Islamic Monetary System and Its Role in Advancing Macroeconomic Growth in OIC Countries

Abstract

The Islamic monetary system, grounded in sharī‘ah principles, has emerged as an alternative model offering ethical and stability-oriented solutions to the macroeconomic challenges facing countries within the Organization of Islamic Cooperation (OIC). Conventional monetary systems are often criticized for promoting speculative behavior and exacerbating financial crises, prompting growing interest in Islamic frameworks that emphasize ribā-free finance, asset-backed transactions, and socio-economic justice. This conceptual paper explores the theoretical relationship between the Islamic monetary system and macroeconomic growth in OIC countries. The research employs a qualitative, document-based methodology drawing on contemporary literature, international policy reports, and classical Islamic economic theory. Findings suggest that the implementation of an Islamic monetary system—rooted in instruments such as zakāt, sadaqah, and muwāla‘ah-based financial intermediation—may positively influence economic stability, wealth distribution, and investment productivity. However, institutional readiness and legal integration across member states vary significantly, influencing the system’s macroeconomic impact. This paper contributes to ongoing scholarly debates on post-crisis monetary reforms and calls for greater policy harmonization among OIC countries to enhance the operationalization of Islamic monetary principles. The study’s insights are expected to support academics, policymakers, and financial regulators in developing an integrative approach to sustainable economic development.