G Lobal F Inancial C Rises & Muslim World

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G Lobal F Inancial C Rises & Muslim World

  1. 1. Making of the Crisis<br />1<br />
  2. 2. Making of the Crisis<br />2<br />
  3. 3. From the Mortgage Crisis to the Global Economic & Financial Crisis<br />3<br />
  4. 4. The Current Global Financial Crisis:The Deepest since World War II<br />4<br />
  5. 5. 5<br />Global Financial Crisis:Impacts on OIC Countries<br />
  6. 6. Major Impacts<br />6<br />
  7. 7. Slowdown in Economic Growth<br />7<br />Revisions by IMF for 2009 Growth Projections<br />October 2008<br />November 2008<br />January 2009<br />April 2009<br />July 2009<br />World: From 3.0% to -1.4%<br />Advanced Economies: From 0.5% to -3.8%<br />Developing Countries: From 6.1% to 1.5%<br />
  8. 8. Slowdown in Economic Growth<br />8<br />Regional Economic Growth in the OIC<br />
  9. 9. Fall in Export Demand and Commodity Prices <br />9<br />WTO: -9%<br />IMF: -11%<br />“The largest contraction since World War II”<br />Exporters are to suffer while importers, especially the LIFDCs, are to benefit<br />
  10. 10. Sharp Drops in Private Capital Inflows<br />10<br />Decline in developed countriesby 25%<br />Increase in developing countriesby 7% (20% in 2007)<br />
  11. 11. Interruption in Flows of Official Development Assistance (ODA)<br />11<br />Threat for achievements in MDGs<br />European aid, providing over half of global aid flows, accounted for 0.40% of GNI in 2008 (+ €4 billion over 2007)<br />+ €20 billion needed over the next 2 years to meet the target<br />Since December 2008, many European countries have announced cuts to their 2009 aid budgets.<br />
  12. 12. 12<br />In 2008, developing countries received $305 billion of remittances.<br />South Asia and Europe & Central Asia are expected to witness sharper decline compared to other regions.<br />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.<br />Interruption in Flows of Remittances<br />Growth of Remittances (%)<br />Remittances in OIC countries<br />
  13. 13. Deterioration in Current Account Balances<br />13<br />Decline in global demand<br />Slowdown in economic activity/growth<br />Fall in oil & commodity prices<br />Decrease in imports<br />(volume and import bill)<br />Credit crunch in export markets<br />( + )<br />Decrease in exports <br />(volume and revenues)<br />Current Account<br />Balance<br />( - )<br />Decline in Remittances<br />
  14. 14. Increase in Unemployment and Poverty<br />14<br />The increase originates mainly in;<br /><ul><li>Developed Economies & the EU
  15. 15. East Asia
  16. 16. Latin America & Caribbean
  17. 17. Central and South Eastern Europe (non-EU) & CIS</li></ul>Ratio of workers living on less than $2 a day:<br /><ul><li>2007 40.9% (1.2 billion)
  18. 18. 2009 46.8% (1.4 billion)</li></li></ul><li>15<br />Islamic Financeas a Solution<br />
  19. 19. The Global Economic & Financial Crisis:The Real Causes<br />16<br />
  20. 20. Common Views on the Causes<br />17<br />
  21. 21. Implications for Islamic Banking <br />18<br />
  22. 22. Islamic Finance as a Solution<br />19<br />
  23. 23. Islamic Theory of Finance and the Global Financial Crisis<br />20<br />Islamic Theory of Finance <br />
  24. 24. 21<br />Rules and Regulations<br />Forbid<br />Stipulate<br />Islamic Theory of Finance and the Global Financial Crisis<br />
  25. 25. Islamic Theory of Finance and the Global Financial Crisis<br />22<br />Islamic Theory of Finance <br />
  26. 26. Islamic Theory of Finance and the Global Financial Crisis<br />23<br />Islamic Theory of Finance <br />
  27. 27. Islamic Theory of Finance and the Global Financial Crisis<br />24<br />
  28. 28. Islamic Theory of Finance and the Global Financial Crisis<br />25<br />Principles of Islamic Finance against the Crisis<br />
  29. 29. Islamic Theory of Finance and the Global Financial Crisis<br />26<br />Principles of Islamic Finance against the Crisis<br />
  30. 30. Concluding Remarks<br />27<br />
  31. 31. Concluding Remarks<br />28<br />

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