Finance ministers and business leaders from the Muslim world will meet in the Malaysian capital this week to devise ways to lift their countries out of poverty by unleashing their untapped economic potential.

Malaysia is leading the charge for a focus on the economy as a means to bring development and prosperity to troubled Muslim-majority nations, and drain support for radicalism and conflict.

Kuala Lumpur will play host to a range of meetings on the Islamic finance and information technology sectors, including a major trade forum for the 57-nation Organisation of the Islamic Conference (OIC).

The annual meeting of the board of governors of the Islamic Development Bank (IDB), the OIC's investment arm, will be the centrepiece of the week's program.

The governors, mostly finance and economic ministers, are expected to approve a 10-year global masterplan to help their countries develop their Islamic financial services sectors when they meet on Thursday and Friday.

They will also launch a trade financing body with capital of US$3billion to encourage trade development among members.

Halipah Esa, coordinator of the IDB meeting and deputy secretary general of Malaysia's finance ministry, said delegates will focus on how to convert the wealth of resources held by OIC nations into better living standards.

"We are trying to fill up stomachs. People must have food on the table, clothing and money for children to be educated," Halipah told AFP.

"If you look at the world, it associates Islam with poverty and backwardness and terrorism, but we want to showcase Malaysia as a progressive nation. Being a Muslim means you can still progress," she said.

Stemming terrorist networks

Muslim leaders are increasingly acknowledging the need to tackle poverty as a means of stemming terrorist networks and addressing festering security issues.

Pakistan's President Pervez Musharraf said during a visit to Canberra last week that greater Australian investment in his country would help ease the poverty that drives people into militant groups.

"When you assist us in our industry you are indirectly assisting us in fighting terrorism," he said.

Malaysia, the current chair of the OIC, has been pushing for closer economic integration in the grouping and for nations to develop their Islamic finance sectors as a way of strengthening their economies.

Prime Minister Abdullah Ahmad Badawi is expected to urge the grouping, which has been accused of being too disparate in its views, to refocus its efforts away from politics and towards social and economic development.

Malaysia, the first nation to launch Islamic bonds, hopes to help other Muslim nations - particularly those from the Middle East - launch financial instruments based on Sharia laws.

Although Muslims make up 15 percent of the world's population and OIC members possess 60 percent of global natural resources, trade between them only accounts for seven percent of the global total, according to Malaysian officials.

A lack of leadership in the OIC, traditionally dominated by Arab nations, as well as geopolitical strife, has held back the grouping, analysts say.

Major challenge

And while the IDB, which this year celebrates the 30th anniversary of its founding, has achieved some success in its multilateral efforts, much relies on the political will of OIC members to make substantial contributions.

So far, "Muslim countries have been lacking in economic integration and cooperation," said Abdul Rahim Abdul Rahman, director of the Institute of Islamic Banking and Finance at Malaysia's International Islamic University.

Meanwhile the poverty gap between rich and poor OIC countries continues to be a major challenge, with critics saying that little investment flows from more wealthy members to their lesser-developed brethren.

Many Middle Eastern nations have also developed an over-reliance on their oil industries, while underdeveloped financial sectors have contributed to lacklustre development.

"The future is not only petrol dollars, they need development of the financial system as a whole, which needs cooperation from governments and central banks," said Abdul Rahim.

"They need to develop Islamic capital markets and equity markets as well as systems of governance," he added.