Can Pakistan be interest-free? Ishaq Dar certainly seems to think so. Whether the State Bank has a strong road map or will it be another botched affair, only time will tell. Meanwhile, the world has taken notice of the advantages of Islamic finance.

Islamic finance has be­­come systemically important in Asia and the Middle East, while the global issuance of Sukuk is expanding with remarkable international reach of issuers and investors, says an article by the IMF. As the Shariah-compliant system is expected to continue growing in double-digits, IMF has developed mechanisms to better understand and adapt to it.

Nor are Muslim-majority countries the only ones thinking about it. The UK government issued its second Sukuk in 2021. And in July last year, Australia’s first fully-fledged Islamic bank received its license to operate, according to Refinitiv Islamic Finance Report 2022.

Furthermore, there is a natural synergy between the intrinsically-ethical Shariah principles and Sustainable Development Goals (SDG).

According to World Bank, Islamic finance has significant untapped potential as non-traditional source of financing for SDGs.

Published in Dawn, The Business and Finance Weekly, February 13th, 2023