The Organization of Islamic Conference (OIC), which is a delegate of fifty-seven Islamic nations, seeks, among many other noble goals, to bring unity amongst its member countries with a view to enhancing sustainable economic progress. Several related issues are seen to be important for OIC countries in order for them to achieve this goal. One of these is the “overall business knowledge” within these countries, which needs to be raised in order to promote entrepreneurship. The lack of overall business knowledge in many of these countries has deterred the successes of small businesses (especially the family businesses) as they lack adequate managerial performance. Islamic nations may model Indonesia and Nigeria’s relationship to establish more trading blocs to drive mutual economic development. In addition, to stabilize economies, central governments should update fiscal and monetary policies to support export and investment sectors while they proactively transit foreign investment flows from rent-seeking sectors to growth enhancing sectors. Furthermore, they should seek to diversify their investments and reduce reliance on the oil sector. Another factor that can inspire further development in OIC countries is internal investment in internet and telecommunications so that people can more efficiently communicate and gain access to knowledge. Last but not least, it is crucial to observe each nation from its unique socio-cultural, historical, and political perspective in order to enhance and facilitate economic cooperation among the bloc of OIC member countries.

In this context, the current issue of JECD includes eight articles which focus on: entrepreneurship, business skills, family business, intra-OIC trade, foreign direct investment, foreign aid, Islamic banking, information and communication technology, and economic growth and leadership attributes in the Arab region. A brief synopsis of each article is given below.

The first article, “Measuring and Comparing the Functional Business Skills and Knowledge among Entrepreneurs: Evidence from the Asnaf Community in Malaysia (Kelantan),” shows that the level of overall business knowledge (crucial for entrepreneurship, a promoter of economic growth and development) amongst the Asnaf entrepreneurs is moderately low. The research factored in the following skills to determine overall business knowledge: Financial Skills, Technical Skills, Communication Skills, Market Orientation, and Networking Skills. Furthermore, the distribution of these skills varies across the districts of Kelantan. Therefore, policy makers and other developmental organizations should focus on interactive programs in order to increase and stabilize the level of knowledge and skills among the Asnaf entrepreneurs across all districts (particularly in the district of Jeli).

The second article, “The Model of Capability Soft Governance in Family Business: Empirical Study in Bus Transportation Industry in Jakarta, Indonesia,” investigates the relationship between managerial trait from family business (the bus industry in Jakarta, Indonesia) and managerial performance. The study’s results displayed that low managerial performance triggered low continuity and proved that soft governance capability has an ability to mediate the relationship between casualties of managerial trait variable on the bus transportation industry in Jakarta. The results can be used to enrich further research on managerial performance, family business, and human resource management.

The third article, “Indonesia - Nigeria Foreign Economic Relations: A Partnership for Economic Development,” highlights a high and successful volume of bilateral economic agreements and trade between the Federal Republic of Nigeria and the Republic of Indonesia. In 2001, both countries signed an Economic and Technical Cooperation agreement for establishing a joint commission, with the aim of promoting relations in the following areas of mutual interest: economy, trade, investment, and technical cooperation. Since 2014, Nigeria has been Indonesia’s largest trade partner in Africa and Indonesia, in turn, has significantly invested in industrialization via the non-oil sector. Furthermore, the study concludes that Nigeria can learn from Indonesia by improving its drive for non-oil export towards facilitating economic development.

The fourth article, “Foreign Aid, Foreign Direct Investment and International Workers’ Remittances in Nigeria: Are they Complement or Substitute Investment?” examines the complementarity and substitutability effects of capital flows (foreign direct investment, foreign aid, and international workers’ remittance) on economic growth in Nigeria from 1970 to 2016. Findings proved that in terms of influencing economic growth: foreign direct investment and foreign aid are substitute investments; foreign aid and international workers’ remittances are complementary investments; and foreign direct investment and international workers’ remittance are substitute investments. The study recommended that the central government should facilitate the flow of foreign direct investment from the rent-seeking sector (oil) to growth enhancing sectors (manufacturing, service, tourism, and agriculture).

The fifth article, “Modeling the Effects of Macroeconomic Expenditure Components on Pakistan’s Import from China,” indicates a long run co-integration between Pakistan’s imports from China and the following macroeconomic expenditure components: personal consumption expenditure, investment expenditure, export expenditure, government expenditure, and relative price. Import demand was more sensitive to change in personal consumption expenditure. Investment expenditure had a negative impact on Pakistan’s import from China. In addition, export and government expenditures had significant positive impact on import demand, whereas the relative price was positive but insignificant. Therefore, restricting imports through exchange rate policy may not be significantly important in the long run. Furthermore, the fiscal and monetary policy should be designed to support investment and export sectors. In addition, the Pakistani government should reduce luxury items imports from China and revive free trade agreement to reduce its trade deficit.

The sixth article, “Does Islamic Banking favors Price Stability? An Empirical evidence from the GCC, Iran and Sudan,” shows the relationship between Islamic banking growth and inflation in the Gulf Cooperation Council (GCC), Iran, and Sudan during 2001-2015. Five out of seven countries considered in the study revealed that Islamic banking dampened domestic price inflation. Inflation inertia, monetary growth and exchange rate depreciation were the main factors that increased inflation in these economies. Also, while an increase in international food and oil prices increased domestic prices in certain countries, it dampened inflationary pressure in some other countries. This could be explained by government subsidies. The empirical results display a need for economic diversification and reduction on oil dependency. It also assesses a need for monetary authorities to implement tighten monetary policy.

The seventh article, “Information and Communication Technologies and Economic Growth: Evidence from EU and Turkey,” explores the impact of Information and Communication Technology (ICT) on economic growth in the European Union (EU) countries and Turkey from 1997 to 2014 using the growth rates of fixed telephone, internet and mobile telephones subscriptions as proxy variables. From static and dynamic panel data analyses, fixed telephone subscriptions and internet variables had a positive effect on economic growth. The results showed no statistically significant correlation with mobile telephone’s growth rate. As expected, there is a positive relationship of economic growth with physical capital growth but negative association with population growth.

The last article, “Leadership Concept and Constructs in Arabic Philosophy,” sheds light to differences in preferences and domain values amongst Arab countries; they are often considered globally as one society with one culture. The Arab countries experienced different types of colonialism, economic activities, geographical variables, tribal ethnic makeup, and ecological variables. And these differences influenced the preferred leadership style of each country. The study’s findings indicated how the concept of leadership in Arabic nations can be rooted in Arabic perspective and heritage to maintain effective leadership. In addition, this study extended a scholarly understanding of the measurement and examination of various leadership viewpoints by introducing established constructs for evaluating leadership.

As SESRIC, we will continue our efforts to make our Journal of Economic Cooperation and Development an opened window for academics and researchers within as well as outside the OIC members for sharing their valuable work and studies with all who are interested in the OIC member countries and the Islamic world at large through providing them with an opportunity to keep pace with the socio-economic developments in OIC member countries in the light of the changes taking place in the world economy.

Nebil DABUR

Editor-in-chief

Articles of the Journal of Economic Cooperation and Development, Vol.40 No.2 (2019)