Research Proposal: Opportunities for Substituting Islamic finance in the development of intra-Mediterranean trade
When examining the reality of Mediterranean trade relations, it is evident that the group of its actors is not united by a clear strategic vision, but the concept of intra-trade for them stops at the limits of the gains earned by bilateral exchanges.
The limitation of this idea does not fit with the importance of the location of the Mediterranean.
Mohammed Abdessamed Abdelbassit LAIMECHE
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Rather, the Mediterranean Partners should give serious thought to liberalizing multilateral trade and work to pass traditional tools and move forward to get mechanisms that allow expansion of business, diversification and encouraging dealers to engage in a regional commercial community.
Creating such an economic pattern requires building a dynamic trade finance policy, attracts capital and provides sufficient liquidity requirements.
This can only be done by taking into account all financial services and tools and work to evaluate them and determine the possibility of employing them in the Mediterranean commercial space to serve the interests of commercial partners and commensurate with the commercial belief of each customer.
Speaking of belief and faith, it is important to point out that a broad section of the inhabitants of the Mediterranean subject business to financial rules consistent with their mental and belief principles, and that have produced a financial system that has proven worthy during the past decades.
The efficiency which the Islamic finance system appeared with, pushed it forward to occupy a prominent place in the global financial systems, and made it a reliable alternative in maintaining the stability of global markets and increasing the development of societies.
In this context we can cite many achievements of Islamic financial institutions such as the Islamic Development Bank, which was able to establish specialized agencies in several fields, such as supporting small and medium enterprises, securing investment or financing international trade.
Despite the expansion of the activity of this body and its inclusion in the group of Islamic countries but when examining the Islamic financial phenomenon, we find that it is limited in financing operations in the African and Asian continents, and it did not intend to interfere in other geo-economic spaces such as the Mediterranean region.
This issue cannot continue in the same way if we take into account several considerations related to China’s economic rise and its inclusion in the Mediterranean as part of its plan to build modern trade routes and without forgetting the energy discoveries in southern Cyprus and the acceleration of political events in the Arab and European regions.
These things will, of course, have a major impact on the creation of new Mediterranean trade paths which will also reshape the concept of intra-regional trade, and It is precisely in this sense that this thesis examines the possibility of benefiting from and employing Islamic financial instruments in order to develop intra-Mediterranean trade.
The research process in this question requires a systematic transition through a set of sub-questions that facilitate the study and set its stages. These questions are reflected in:
- How can the current trade trends in the Mediterranean be depicted?
- What are the legal forms and regulatory frameworks for Islamic finance?
- To what extent can Islamic finance tools be replaced in the Mediterranean commercial markets?
- How efficient are Islamic financial institutions in exploiting business opportunities in the Mediterranean?
- What are the gains made as a result of adopting Islamic finance in financing inter-trade on average?
Objectives of the study:
This research aims mainly to answer the questions mentioned in the previous section, and this work seeks to:
- Diagnosing the reality of international trade in the Mediterranean and examining the conditions that prompted the formation of intra-trade exchanges today.
- Determine the impact of the use of Islamic finance on the development of commercial exchanges between Mediterranean countries.
- Defining the general framework for the use of Islamic finance in international trade finance operations.
- Clarify the general framework of Mediterranean trade financing operations and the opportunities to replace Islamic finance within the total financing mechanisms in the region’s trade.
- Evaluating the experiences of Islamic finance for global and regional trade and exploring the possibility of expanding the Islamic financing framework for developing trade in the Mediterranean.
The choice of this research is due to a set of objective justifications, which can be summarized as follows:
- International trade is considered one of the most required topics for research, because the problem of financing is always renewed due to the expansion in international financial activities and the intense competition in financial markets. In addition, the idea of employing Islamic finance in the Mediterranean trade is not widely accredited and needs more research in it in order to Its development.
- As for the personal reason, it is by virtue of a specialist in the commercial field from the stage of undergraduation, In the Master, I moved to the study of public finance and financial management. I have worked on several topics related to financing in banks. Through this research, I would like to focus in the field of international trade and link between research in it and research in the fields of finance in order to restore the pedagogical path that I specialized in at the beginning of my academic career.
The limits of the study:
In the beginning, attention was paid to the topic in general and theoretical, and this is because it is necessary to familiarize yourself with the nature of Islamic finance as well as the mechanisms for financing international trade in general, so that the study is later defined spatially in the Mediterranean.
Concerning the time frame, it is determined by the years following the year of the global financial crisis (2008), after which the Islamic finance was expanded, and the way was opened for banks in many Western countries to finance their operations using Islamic tools. From this point, an evaluation of the possibility of using these tools to finance intra-Mediterranean trade is initiated.
There may be a return to earlier periods of time and this is to put some issues in their historical context.
Previous studies on intra-Mediterranean trade:
By virtue of modernity that characterizes the subject, and according to my knowledge, within the limits of my scientific material, the idea of Islamic finance for trade on average, was not addressed before, but topics of international trade finance using Islamic finance were researched. In this context, you find many articles, research papers and theses, but they did not touch on financing Mediterranean trade, or did not cover the aspects of its relationship to the concept of developing intra-Mediterranean trade between the Mediterranean countries.
To achieve the goal of research, based on its nature, the analytical descriptive approach corresponding to the study was adopted. So that it is in line with the process of presenting the subject’s preliminary foundations and the use of the archive.
Then an inductive approach was used that is appropriate for data collection and analysis
Last but not least, a deductive approach based on the transmission of thought from principles to results was adopted in a purely rational way.