Islamic Finance: A Catalyst for Shared Prosperity?
Under a joint initiative of the Islamic Development Bank Group and the World Bank Group, the inaugural Global Report on Islamic Finance has been prepared with a focus on the widening disparity of global wealth and how Islamic finance can help in enhancing shared prosperity.
This Report is timely, as world leaders have adopted the 2030 Agenda for Sustainable Development, which includes a set of Sustainable Development Goals (SDGs) to end poverty, fight inequality and injustice, and tackle climate change by 2030. The Islamic Development Bank Group, in its 2016–25 Strategic Plan, gives priority to inclusive and sustainable socioeconomic development among member countries within its role in advancing Islamic finance globally.
Besides imposing social and environmental costs, severe inequality adversely affects economic growth and wealth creation. The question that needs to be addressed is how to minimize the disparity in wealth and enhance shared prosperity. Given its potential role in economic development, Islamic finance can contribute toward achieving these objectives.
The Global Report provides a comprehensive overview of the existing status of various Islamic finance sectors and identifies major challenges hindering the growth of Islamic finance. It also identifies policy interventions and tools for policymakers to leverage the principles of Islamic finance in an effort to eradicate extreme poverty and work toward a more equitable distribution of wealth. The main message of the Report is that Islamic finance, built on a foundation of social and economic justice, can contribute to shared prosperity through the principles of inclusive participation and risk sharing.