The narrow definition of the Islamic economy would estimate its global size to be US$3 trillion. According to the OIC-level definition, the size of the global Islamic economy is estimated to be between over US$9 trillion (in terms of combined nominal GDP of the OIC countries) to less than US$13 trillion (in terms of the GDP adjusted in terms of the purchasing power parity or PPP).
Although the idea of developing a new discipline in the name of Islamic economics was given by some Muslim economists from the Indian sub-continent about 50-70 years, it has been only of late that the need for quantifying Islamic economy has been felt. The organisations like Dubai Islamic Economy Development Centre (DIEDC) have started focusing on Islamic economy as a kind of halal economy that may also include Islamic banking and finance. There are different ways in which an Islamic economy may be defined. A narrow definition would include halal industries (food, pharmaceutical and beauty products), modest fashion market, halal and faith-based tourism, and the Islamic financial services.
On an individual level, economy of a country with predominantly Muslim population may be deemed as an Islamic economy. Conversely, an Islamic economy may encompass Shari’a compliant production of all permissible (halal) goods and services on a local, national or on a global level. Following the former, the aggregated gross domestic product (GDP) of all the countries comprising the Organisation of Islamic Cooperation (OIC) will represent the global Islamic economy. Following the latter, while only a sub-set of the GDP of the OIC countries will qualify to be included in the Islamic economy, it will also include Shari’a-compliant goods and services produced outside the OIC countries, whether by Muslims or non-Muslims.
The narrow definition of the Islamic economy would estimate its global size to be US$3 trillion. According to the OIC-level definition, the size of the global Islamic economy is estimated to be between over US$9 trillion (in terms of combined nominal GDP of the OIC countries) to less than US$13 trillion (in terms of the GDP adjusted in terms of the purchasing power parity or PPP).
The global Muslim population is estimated to be 2 billion, which is around 25% of the total world population. The largest Muslim economy in the world happens to be Indonesia (with about US$1 trillion GDP and about 230 Muslims living therein).
All the above make up of an interesting story. Islamic economy is almost comparable with the US economy (US$18 trillion GDP in terms of PPP). The comparison is quite intriguing: The USA has 50 states; while the OIC comprises 57 countries (including the likes of Nigeria, Lebanon and Malaysia, which are multiethnic and multi-faith countries). The total population of the OIC countries is 1.6 billion, while the number of people living in the USA is about 322 million.
While the US economy is integrated; the Islamic economy is highly decentralised and dispersed. Its real strength is in its demography, which defines its potential. Per capital GDP in the USA is around US$55,850, while the respective average figure for the whole of the OIC block is US$8,125, a difference of US$7, 725. The Islamic economy would have a size of US$90 trillion if the per capita GDP in the Muslim world was as much as in the USA.
This makes the Islamic economy very interesting for political consideration, as the OIC economy can aim to become the largest economy in the world. If Muslims put their house in order, they can become the most powerful economic force on the planet. But are they up to it? Given the widening political differences amongst the Arab countries, and in the wake of the recent marginalisation of Qatar in the GCC, this economic potential and the political power emanating from it could be seen no more than a dream.
“While the US economy is integrated; the Islamic economy is highly decentralised and dispersed. Its real strength is in its demography, which defines its potential.”
