Pakistan has proposed creation of an Islamic Economic Union by entering into multilateral free trade agreements and promoting free flow of capital, labour, goods and services.
The proposal was by made by Prime Minister Shaukat Aziz in his keynote address, 'The way forward for Muslim Economic Renaissance' at the inaugural session of the three day Second World Islamic Economic Forum Conferences 2006 here on Sunday.
PRIME MINISTER SHAUKAT PUT FORWARD A SEVEN-POINT ACTION PLAN, WHICH INCLUDED FOLLOWING INTEGRATED AND CALIBRATED MEASURES:
i) The OIC must evolve an effective dispute resolution mechanism to resolve its issues and problems and put in place a sound framework for mutual co-operation, besides promotion of unity amongst and within the member countries, broaden and deepen economic relations and ensure energy, water and food securities.
ii) The Muslim World must undertake necessary political, economic and social reforms to create an enabling environment for harnessing our individual and collective potential by ensuring political stability and continuity, good governance, transparency and accountability as well as consistent economic policies and improved delivery of social services especially in health and education.
iii) The OIC member countries must focus on education and catch up in the field of science and technology, skill development through vocational training which are in demand in national and international markets.
iv) The Islamic countries should evolve a comprehensive growth model to provide a strategy for balanced development and provide for sharing of financial and commodity surpluses through institutional mechanisms driven by public-private partnerships.
v) The less endowed Muslims countries should develop absorptive capacity to make optimal use of scarce domestic capital and to benefit from cross-border flows.
vi) Depending upon individual comparative and competitive advantage, the Islamic countries should try to specialise and carve out niches for themselves in vital economic sectors such as energy, telecom, IT, banking, mining, agriculture, services etc; and
vii) OIC and Islamic Development Bank need to be repositioned and re-invigorated and create a world-class capital market to attract international capital which would enable the Muslim countries to finance their growth and development.
He said that the Muslim world is rich in human capital as well as physical resources and has immense potential for growth, progress and prosperity. "We constitute one-fifth of world population and our people are intelligent, industrious and enterprising and possess 70 percent of the world's hydrocarbon reserves" he said.
However, he said, that "our economic performance is not commensurate with our true potential, since a vast majority of Muslims live in poverty and backwardness; nearly 39 percent of the world's Muslim population lives below the poverty line.
Muslim world makes up 19 percent of the humanity but only 6 percent of its income. Its share in global trade is barely 7-8 percent while only 13 percent of its total trade is among its member countries. Sadly, no Muslim nation is among the group of developed industrialised countries.
Shaukat said that the new world order is characterised by economic integration, technological advancement, predominance of knowledge economy and diffusion of democratic idea which has brought three fundamental changes, namely (i) new governance paradigm whereby the private sector is leading the process of economic growth and governments have become policy makers, facilitators, regulator and enablers; (ii) supra-national institutions are laying the rules of the game and nation-states are called upon to operate within that framework; and (iii) buoyant expansion of global trade and capital flows as well as free exchange of ideas and technology provide vast opportunities for growth and also pose challenges.
He said that the way forward in this highly competitive and inter-dependent world is through improved governance and reform within individual Muslim states, on the one hand, and by exploring new avenues of mutual cooperation based on commonality of interest, on the other.
Shaukat said that one of the biggest challenges facing the Muslim world is on account of insecurity emanating from disunity and dissensions "within our ranks, which not only sap our energies and resources but also undermine our prospects of meaningful co-operation."
"Muslims in Iraq, Afghanistan, Palestine, Lebanon and Kashmir continue to face insecurity, death and destruction," he added.
The Prime Minister emphasised that "we should not allow ourselves to become hostage to the actions of a minority within ourselves who have taken to extremism for one reason or the other and approach the current-day realities with open minds and adopt futuristic vision to resolve our issues and problems.
He said the world community has a responsibility to remove the causes of injustice and frustration so that a lasting solution to the scourge of extremism and terrorism can be found.
He said that under the leadership of President General Pervez Musharraf the government has carried out comprehensive and multidimensional reforms in the political economic and social spheres to rejuvenate its position in the world.
In the political field, he said, the government has ensured good governance through accountability and transparency and empowered the people from grass root to the national level.
In the economic sector, he said, the government's reforms based on the principles of deregulation, liberalisation and privatisation have ensured an upward growth trajectory and 14 million people have come out of poverty in just four years.
He said in the social realm, the government is focusing on improving and enlarging the delivery of health and education in order to develop and a healthy and educated workforce that would shore up Pakistan's knowledge based economy.
In the opening session, Prime Minister of Malaysia and Chairman of OIC Dato Seri Abdullah Ahmad Badawi also presented his special keynote address "enhancing global competitiveness and trade among Muslim countries.
He said that the Muslim nations are faced with economic, social and political problems, which they cannot address without assistance from other Muslim countries and co-operation with the West.
He said that there is a wide urban and rural divide in the Muslim countries because of economic, social, and cultural disparities which, is hampering poverty alleviation in the OIC member countries.
He said that Muslim countries must allocate more funds to provide quality education to its new generations and take urgent steps to reduce unemployment of the youth, which is highest in the world.
Badawi said the governments of OIC member countries must strive to end sectarianism, ethnicity and promote culture of tolerance, enlightenment and higher education to meet complex challenges of the contemporary world.
Presenting his paper entitled 'Challenges of Social Development to Islamic World' President of Islamic Development Bank Dr Ahmed Mohammad Ali assured the conference that IDB would extend maximum financial assistance to member countries for poverty reduction programmes.
Chairman of World Islamic Economic Forum and former Deputy Prime Minister of Malaysia, Tun Musa Hitam, also addressed the conference and highlighted future programmes and vision of WIEF.
At the end of the inaugural session, two memorandums of understanding (MOUs) were signed to increase co-operation among the Muslim countries in various social and educational fields. Pakistan, Bangladesh, Malaysia and Indonesia signed an MOU to provide vocational training to youth in their countries.