Dr. Savaş Alpay, Director General of SESRIC, participated in the OIC/COMCEC Business Forum that was organized by the Union of Chambers and Commodity Exchanges of Turkey (TOBB) and the Independent Industrialists and Businessmen’s Association (MUSIAD) on 5-6 November 2009 in Istanbul, Turkey, on the sidelines of the 25th Session of the COMCEC.
During the first session of the Forum moderated by Ömer Cihat Vardan, president of MUSIAD, Dr. Alpay briefed the audience on the impacts of the current global financial crisis and its impacts on OIC member countries. He noted that the average growth for OIC countries is expected to decelerate because of the crisis to 1.5% in 2009, compared to 5.1% in 2008.
Noting the sharp fall in export demand and commodity prices, Dr. Alpay said that “Open economies, exporters of a small range of products, and dependants on markets of major economies, mainly the US and the EU, will be most affected.”
Sharp drops in private capital inflows, interruption in flows of official development assistance (ODA) and remittances, deterioration in current account balances, and increase in unemployment and poverty were the other major effects of the crisis that Dr. Alpay highlighted in his speech.
Elaborating on the real causes of the crisis rooted in the practices of the conventional banking and financial system, Dr. Alpay drew attention to Islamic banking and finance as a potential solution to the economic and financial crises. He suggested that “If global banking practices adhere to the principles of Islamic finance, which are based on noble ideas of entrepreneurship and transparency, the current global crisis would have been prevented.”
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