Malaysian Prime Minister Abdullah Ahmad Badawi has urged Islamic nations to open up their financial systems in order to create an Islamic common market.
Malaysian Prime Minister Abdullah Ahmad Badawi made the remarks to economic and finance ministers from the Organization of the Islamic Conference. They came in his opening address to the two-day meeting of the Islamic Development Bank in the Malaysian city of Putrajaya.
Mr. Abdullah told the 57-nation Organization of the Islamic Conference there is an urgent need to encourage close economic development in the Islamic world.
He said the OIC nations should promote and integrate markets and reduce tariffs and non-tariff barriers.
He expressed regret over the lack of strong economic links between OIC nations and said countries should promote free-trade agreements while working towards a common Islamic market.
William Bikales, the Asia Development Bank's principle economist in Southeast Asia, says that while a common Islamic market would not solve all member nations' financial problems, it would be a step in the right direction.
"It would not be the solution of everybody's problems, but it can contribute towards that solution," he said. "It may implement them towards other steps as well."
Mr. Bikales said Malaysia is in a good position to set an economic example for other countries with large Muslim populations.
"In general, Malaysia has been a very clear example of how you can do well by opening, by planning carefully, and by having an effective policy apparatus to implement that opening," he said.
He also says the Islamic countries have a lot in common, and this in itself could help to spur trade.
"There are a lot of ways in which I would think the Islamic countries, by virtue of cultural similarities - the financial service, the booming development of Islamic financial services, trade and products, halal food, and so on - I think it would be a very positive step towards strengthening trade among them," continued Mr. Bikales.
Malaysia is the current chair of the Organization of the Islamic Conference, the world's biggest Muslim bloc, and has been pushing for closer economic and trade links among member nations.
As part of that process, Malaysia announced earlier this week that 14 OIC nations will join a preferential trading system, and says additional member nations are expected to sign up.
Mr. Abdullah also suggested the Islamic Development Bank develop an OIC bond fund to which the central banks of member nations can contribute, using the proceeds to fund major projects in OIC nations.