PROMOTING PROSPERITY: THE ISLAMIC DEVELOPMENT BANK AND THE RISE OF ISLAMIC BANKING AND FINANCE IN CENTRAL ASIA
Geoffrey F. GRESH
Geoffrey F. Gresh, Doctoral student in international relations at the Fletcher School with concentrations in Southwest Asia and Islamic Civilization, International Security Studies, and Maritime Studies; former Editor-in-Chief of Al-Nakhlah, the Fletcher School of Law and Diplomacy’s Journal on Southwest Asia and Islamic Civilization; former Rotary Ambassadorial Scholar to Turkey and Presidential Fellow at the American University in Cairo (Medford, U.S.)
Islamic banking and finance is on the rise and taking root in Central Asia. Since the collapse of the Soviet Union and formation of new nation-states in 1991, Muslim republics in the region have witnessed a significant increase in Islamic financial institutions. Moreover, Islamic banking and finance has been viewed by Islamic scholars as an innovative way for the former Soviet republics of this region to form an economic bloc with other Islamic countries outside of Central Asia, ultimately leading to a greater market advantage in a competitive global economy. One of the keys to accessing global markets is by sponsoring national and regional socioeconomic development, and liberal economic reform. The prevailing Soviet legacy in these Muslim republics, especially the notion of a centrally-planned economy, has greatly hindered such development. However, with the advent of Islamic banking and finance, the Muslim republics of Central Asia and the Southern Caucasus have already experienced a significant boost in socioeconomic development that will hopefully continue long into the future.
Throughout the twentieth century, Islam was an important cultural and religious outlet for the people of Central Asia despite its repression under Communist rule. As the Muslim republics of this region grow more exposed to new forces of global change, including market forces, a communications and………….