The Organization of the Islamic Conference urged Muslim states to back an Islamic free trade area, saying it will pave the way for economic progress.
The first round of talks was launched in Turkey last year for what is known as the "Framework Agreement on Trade Preferences among Islamic Countries; a milestone that would pave the way for the establishment of the Islamic Common Market,” said OIC Secretary General Ekmeleddin Ihsanoglu in a speech read by Allal Rachdi, director general of the Islamic Center for Trade Development.
The initiative will "enable us to overcome the obstacles and bottlenecks that hinder the development of trade and investment between our countries," Rachdi told the World Islamic Economic Forum on Saturday.
Rachdi said that a protocol on the Trade Preferential Scheme has been drafted and is expected to be signed by a number of Muslim states in November, but added that this reflects “very modest progress”.
He also warned that Islamic countries will suffer if they failed to establish multilateral trading alliances. "The current world conjecture is marked by the increasing emergence of regional groupings where isolated countries cannot survive,"
"We therefore should pool our resources together and undertake common, global and sensible action to handle efficiently our economic situations and set up our economic infrastructures in a bid to alleviate poverty."
Up to 500 representatives and business leaders from about 44 countries are attending the three-day forum in Kuala Lampur, which is aimed at strengthening trade relations between Muslim states.
“Roadmap”
Meanwhile, Pakistan's Prime Minister Shaukat Aziz outlined a "roadmap" to economic development for the Islamic world, including overcoming conflicts and promoting better governance.
Aziz also said that Muslim countries must establish an “Islamic Economic Union” to encourage trade. "We can make a beginning by entering multilateral free-trade arrangements among Muslim countries as well as promoting the free flow of labor and material resources. We also need to create a world-class capital market to attract international capital, which would enable us to finance our development and growth," Aziz said.
According to Aziz, 24 percent of the world’s Muslim earns less than a dollar per day and an average of 39 percent live below the poverty line.
Muslims make up 19 percent of the world’s total population but only 6 percent of its income.
The Islamic world’s share in international trade is only 8 percent while intra-Islamic world trade accounts for 13 percent of Muslim countries' total trade. Collective gross domestic product is $1.7 trillion, about 8 percent of the world's GDP.