Islamic nations are a significant part of the world economy Essay Example

These are the foundations on which most Islamic countries conduct business too and there fore it is extremely important to have a good understanding of them. In Prophet Muhammad’s time business was considered to be not only acceptable but a dignified profession.

In most capitalist economies, market forces determine the price of commodities and in such societies the desire to maximize gains may not always be obtained. Islam is in favor of the market system but the operational reality of such a system may not actually fit in an ideal Islamic society. Islam like most other major religions places a great deal of emphasis on morality and ethics in every sphere of life. Professional transactions and business too comes under this purview.

Business is a socially useful, morally justified and religiously encouraged economic activity.  Islam actively encourages the creative ideas, productive efforts, and the creation of surpluses provided that the given frameworks and guidelines are adhered to. Islam in fact can be said to encourage a kind of liberalization of trade where all private and public sector decisions pass through a filter of moral values before they are made subject to the discipline of the market. For countries and organizations wanting to conduct business with Islamic countries a few important considerations should always be kept in mind. Cultural considerations include understanding the role of women in business which is tied to religion, especially in Middle East, where women do not function as they would do in the West.

This affects the conduct of business in various ways, for example, the firm may be limited in its use of female mangers pr personnel in these markets. Further, the women’s

role as consumers and influencers in the consumption process may also be different. Religion impacts goods and services as well. When beef or poultry is exported to an Islamic country, the animal must be killed in the “halal” method and certified appropriately. The recognition of religious restrictions on products such as alcoholic beverages can reveal opportunities as seen by the successful launches of non-alcoholic beverages in the Middle East. There's also evidence that those western corporations that have done well in the Islamic world have done so not by offending local sensibilities, but by catering to them.

Adaptations which take into account local customs and beliefs are necessary for profitable businesses.Most Islamic countries are rich sources of primary goods with a high degree of state intervention and regulation in markets. The refusal to intervene in a business transaction underlines a belief in free markets tempered with a judicial mechanism that heard cases of theft, wrongdoing and cheating and disposed them urgently. The application of torts in Islamic jurisprudence further emphasizes the importance of a legal substructure important to keep an economic order going. Also, by making it obligatory on each well-to-do individual to himself give two and half percent of wealth to the needy, the onus on redistribution also was placed on the individual.The Islamic intelligentsia is divided into three different attitudes toward globalization (Najjar, 2005).

There are those who reject it as a "cultural invasion," threatening to control people, undermine their distinctive, cultural personality and destroy their beliefs and national identity. The second opinion welcomes globalization as the age of modern science, advanced technology, global communications and knowledge-based information. It realizes that people cannot be enveloped

within their own boundaries and calls for interacting with globalization and benefiting from its "positive opportunities" in knowledge, science and technology. A third group calls for finding an appropriate form of globalization that is compatible with the national and cultural interests of the people.

Globalization cannot be wholly accepted or rejected, it argues. The attitude of this group has been described as "positive neutrality," a self-interested pragmatic outlook, seeking a middle ground.Four major issues that most Islamic countries need to address include:

(1) an uneven and often insufficient knowledge base,

(2) a lack of empowerment of the female population,

(3) an absence of participatory governance,

(4) the prevalence of ethnic conflicts.Organizations seeking to do business with countries would also necessarily have to look at these issues.

Many Muslim countries now have low penetration rates for electronic commerce technologies, and the development of technical standards to support automated transaction processing in a manner that conforms to Islamic law does not appear to be a policy priority in those countries. If such standards are developed, then strategy and relative bargaining power will determine whether secular Western organizations wishing to trade with Islamic organizations are required to implement both Western and Islamic technologies in order to gain access to markets in Islamic nations, or organizations in Islamic nations are required to implement both in order to gain access to global markets.

Historical achievements of Islam are a good indication that Islamic values are not anti-growth per se. Islam encourages education for both men and women; it promotes the rule of law, and advocates fairness, social justice, and positive form of freedom. In modern economic terms, Islam facilitates the development of social and human capital through

promotion of socioeconomic rights for all Muslims. Furthermore, Islam favors free trade and commercial activities that induce economic growth.

The major factors that come to our mind when talking about doing business with Islamic countries are not just cultural but also socio-political in nature. Language skills, cultural knowledge and understanding; knowledge of business practices and protocols and an intimate knowledge of consumer tastes and preferences is essential.