Planning Minister Ahsan Iqbal has emphasized the vital role of Islamic finance in fostering sustainable economic growth and addressing global challenges, particularly climate change. Speaking as the chief guest at the 4th World Islamic Finance Forum, organized by the Institute of Business Administration (IBA), Iqbal underscored how Islamic finance offers unique solutions to some of the world’s most pressing issues, such as environmental sustainability and social justice.
The forum, held under the theme “Islamic Finance, Innovation, Climate Finance, and Sustainable Growth,” brought together experts from around the world to explore the growing importance of Islamic finance in the global financial system. Iqbal highlighted the Islamic finance industry’s projected growth to over $6 trillion by 2027, as outlined in the 2023 Islamic Finance Development Report. He pointed out that Islamic finance is rooted in the ethical and sustainable principles of Sharia law, which prioritize social equity, risk-sharing, and environmental sustainability.
Unlike conventional finance systems, Islamic finance is built on principles such as profit and loss sharing (through Mudaraba and Musharaka), the prohibition of interest (Riba), and a strong focus on social responsibility through charitable practices like Zakat and Waqf. These ethical frameworks ensure that economic activities are tied to real assets and promote shared risk, which contributes to poverty alleviation and economic justice. Iqbal noted that contributions from Zakat and Waqf alone exceed $1 trillion annually, underlining the social impact and scalability of these initiatives.
Iqbal also stressed that Islamic finance is becoming increasingly relevant in addressing climate change. He pointed to the growing issuance of green sukuk, a Sharia-compliant financial instrument used to fund sustainable projects. According to Iqbal, global green sukuk issuance surpassed $20 billion in 2023, financing projects in renewable energy, sustainable agriculture, and green infrastructure. He specifically highlighted Indonesia’s $2.5 billion green sukuk issuance and Malaysia’s leadership in the green finance space. These developments reflect the expanding role of Islamic finance in supporting climate action and sustainable development globally.
During his address, Iqbal also praised the Pakistan Stock Exchange (PSX) for its strong performance in 2024. He congratulated the exchange for achieving over 60% growth during the year, a remarkable milestone for Pakistan’s financial markets. The minister attributed this achievement to the broader economic reforms and stability being cultivated in the country.
He emphasized the importance of four key factors—peace, political stability, consistent policies, and commitment to reforms—necessary for Pakistan’s national development. “Pakistan needs these four pillars more than ever,” he said. Iqbal acknowledged the country’s shifting economic landscape, where the focus has moved from political ideologies of the past to the economic competition of the 21st century.
Iqbal also announced the upcoming National Economic Transformation Plan, which will emphasize export-led growth and the branding of “Made in Pakistan” products on the global stage. He highlighted that no Pakistani company currently exceeds a $2 billion valuation, stressing the importance of connecting to global supply chains to ensure economic survival.
In closing, Iqbal expressed gratitude to political parties for their support in implementing these reforms, which have contributed to reduced inflation, rising IT exports, and improved international ratings. He reiterated the need for Pakistan to embrace innovation and sustainable practices to thrive in the global economy.