UDC 339.7:339.9:330.342(100); JEL F65, G20, Z12, O16, P43
Zapukhlyak, V. Z., & Zastavnyy, A. R. (2024). Islams'ki finansy v hlobal'niy ekonomitsi: sotsial'no-ekonomichna rol' [Islamic finance in the global economy: socio-economic role]. In Sotsial'no-ekonomichni problemy suchasnoho periodu Ukrayiny [Socio-Economic Problems of the Modern Period of Ukraine]: Vol. 168 (4) (pp. 65-72). DOI: https://doi.org/10.36818/2071-4653-2024-4-10 [in Ukrainian].
Sources: 15

Authors



Zapukhlyak Vitaliy Zinoviyovych

Ph.D. of Economics

Doctoral Postgraduate of the Department of international economics of the Western Ukrainian National University

Contacts: vitaliyzapukhlyak@gmail.com, v.zapukhlyak@gmail.com

Webpages:

Zastavnyy Andriy Romanovych

Doctor of Philosophy

Lecturer of the Department of political science and philosophy of the Academic Institute of International Relations n.a. B. D. Havrylyshyn of the Western Ukrainian National University

Contacts: a.zastavnyy24@gmail.com

Webpages:

Resume

The article argues that the impact of globalization transformations on the socio-economic development of countries requires reforming financial systems and promoting financial inclusion. The search for alternatives to the traditional financial system, one of which is Islamic finance, is explained. The process of formation and development of Islamic finance is analyzed, and the role of the first Islamic financial institutions in these processes is determined. The specifics of the functioning of the Nasser Social Bank (Egypt), which still directs its projects to support the social and economic development of the population, are revealed. Research and educational institutions dealing with Islamic finance are systematized. The interest of Western banks and financial institutions in Islamic finance is substantiated. Islamic finance forms regional clusters, with the leading centers being the countries of the Gulf Cooperation Council (GCC); Malaysia (the leading center of Islamic finance in Southeast Asia); Indonesia (successfully integrating the principles of sustainable development into the field of Islamic finance); North Africa (using Islamic finance instruments to stimulate economic development and attract investment); the United Kingdom (the financial hub of Islamic finance in the West). The results of the rating of Islamic financial institutions in the world according to Global Finance are analyzed. The activities of the Kuwait Finance House Group recognized as the best Islamic financial institution are examined, and its main strategic initiatives in 2023, as well as social projects, are identified. A hypothesis about the impact of Islamic finance on the economies of countries is put forward; the sample consisted of 12 countries characterized by the development of Islamic finance. The size of Islamic banks’ assets, the volume of Sukuk and Takaful markets, and the share of Islamic finance in the banking system were chosen as the main independent variables; the GDP and GDP per capita were chosen as the dependent variables. Based on the division of countries into two groups according to the share of Islamic finance in the banking system, the authors find that the group with a share of Islamic finance of more than 20% has a significantly higher GDP per capita, which indicates a higher well-being of citizens in these countries. The Sukuk and Takaful markets also show higher values in the group with a higher share of Islamic finance, indicating increased activity in Islamic financial markets in these countries. Using the methods of correlation analysis, the dependencies between the studied indicators in this group of countries are established. The results indicate the untapped potential of Islamic finance to improve the well-being of citizens. The need to direct the resources of Islamic finance to the development of infrastructure and social projects is emphasized. The importance of introducing innovative instruments of Islamic finance, which will promote financial inclusion and attract investment in socially important projects, is substantiated. The key strategic directions for the further development of Islamic finance that will have an economic and social effect are suggested.

Keywords:

global economy, Islamic finance, socio-economic development, welfare, sustainable development, investment, financial inclusion