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Muslim countries to form trade bloc
KUALA LUMPUR, Times of Oman — Malaysian Prime Minister Abdullah Ahmed Badawi said Muslim nations have agreed ‘in principle’ to form a trade bloc, which will have a great influence on global trade.
“To create a large trade bloc, Muslim nations need to further promote and strengthen economic ties and cooperation,” said Badawi, who currently chairs the world’s largest Muslim bloc — OIC (Organisation Islamic Conference) countries.
The intra-OIC trade is only 12 per cent of the total trade of OIC countries. OIC trade with non-OIC countries is eight times the size of intra-OIC trade.
Moreover, the total trade volume of OIC countries is only seven per cent of the total international trade, though OIC controls 60 per cent of the world’s natural resources.
OIC share of world exports has been declining drastically since late 1990s. The share of exports fell from 16 per cent in 1980 to eight per cent in 2001,” Badawi told Times Business.
“Muslim nations can do this as they comprise about 20 per cent of the world population and own enormous natural resources.
Some Muslim nations can be counted among the rich nations of the world. We have several issues to be addressed and Muslim nations will have to focus more on integrating trade, investment and economic relationships,” Badawi told newspersons on the sidelines of the thirtieth annual meeting of the board of governors of Islamic Development Bank (IDB) here on Thursday.
“However, the Muslim world faces critical challenges in every field — political, economic, social, and peace and security. The critical challenge, which can be underlined as the root of most of our problems, lies in the economic field.
“More precisely, 27 countries of the 55 IDB member countries belong to the low income group and poverty and illiteracy are the prominent features in many of these countries.
The combined GDP of IDB-member countries accounted for less than five per cent of the world GDP in 2003, the OIC chairman pointed out.
“Malaysia is committed to promote and strengthen cooperation among the OCI countries, and that is why, we hosted the IDB board meeting. A fifth of humanity was represented at the meeting as we carry the dreams, hopes and aspirations of more than 1.4 billion Muslims around the world, for a better, more secure and more prosperous future,” Badawi told Times.
He said an OIC Preferential Trade System is expected to be finalised by the end of 2005.
This we feel will lay the foundation for a future large economic integration. In its 30 years of operations, Saudi-Arabia based IDB has played a vital role in promoting cooperation among Islamic countries, by disbursing more than $34 billion for 4,400 projects.
Of which 61 per cent was for trade finance and 29 per cent for project finance, while the rest was used for technical assistance. In the years to come IDB will contribute more meaningfully and effectively towards increasing the social and economic status of its members.
To accomplish it, IDB has established a vision commission chaired by Dr Mahathir Mohammed, former prime minister of Malaysia.
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