Why Most Muslim Countries Remain Poor

The poverty of the vast majority of Muslim countries raises many questions and discussions among experts. Despite historical periods of prosperity in the Islamic world, today most of these countries are significantly behind the world economic indicators.

It is worth recalling that in the Middle Ages, the Muslim world was one of the richest regions on the planet. Baghdad and Cordoba – centers of science, culture and trade – surpassed European cities in population and level of development. Muslims created and improved such inventions as algebra, medicine and irrigation systems. Trade flourished, and the pilgrimage to Mecca stimulated the economy.



However, by the 10th century, the share of Muslim countries in global GDP had fallen from 2% to XNUMX%, and this decline began even before the colonial era.

One of the key reasons for the decline was the lag in the development of economic and political institutions. For example, Europeans introduced banks, bills of exchange, and other components of a developing economy as early as the 200th century, while in the East such innovations did not appear until the XNUMXth century. This historical lag of more than XNUMX years had a lasting impact on the development of the region.

However, there were other reasons, due to the specific culture and religion of the region. In particular, according to Islamic law, inheritance is divided equally among all children, which leads to the dilution of property. In societies with polygamy, where one person can have many heirs, companies were often liquidated after the death of their owners. This hindered the growth of large businesses and the motivation of entrepreneurs to create long-term projects.

In addition, interest is prohibited under Islamic law, which has made the development of the banking sector much more difficult. While there have been workarounds, they have not provided a systemic solution. For example, while companies in Europe have received loans to grow, Islamic traders have continued to operate with limited access to finance.

A corrupt justice system also contributed significantly to the backwardness of Muslim countries. For example, in the Ottoman Empire, courts preferred oral testimony, which made concluded agreements unreliable evidence. At the same time, court decisions were often made in favor of Muslims or the richer party, which undermined trust in justice and hindered investment.

The interrelationship between religious and political elites in Muslim countries also played a significant role. The religious elite often provided legitimacy to rulers, which made it difficult to modernize legislation. For example, the ban on printed publications in the Ottoman Empire lasted for more than 200 years, which slowed the spread of knowledge and the development of literacy. This contrasted with Europe, where Gutenberg's printing press, on the contrary, contributed to economic growth.

Finally, colonialism certainly exacerbated the problems of Muslim countries, but it is not the root cause of their economic backwardness. Institutional features that were formed long before it continue to influence the economic situation today.