Achieving Sustainable Development Goals (SDGs) is a common global development agenda that requires the active participation of multi-stakeholders to realise the goals by 2030, at national and international landscape. The SDGs are designed through an extensive consultative and comprehensive process that covers all countries-unlike the MDGs that were only designed for developing countries-with political will and reporting mechanisms on identified targets and indicators.
The SDGs consist of 17 goals, 169 targets and 241 indicators. The goals are comprehensively designed to broadly cover people, planet and prosperity in various possible dimensions to ultimately bring large scale and transformative changes in the lives of the people through sustainable and environmental friendly mechanisms.
Materialisation of the goals and targets require huge finance apart from technical and technological aspects. Approximately, 3-4 trillion US dollars is annually required until 2030, along with routine financing, to achieve SDGs.
Developing countries alone face an average annual funding gap of 2.5 trillion US dollars. These statistics reveal that only government interventions, to improve living standard of the masses and financing, will not be sufficient to achieve the goals.
Engaging private sector and philanthropic institutions are equally important to materialise the goals collectively.
The role of Islamic finance is important in multi-dimensions.
Islamic social and financial institutions are imperative to ensure economic inclusion and social justice at micro, meso and macrolevel
Muslims comprise around 24 percent of the world population, but less than two percent of the global financial assets are compatible with their religious faith. At the global landscape, around six percent of the adult population do not become customers of any financial institution because of mismatch of available financial products and services and religious faith. The figure rises, 11 percent, in the OIC member countries. Consequently, unavailability of faith compatible financial products and services cause voluntary financial exclusion, which is becoming a hurdle in access to finance particularly, in Muslim dominant societies. The deployment of Islamic finance solutions can attract millions of those who voluntarily withdraw from the financial system for religious reasons.
Facilitating investors and depositors with faith based financial products and services will accelerate the journey of enhanced financing opportunities for both-investor and depositors at one hand, while increase economic growth at the national level on the other.
Increasing financial access facilitates day-to-day living and helps families and businesses plan for everything from long-term goals to unexpected emergencies. As accountholders in Islamic finance institutions increase this will ultimately increase demand for other financial products and services, such as Islamic insurance and Islamic consumer financing products because people are more likely to use other financials too.
Access to desirable financial services increase the choices of people to start and expand businesses, invest in education or health, and manage risk and financial shocks, which can improve the overall quality of their lives.
Availability of financing for financial needs, given that when social needs are appropriately taken care of, has a tremendous role to achieve all SDGs in general and SDG one, two, three, five, nine and ten (no poverty, zero hunger, good health and well-being, gender equality, industry innovation and infrastructure and reduced inequality respectively) in particular. Islamic finance is pro-development and a vehicle for shared prosperity (which is a big challenge, particularly for capitalist countries). Islamic social and financial institutions are imperative to ensure economic inclusion and social justice at micro, meso and macrolevel.
The writer is an assistant professor of Economics at the Institute of Management Sciences, Peshawar