The Role of Chambers of Commerce in Promoting

Trades between OIC Member States and

Increasing the Benefits of the Private Sector from

Trade Preference Agreements

Na’el Raja AL-Kabariti

ChairmanMarch 19,20th

2014

Agenda

Conclusion

Introduction

Illuminating Experiences

Current State of Intra-Islamic Trade

Facts and Figures

The Importance of Activating the Trade Preference System

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The Importance of Blocs and Main Proposals

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Introduction1

• With the emergence of international economic blocs, it has become vital for OIC member states to consider establishing an economic bloc that would serve many objectives, perhaps the most important of which is to help facilitate intra-Islamic trade and eliminate customs barriers and restrictions as a key step toward creating a common Islamic market and achieve economic integration which is a strategic objective to deal with regional and international blocs.

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• We need to coordinate efforts, achieve economic integration, push toward common economic development and reduce useless completions between Islamic states. Here, we stress the fact that our goal is not to impose protection or restrictions; as the time for such measures has long gone, but rather to become a group of real competitors to international and regional blocs; particularly as experience has shown that individual economies cannot achieve any significant success or impact on overall international trade and global economy.

Illuminating Experiences

No issues for O2C4

We have achieved tangible progress and success in establishing Islamic banks which managed to make their way despite all initial challenges, and we must take the next step toward establishing an international trade system from the correct Islamic perspective. The success of Islamic banking is vulnerable to setbacks; unless we all move forward toward establishing common Islamic system and concept for international trade; moving in parallel routes and translating into a large union that would be recognized and dealt with on its own terms. When the Common European Market was established in mid-fifties of the last century, it only had six members and has now become the European Union which comprises most European countries, including former socialist ones.

The Reality of Intra – Islamic Trade

We all recognize and appreciate the efforts exerted by OIC which,

despite the substantial challenges facing the Islamic world, strives to increase trade, enhance economic integration, support development projects among its various member states in industry; agriculture; service and trade; and develop SMEs; seeking to achieve food security, fight poverty and create real jobs for young people in order to address widespread unemployment in its member states.

International markets, and foreign trade in particular, have come a long way in terms of development and progress in regulation, introduction of new legislations, combating money laundering and eliminating customs barriers and restrictions on the flow of goods and services through blocs and countries; which facilitated import, export and financing processes. Indeed, many Islamic countries produce high quality competitive goods and services which can replace goods and services imported from other blocs, particularly European ones.

We can no longer work separately and compete with one another while economic blocs around us are increasing in number, size, influence and power. Our world does not respect the weak and therefore, we need to take the first step. We have accumulated enough knowledge and experience to reduce the time needed to establish our new economic bloc compared to other blocs, including the EU.

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Facts and Figures

The contribution of OIC member states to gross world product (GWP) and international trade is in not compatible with the economic and financial capabilities of these countries which produce some (39%) of the world’s oil and have more than (70%) of world oil reserves and some (40%) of gas reserves.

The contribution of the (57) member states of OIC (which account for nearly 22% of the world population) to GWP in 2012 was (USD 904) trillion; i.e. nearly (11%) of GWP, while their share in total international trade during the same year was nearly (12.5%).

The share of intra-Islamic trade in total exports of Islamic countries was no more than (18%) at best, whereas the share of the EU; Japan and USA in the foreign trade of Islamic countries was between (40 – 94%) for exports and (40 – 80%) for imports.

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The Importance of Activating the Trade Preference SystemIt will be an important tool to

promote intra-Islamic trade and will encourage the private sector in Islamic countries to play a key role in enhancing intra-Islamic

trade, achieving the desired development

Support the financing of small and agricultural

projects; food security; vocational training and

social development.

Addressing global challenges

Improving the competitiveness of Islamic

economy in the international arena.

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The Importance of Blocs and Main Proposals

Adapting to economic globalization and responding to its challenges in terms of trade, productivity and technology, as well as increased international competition.

Reducing the reliance on other countries

(outside the bloc) in foreign trade and

therefore reducing economic dependence on the outside world.

With this bloc, Islamic countries will be able to

influence the decisions of WTO and other financial

and economic institutions such as IMF and WB; as

they often make decision which are primarily aimed

at protecting their own interests without any regard to the socio-

economic conditions of Islamic countries.

The Importance of Blocs and Main Proposals

Chambers of commerce within this group should identify present and anticipated weaknesses and drawbacks, determine how to overcome them and develop agreed upon timelines in order to provide member states with enough time to adapt and prepare their legislative situations to lay a foundation for a cooperation that would produce the desired success.

Chambers of commerce need to develop effective mechanisms for public-private partnerships by

enhancing communication and exchange of

information between trade policy makers, relevant

organizations and private sector partners; which is

the real drive behind sustainable economic

growth and prosperity in member states.

Chambers of commerce in Islamic countries need to discuss the economic conditions of OIC member states, study development prospects, explore new fields for investment and increase intra-Islamic trade. This would contribute to the efforts exerted to bring investors and decision makers in Islamic countries together in order to achieve the objectives of the OIC, support member states in need and develop services to help promote comprehensive development.

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Conclusion

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Achieving sustainable development would improve economic performance, help strengthen the economies of Islamic countries and enable them to compete with the economic interests of developed industrial countries which would like our countries to remain nothing more than markets for their products and source for energy and raw material; particularly as Islamic countries have the necessary resources and huge potential; both in terms of area and population.

Political will plays a key role in convergence between OIC member states. Decision makers need to believe in the significance and benefit of Islamic economic integration and put overall Islamic interest before the interests of individual states.