What are the possibilities of an Islamic Economic Union that can harness the strength and market competitive advantage of a diverse set of countries that are endowed with enormous resources and highly talented populations? The basis for forming such a market is present and the conditions are optimal to achieve it in a period of time possibly shorter than the early trajectory of the European Union. At the core, the four or five different zones that broadly constitute the current Muslim world have competitive and distinct market features that, if put into a broader Economic Union, would produce synergies and provide a rapid engine for development. I know the current political climate militates against the idea, but dreams and visions of a better future are never regulated by the ‘here’ and ‘now’.
In the contemporary Muslim world, one can see the presence of a massive and diverse resource base that covers the full spectrum of human development needs and provides for the sustained flourishment of populations in large numbers in Muslim majority countries. Alone and separate, each existing resource can’t provide for the needs, but if arrayed strategically next to and in combination with each other, only the heavens are the limits. Likewise, the diverse and mostly hospitable geography, the massive and ancient river systems, the navigable strategic waterways and the easy access to markets turn the existing resources in far more advantages if they are utilized for integrated, sustainable and connected economies at local and regional levels.
Critically, the Muslim world is endowed with a massive human base, a 1.4 billion population that has every skill, knowledge and ability one can think of or contemplate for such an Islamic Economic Union. While an upgrade is needed, the levels of education are nevertheless rather high in a number of countries and the university system is competent in various states of the Muslim world. The major challenge is the declining or stagnant investment in education if compared to military or defense expenditure on the one hand, and heavy resource waste and bleed for luxury goods importation. In addition, the lack of such investment and appropriate levels of academic independence has led to the steady flow of intellectuals and scholars to foreign institutions, causing the brain drain problem. The loss of a scholar or researcher to a foreign institution is a net loss for the country, and it takes a generation to replace him/her.
An Islamic Economic Union can make it possible to leverage the academic and educational capacities of all participating countries and facilitate the creation of specialization among clusters of institutions. At present, the academic establishments of each country attempt to engage or cover as many fields as possible alone, without thinking or planning in a regional manner. I believe in creating hubs among institutions – be it in the social sciences, humanities, environmental studies, engineering, medicine or information technology – that can reduce duplication and provide for more strategic planning. Imagine if an economic union emerges between 55 countries, with a strategic planning on the academic front – that would be able to foster and propel the economic activities across four continents!
A similar level of cooperation and integration across various sectors of the economy, industry, and communication and distribution networks would be transformative if done correctly and carefully over time. Whatever form of cooperation exists today tends to be formed on a narrow security basis, without a strategic regional or comprehensive vision in mind, or is driven by a single state actor at best. An Islamic Economic Union must be multilateral, deliberate and strategic in all its endeavors.
We are challenged by the limits of our vision, not by the limits of resources or the enemies that confront us. The past century was painful, and failure has been the norm rather than the exception. How can we emerge from this current state of affairs and create transformative conditions that can place the Muslim world anew at the hub of existing human creativity and innovations in all fields that are beneficial to humanity?
I do believe that the way to move forward is working towards an Islamic Economic Union. The steps that must be taken are many, but it all begins with a strong will and a vision to positively transform the current conditions in the Muslim world. Certainly, the primary impediment to moving towards the Islamic Economic Union is represented by the Muslim elites in the present nation-state, who have total control of the existing national market and resist exploring alternatives out of deep seated greed, fear and mistrust. Additionally, most of the current Muslim elites are connected to the economies of their ex-colonial mother-lands, and development strategies are mostly regulated by this. Here, the move towards an Islamic Economic Union is a double prong process, both internal and external, to be undertaken by governing elites in Muslim majority states. Should this process be done, the basic economic assumptions underlying each national economy will be reshaped.
