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Almost all Islamic countries at different stages of economic growth are categorized as ‘less developed’. About 80 percent of the Muslim population lives in low income countries and a vast majority live in the most depressed regions of the world. Apart from other characteristic features of developing countries, Muslims in Islamic countries and also those living as cultural minorities in other countries, share a relatively higher incidence of poverty, low productivity and unemployment.

According to various estimates, the unemployment problem is likely to become more acute in the near future. Economic forecasts suggest that the total requirement for the next decade is around one billion jobs. This would imply increasing the total employment rate in the developing countries by more than 4 percent a year in the 1990s, compared with less than 3 percent in the 1980s. The ILO projection for the next decade holds no comfort. On present trends the growth of employment will continue to lag far behind that of both output and the labor force. In recent years the problem of unemployment has assumed the dimension of jobless growth which is regarded as a new and disturbing phenomenon.

While initiating the process of growth in developing countries, it was assumed that pursuing economic growth by increasing output would generate employment. However, this has not happened. Developing countries on an average experienced 4.5 percent growth in GDP during 1960-73, but employment grew by only half as much. The situation is worse in the depressed sub-Saharan region where a good number of Islamic states are located. Almost all countries in the region have an unemployment rate exceeding single digits. In Asia as well, countries like Pakistan, despite a respectable growth rate of more than 6 percent, have experienced unemployment rates above 15 percent. This can be attributable to the use of ‘capital-intensive’ methods of growth under which less than one-third of the increase in output in developing countries between 1960 and 1987 was associated with labor, and more than two- thirds from an increase in capital investment.’ Developing countries are now confronted with the serious problem of ‘jobless growth’. Policymakers the world over are searching for development strategies that combine economic growth with more job opportinies.

From  ECONOMICS OF SMALL BUSINESS IN ISLAM Articles

WRİTER: Mohammed Mohsin




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