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Why Muslim Countries are Underdeveloped?

10 April, 2012

The Muslim countries generally have low GDP. Their majority is underdeveloped. This is mainly because of their poor leadership and management.

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Most of them won their freedom from the colonial powers after the World War II, but they did not or could not concentrate on leadership development, they needed for their future. Consequently, due to poor leadership and management and lack of good governance they have been making less progress. It is not destiny but self imposed poverty. As a matter of fact, the Muslims countries possess the richest resourceful regions of the world. They are joined geographically from Morocco to Indonesia, except for India and Israel. They occupy major sea, air and land trade routes. They produce almost 50% of the oil of the world. Nearly one third of the raw material of world is provided by them. Yet their lack of good governance and low level leadership and management, they are dependent on external loans and aid. The country like Egypt that was known for its fertile lands now imports wheat.


Islamic Development Bank published a report which says that in 1996 the total external debt of its member countries was 618.8 billion dollars, while the Muslims assets in the western banks were estimated around 800 to 1000 billion dollars. It means that the loans which Muslim countries take from the west are, actually, their own money. They borrow it and, then, return with multiple interest.

If this money were utilized through some Islamic monetary system and through Islamic banks with appropriate leadership and management skills, the Muslims countries could have become economically independent.

When come to human resources, the Muslim countries have abundant human resources; their ratio of youth population is greater than Europe. If this human resource is trained in terms of technology, education and executive coaching they can become a great asset to rely on to make tremendous progress, as China has done. Technology is no more confined to few technologically advanced countries. Sooner or later, technology becomes a common inheritance of human beings, provided, they want to.

Another problem in the Muslim countries is unequal distribution of wealth. The present system of interest based economy favors the affluent capitalists who get benefit from the savings of the common people, who deposit it in the bank, and when they make enormous profits allow not the common people to share these profits but for meager fixed rate of interest, which is again taken back from them in the name of charge to the cost of production. This means that the capitalists use money of depositors to get their own benefit and actually pay them nothing since the payments of interest are added to the cost of production.

Another major cause, which disturbs the natural economic operation of free market is speculative transactions, especially in the stock markets, which in addition to other negative implications, amount to the unequal distribution of wealth.

Islamic economic system not only allows the market forces to operate freely but also provides mechanism to make them regular. It applies two kinds of control on the financial economic activities:

  • Firstly, it delineates the cleavage of Halal and Haram. It forbids interest, speculative transaction. This helps to die out monopolies and economic benefits reach to all.
  • Secondly, the system of zakat, charity, and certain other financial obligations make even the Halal income distributed to the people with low income who do not have purchasing power. This charity helps them buy things, hence economic activities boost up.

Unfortunately, Islamic economy at state level is yet not in practice. It is but the Islamic economic system which can help the Muslim countries to make real economic progress and win their economic independence. This needs great skills and education. The Muslim countries should focus education and technology. They should launch leadership development and executive coaching programs to raise future leaders and Islamic economists.

Articles written by Mr. Irfan Shahzad.

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