KL wants OIC members to boost investment

KL wants OIC members to boost investment

Shanthy Nambiar and Yoolim Lee, Bloomberg/Kuala Lumpur

Malaysia's Prime Minister Abdullah Ahmad Badawi said Islamic countries should boost investments in telecommunications, transport and public utilities to spur economic growth and trade.

Infrastructure facilities "constitute the backbone of development, and these need to be transformed to enhance efficiency and to support businesses," Abdullah told about 600 government officials, bankers and investors on Monday at the first World Islamic Economic Forum in Petaling Jaya, Malaysia. Islamic countries are already investing "billions of dollars" in infrastructure, he said.

The suggestion from Abdullah came as the 57-member Organization of the Islamic Conference seeks ways to arrest the decline in their share of global exports and lagged trade with countries outside the world's largest Muslim grouping. Ten of the 11-nation Organization of Petroleum Exporting Countries are OIC countries. OIC members include Pakistan, Malaysia, Saudi Arabia, Egypt and Indonesia.

There are an estimated 1.5 billion Muslims worldwide and the number is forecast to increase 2.9 percent a year, Abdullah said. The gross domestic product of Islamic countries is less than 5 percent of the global economy and trade among these nations account for about 6 percent to 7 percent, or $800 billion, of total trade, he said.

Abdullah said Muslims in India, China and Russia, who are not member countries of the Organization of the Islamic Conference, also represent key markets for growth.

India, where an estimated 138 million of its 1.02 billion people are Muslims, posted economic expansion of 8.1 percent in the three months ended June 30, the fastest pace in more than a year as companies increased production to feed a consumer boom, the Central Statistical Organization said Sept. 30. India is Asia's fourth-largest economy.

China's economy expanded 9.5 percent from a year earlier in the first half to 6.74 trillion yuan ($833 billion), according to the statistics bureau. The country, Asia's second-largest economy, is the world's No. 1 consumer of steel, copper and coal.

"Should we combine these figures with the Muslim population in the OIC nations, it will provide us with an immensely huge Islamic consumer market," Abdullah said.

Islamic nations have attracted only a "small share" of global foreign direct investment, and most of these have gone to middle- income and oil exporting countries, Abdullah said. Muslim majority countries such as Kuwait, United Arab Emirates, Saudi Arabia and Qatar are also members of OPEC. Saudi Arabia is the world's largest oil producer.

"While many Muslim countries are blessed with rich natural resources, predominantly oil and gas, the long-term challenge is to sustain economic growth by reducing over-reliance on these resources," Abdullah said.