Toronto – The fifty-seven countries that form the Organization for Islamic Cooperation (OIC) account for twenty-three percent of the world’s population, yet less than eleven percent of the world’s GDP. As such, the average levels of income within the Muslim world are less than one half the world’s average.
A new benchmarking study from the University of Toronto’s Rotman School of Management and the Saudi Arabia-based Madinah Institute for Leadership and Entrepreneurship hopes to help better understand the factors which underlie the poor economic performance of the world’s Muslim economies.
Working with a group of Rotman MBA students including Abhishek Chaudhary, MBA’14; Omer Saleem Morning MBA’15; and Ash Zare, Evening MBA’15; Prof. Walid Hejazi from the Rotman School and Imran Zawwar from MILE benchmarked the fifty-seven OIC countries on over 100 indicators,
The study showed that as a group the OIC countries:
- have average incomes which are less than half the world average;
- rank below global averages on institutional development, including voice and accountability, political stability, government effectiveness, regulatory quality, rule of law and control of corruption (World Bank Governance Indicators);
- rank unfavorably on the ease of doing business;
- lag world averages on literacy and education, particularly among females ;
- while not lagging world averages on labour market participation rates for males, there is a significant gap for females; and,
- not only significantly lag developed markets on R&D efforts, but also lag other developing nations.
“Together these factors are capable of explaining a large part of the gap between incomes in the Muslim World and the developed world. The implications of these analyses underscore the need for efforts to improve these indicators across the Muslim world,” says Prof. Hejazi. “We hope our systematic and comprehensive analysis will allow for the creation of well-informed and feasible policies to enhance the economic performance of the world’s Muslim countries. As is well known, as incomes rise and countries develop, institutions tend to improve, resulting in improvements in political stability, human rights and a whole host of other indicators.”
Not all the news is negative. There have been claims that Islam is incompatible with democracy, highly developed institutions, and women’s participation in the labour market. While these challenges are prevalent across the Muslim world, there are many Muslim countries that rank among the world’s most developed countries on many of these measures. Countries such as the UAE, Bahrain, and Qatar rank among the world’s best economies on many dimensions, and Malaysia and Turkey on others. Also, in countries with significant poverty, which is clearly the case in many of the world’s Muslim countries, there are significantly higher probabilities of self-employment.
This is the first study in the collaboration between MILE and Rotman, which a series of reports planned for release over the next year.
The Rotman School of Management at the University of Toronto is redesigning business education for the 21st century with a curriculum based on Integrative Thinking. Located in the world’s most diverse city, the Rotman School fosters a new way to think that enables the design of creative business solutions. For more information, visit www.rotman.utoronto.ca.
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