The proclivity of current Muslim majority nation-states to trade mostly with the global north, China and Japan, while having less than 10% of their economic engagements with their neighboring Muslim states, is an under-development disaster that keeps giving. Even though Muslim majority nation-states enjoy competitive advantage in certain resources and easy delivery to markets, this gets lost due to the structural aspects of their economy and the focus on trade and economic activities with advanced economies, excluding those states that are more suited to provide greater benefits.
Certainly, I am aware of the levels of inefficiencies, corruption, nepotism and lack of professionalism – which are not unique to the Muslim world, as they also exist in advanced or highly developed economies, but these are better at insulating the over-all market from their sustained effects. Just think of all the factors that brought on the 2008/9 economic collapse and the levels of corruption and market manipulations that almost brought the world to its knees. On the flip side of that crisis, a number of Muslim investment houses protected the assets of their investors by adhering to a set of Islamic ethics in the market.
In order for us to arrive to an Islamic Economic Union, the focus should be on steps rooted in functional integration and not one demanding ideological unity. Up to this current period, Muslim nation-states and elites have pursued a path based on achieving ideological unity as a pre-condition to facilitating functional integration. This approach has resulted in short lived projects and failure to translate efforts into reality over a long period of time and across generations.
The Muslim world shares similar, if not identical, core values which can be easily harnessed towards a functional integration across sectors. In the early stages, the focus should be on all elements that can facilitate an improvement of the quality of life, and expanding the connectedness across the largest number of participating states. An integration of the transportation system, phone and internet communication networks, environmental and air quality standards, and creating a uniform building code will make a profound impact.
The next set of issues to be tackled should focus on the tariffs and taxation systems that create barriers to regional trade and in theory protect each economy, but in reality only lead to stagnation, isolation and strengthen the bilateral relations with highly developed economies that extract greater leverage due to the single market position of each state. Accordingly, the Islamic Economic Union must formulate financial plans to soften the blow on small member economies that are highly dependent on excessive tariffs and trade taxation structure for funding governmental operations.
Reaching a common currency is the game changer for the Islamic Economic Union but it is the most difficult undertaking and the one that will face the counter pressure from the U.S. and EU. A common currency for a new block of nation-states begged to trade in existing resources and regulating products entry into the common market will provide for a qualitative change in the position of the Islamic Economic Union. Currently, Muslim majority nation-states engage in the international market in a basket of hard currencies dominated by the dollar and the euro, which makes it structurally possible to continue to directly and indirectly fund and provide subsidies for both advanced economies. Purchasing dollars and euros to facilitate the entrance of individual Muslim nation-states into the international trade system essentially facilitates the strengthening of both currencies, while structurally weakening the position of the national currency on the one hand, and diminishing the existing competitive edge present in the resource rich states.
All of what I discussed above is known and not secret. Indeed, I am not the first nor the last to offer a different vision and a hope for an Islamic Economic Union. The biggest and most pressing challenge is getting current Muslim nation-state leaders to agree on taking the less travelled path of building cooperation and integration, rather than investing in wars, regional conflicts, and the desire to be the one and only leader for all Muslims.
The Islamic Economic Union will succeed if we all accept that a singular leader for all 1.4 billion Muslim is not achievable or desirable due to the complexity of the contemporary period. A council of Muslim heads of states can rotate leadership for terms of one or two years among all member states, but the rotation should be based on a balance for regional consideration as the better path forward. One hand does not clap, but a room full of hands can produce an orchestra.
It is important to note that Muslims are not clamoring to depose or reject their current leaders, but rather they are asking, demanding and pleading for the leadership to actually lead, to improve their economic conditions, protect their human rights at home and abroad, and treat them with dignity as partners who want to see the best for their society. The leaders that can actualize this in words and deeds will live eternally in the people’s hearts. We lack nothing of material resources, and yet we find our lot and status diminished by the hour and day. We are leaving our countries by the millions in rafts, planes and on foot to build the economies of other nations and states, but await the day to see the flow being reversed. The time to dream of this horizon is upon us and calls for the minds and energies of serious people.
