in the world. Iran’s recent economic situation is problematic, to say the least, exacerbated by record-low oil prices during 1998 and early 1999.
Residents of six Gulfs GCC states (Saudi Arabia, Kuwait, UAE, Bahrain, Qatar and Oman) spent US$27 billion on foreign holidays in 2000 according to a recent international survey. This represents more than is being spent by the European Union. The average spending per Gulf resident is US$1814, while the corresponding figure for the EU is US$836. This works out at US$135 per night away, compared with US$88 for the EU. In all, GCC residents made 8.8 million overseas trips last year and this among a total population of less then 25 million people. The breakdown by destination was the Middle East itself, 2.2 million visits, South Asia 1.2 million, Egypt and North Africa 1 million, Europe 0.9 million, SE Asia and North America 0.2 million. These figures are distorted by the fact that they contain the data for expatriate workers in the Gulf, hence the high number of visits to South Asia, but the pattern is clear — GCC Arabs are frequent overseas travelers and big spenders.
We need to ponder over the fact that countries that were backward some 50 years ago are leading the world in the field of science and technology today, but we are as backward as we were some 50 years ago. Today’s world is that of economy. Due to its progress China got back Hong Kong without firing even a single bullet. In spite of the damage of the World War II, Japan is now one of leading powers of the world. But the Islamic world, which was a seat of learning in the past, is helpless today. The main reason of this is lack of unity. Muslim countries have resources but they are economically backward. If we want to get out of economic logjam and live with honour in the world, we will have to establish Islamic economic community on the pattern of European Union. OIC and other organisations can play an important role in establishment of such a community.
In my opinion, five areas deserve our immediate attention: education, culture, economy, science and technology, and joint ventures. If European Union can make its mark with just 12 countries, why can’t 56 Islamic countries do the same?
Mr. Muhammad Tahir-ul-Qadri is a prominent Pakistani scholar and politician.