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Resource Rich Muslim Countries and Islamic Institutional Reforms


Liza Mydin, Hossein Askari and Abbas Mirakhor

Resource Rich Muslim Countries and Islamic Institutional Reforms explores the "resource curse," a condition in which a country’s abundance of natural resources is negatively linked with the country’s development and economic growth, in resource rich Muslim countries. The resource curse puzzle has been studied for over twenty years, with prior researchers looking to prove its existence and explore its causes. Recent studies have begun to indicate institutional failure as a likely cause of the curse, as wealth of resources tends to cause counterproductive behaviors such as rent-seeking, patronage and corruption. The subpar economic performance of resource rich Muslim countries in the Organization of the Islamic Cooperation (OIC) could be attributed to the manifestation of a resource curse. Collectively, the member countries of the OIC contribute over 9% of the world’s total GDP with 22.8% of the world’s population. Saudi Arabia and the United Arab Emirates alone contribute about 17% of world oil production. Resource rich Muslim countries should be at the forefront of economic performance and growth, yet we see the opposite when we compare the performance of these countries to countries that are not resource rich (such as Spain, France, Hong Kong and Japan). Through an analysis of sample countries, the authors have discovered that natural resources exert a drag on the countries’ economic growth, thereby indicating the presence of the resource curse. Their research also found weaknesses in the quality of institutions as the cause of the curse. To counteract the negative effects of the resource curse in resource rich Muslim countries, the authors provide a number of Islamic institutional reforms.

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Chapter 5: Addressing the Resource Curse through an Ideal Islamic Institutional Framework


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A truly Islamic economic system is one that is designed to be in compliance with Islamic rules deduced from the Qur’an and the life of the Prophet (sawa). Based on the Islamic vision, an Islamic solution would emphasize and stress amongst others, the following important principles; (1) a greater degree of justice, (2) a higher moral standard, greater honesty and trust to foster mutual cooperation, respect and love for others, and (3) a more equal and efficient distribution of resources and wealth amongst all members of the society. It is against the backdrop of achieving these fundamental principles that the following recommendations for institutional reform are developed.

Proposed Recommendations to Address the Curse and Strengthen Institutions

The recommendations are categorized into three different dimensions which include; (1) Redirection of Education, (2) Duties and Accountability of State Authority and Citizens, and (3) Enhanced supervision. These dimensions are elaborated in further detail below. ← 123 | 124 →

Redirection of Education

The ideal society as envisioned by the Metaframework of Islam is made up of believers that are committed to complying with the rules of Allah (swt). At the basic level, the relationship between Muslims and the Creator needs to be truly understood so that Muslims in practice may orient the organization of their daily lives in full understanding of their role. The tainted images of...

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