The Muslim world must make its economic policies more market-friendly if it wants to overcome economic deprivation, Pakistan President Pervez Musharraf said today.

His call at a business forum ahead of an Organisation of Islamic Conference (OIC) summit on Thursday, was echoed by Malaysian Prime Minister Dr Mahathir Mohamad, who urged Muslim nations to increase their prosperity through industrialisation.

Following the Sept 11, 2001 attacks on the United States, Musharraf said growing anger and a feeling of deprivation in Muslim societies were fueling extremism and militancy, and this further diverted resources from economic development.

Income levels, growth rates, human and technological development are "disappointingly low" in the Muslim world, widening the gap further with western nations, he said.

The 57-member OIC covers one-fifth of the world's land mass, 70 percent of global energy resources and supplies 40 percent of global exports of raw materials. But Muslim states fail to convert their resources into economic achievements.

The OIC countries produce less than five percent of the world gross domestic product (GDP).

"The GDP of the entire ummah (Muslim community) is roughly 1.4 trillion dollars while that of Japan alone is 4.5 billion. The highest GDP of a Muslim country is 185 billion while that of tiny European countries with no natural resources is above 200 billion," Musharraf noted.

Reforming policies

The OIC attracted hardly 15 billion dollars worth of foreign investment each year, compared to 50 billion in China alone, he said. Only six countries account for more than half of OIC income and 22 out of the world's 49 least developed countries are in the OIC.

"The starting point for achieving growth has to be the reform of our domestic economic policies Unless our policies are market friendly and pro-business, it will be hard for us to promote intra-OIC trade or investment," he said.

"The key ares of reform of domestic policies include foreign investment laws, tax and trade regimes, currency and exchange control systems, corporate governance, stock exchanges and the judiciary."

Musharraf called for a joint economic and business team consisting of top officials and businessmen to speed up intra-OIC trade.

He urged the OIC to enhance cooperation with other regional economic groupings and proposed intra-OIC ventures in the areas of energy, agri-business, financial services, information and communication technology.

Big market

Veteran Southeast Asian leader Mahathir, who will retire as the Malaysian premier at the end of this month after 22 years in office, urged Muslim countries to industrialise and pool their resources to become a big market.

"We missed the industrial revolution completely and we are still not doing much to catch up. While we dilly-dally, the world of business is moving fast," he warned.

But he urged Muslim companies to "avoid greed like a plague" and called for the establishment of Muslim business schools to teach ethical trading practices based on Islamic principles.

"Going to war and colonising other countries in order to secure markets and resources should be rejected totally by us," he added. - AFP