Islamic Perspective for Sustainable Financial System
Where Do Muslim Countries Stand on Sustainable Development GoalsSalman Ahmed Shaıkh, M. Kabir Hassan
The scope of the term ‘economic development’ has gone through significant changes in the past literature. In the early literature, economic growth and economic development were synonymous terms and per capita income was considered as a sufficient measure for assessing the level of economic development. In recent decades, the emphasis was placed on human development and now the concept of development also incorporates environmental sustainability. This chapter explains that the aims of sustainable development are harmonious with the philosophy and institutions of Islamic finance. This chapter has two aims. First, it measures the performance of Muslim majority countries on sustainable development parameters. Second, it discusses how Islamic finance principles, institutions and instruments can assist in making progress towards meeting the goals of sustainable development. To achieve the first objective, this study develops a new index to gauge the performance of Muslim countries on each of the Sustainable Development Goals (SDGs) individually and collectively. To achieve the second objective, this study outlines the Islamic approach to sustainable development through the Islamic value framework along with Islamic commercial finance and Islamic social finance institutions.