G Lobal F Inancial C Rises & Muslim World

Making of the Crisis
1

Making of the Crisis
2

From the Mortgage Crisis to the Global Economic & Financial Crisis
3

The Current Global Financial Crisis:The Deepest since World War II
4

5
Global Financial Crisis:Impacts on OIC Countries

Major Impacts
6

Slowdown in Economic Growth
7
Revisions by IMF for 2009 Growth Projections
October 2008
November 2008
January 2009
April 2009
July 2009
World: From 3.0% to -1.4%
Advanced Economies: From 0.5% to -3.8%
Developing Countries: From 6.1% to 1.5%

Slowdown in Economic Growth
8
Regional Economic Growth in the OIC

Fall in Export Demand and Commodity Prices
9
WTO: -9%
IMF: -11%
“The largest contraction since World War II”
Exporters are to suffer while importers, especially the LIFDCs, are to benefit

Sharp Drops in Private Capital Inflows
10
Decline in developed countriesby 25%
Increase in developing countriesby 7% (20% in 2007)

Interruption in Flows of Official Development Assistance (ODA)
11
Threat for achievements in MDGs
European aid, providing over half of global aid flows, accounted for 0.40% of GNI in 2008 (+ €4 billion over 2007)
+ €20 billion needed over the next 2 years to meet the target
Since December 2008, many European countries have announced cuts to their 2009 aid budgets.

12
In 2008, developing countries received $305 billion of remittances.
South Asia and Europe & Central Asia are expected to witness sharper decline compared to other regions.
OIC member countries like Tajikistan, Lebanon, Jordan, and Guyana, where remittances account for 20 to 40 percent of their GDPs, will be more affected than the others.
Interruption in Flows of Remittances
Growth of Remittances (%)
Remittances in OIC countries

Deterioration in Current Account Balances
13
Decline in global demand
Slowdown in economic activity/growth
Fall in oil & commodity prices
Decrease in imports
(volume and import bill)
Credit crunch in export markets
( + )
Decrease in exports
(volume and revenues)
Current Account
Balance
( - )
Decline in Remittances

Increase in Unemployment and Poverty
14
The increase originates mainly in;
Developed Economies & the EU
East Asia
Latin America & Caribbean
Central and South Eastern Europe (non-EU) & CIS
Ratio of workers living on less than $2 a day:
2007 40.9% (1.2 billion)
2009 46.8% (1.4 billion)

15
Islamic Financeas a Solution

The Global Economic & Financial Crisis:The Real Causes
16

Common Views on the Causes
17

Implications for Islamic Banking
18

Islamic Finance as a Solution
19

Islamic Theory of Finance and the Global Financial Crisis
20
Islamic Theory of Finance

21
Rules and Regulations
Forbid
Stipulate

22

23

24

25
Principles of Islamic Finance against the Crisis

26
Principles of Islamic Finance against the Crisis

Concluding Remarks
27

Concluding Remarks
28

G Lobal F Inancial C Rises & Muslim World

by Arif Anis

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G Lobal F Inancial C Rises & Muslim World Presentation Transcript