islamic tourism: factors that influence muslim tourist and how to promote tourism in oic countries

Intra-trade in

OICEdited by

Abdelrahman Elzahi Saaid Ali | Abdul Ghafar IsmailIslamic Research and Training Institute, IDB

Rosylin Mohd. Yusof | Nor Hayati AhmadUniversiti Utara Malaysia

Intra-trad

e in

OIC

Islamic Research & Training InstituteMember of the Islamic Development Bank Group

Islamic Research & Training Institute (IRTI)Member of the Islamic Development Bank Group

8111 King Khalid Street, Al Nuzlah Al Yamaniyah Dist.Jeddah 22332 – 2444, Kingdom of Saudi Arabia

t: +966126361400 • f: +966126378927 • e: i r t [email protected] .org

The high rate of unemployment and slow economic growth in most

member countries of the Organization of Islamic Cooperation

(OIC) have spotlighted the importance of trade among these coun-

tries in fostering inclusive growth in the long run. Many OIC coun-

tries share common social and political customs, and own diverse

resources and huge populations. Therefore, intra-trade might help

reap economies of scale, expand markets, reduce the countries’

dependence on traditional trading partners, and raise their

resilience against external shocks.

This book comprises of papers written on intra-trade issues high-

lighting the importance of identifying and removing obstacles to

further promote trade among OIC countries. The book analyses a

broad spectrum of issues ranging from level of entrepreneurship,

problems and prospects of Islamic trade promotion, Islamic common

market, costs minimization, business incubators, halal business,

exchange rate fluctuations, real estate investment, and others. The

book also provides recommendations for governments and policy -

makers to design policies to support trade promotion, business

incubators, entrepreneurs, and sustainable economic development

among OIC countries.

3233367899609

ISBN 978-9960323336

52000 >

***OIC-CVR-Press-11.8.17 10/9/17 22:00

Intra-trade in

OICEdited by



Intra-trad

e in

OIC

























3233367899609

ISBN 978-9960323336

52000 >

***OIC-CVR-Press-11.8.17 10/9/17 22:00 Page 1

INTRA TRADEIN

OICEdited by

Abdelrahman Elzahi Saaid AliIslamic Research and Training Institute

Abdul Ghafar IsmailIslamic Research and Training Institute

Rosylin Mohd. YusofUniversiti Utara Malaysia

Nor Hayati AhmadUniversiti Utara Malaysia


***OIC-Press-FINAL-3.10.17 3/10/17 15:09 Page 1

© Islamic Development Bank, 2017

All rights reserved. No part of this publication may be reproduced,stored in a retrieval system or transmitted in any form or by anymeans, electronic, mechanical, photocopied, recorded, or otherwise,without the prior written permission of the copyright holder, exceptfor reference and citation, with proper acknowledgment.

King Fahad National Library Cataloging-in-Publication DataAli, Abdelrahman Elzahi Saaid

Intra Trade in OIC. / Abdelrahman Elzahi Saaid Ali -Jeddah, 2017

..p ; ..cmISBN: 9960-32-333-1

1- Commerce 2- Trade I-Title382.104 dc 1438/8282

L.D. no. 1438/8282ISBN: 9960-32-333-1

D I S C L A I M E R

This is a non-binding document and the views expressed in this bookare those of the authors. The views do not necessarily represent theofficial stance of the Islamic Research and Training Institute (IRTI),the Islamic Development Bank or its Executive Directors and thecountries they represent.

Design & typeset [email protected]

London, UK


Preface

THE 57 MEMBER COUNTRIES of the Organization of Islamic Cooperation(OIC) constitute a substantial part of the developing countries, and, being atdifferent levels of economic development, they do not make up a homogeneouseconomic group. Undertaking an overall comparative analysis for the OIC groupas whole is, therefore, rather difficult and it would be misleading since it mayconceal some underlying factors. The first group includes the least-developedOIC member countries, hereafter, referred to as the OIC-LDC. This groupincludes the 22 OIC member countries which continued to be identified by theUnited Nations as the Least-Developed Countries. These are Afghanistan,Bangladesh, Benin, Burkina Faso, Chad, Comoros, Djibouti, Gambia, Guinea,Guinea-Bissau, Maldives, Mali, Mauritania, Mozambique, Niger, Senegal,Sierra Leone, Somalia, Sudan, Togo, Uganda and Yemen.

The second group comprises the OIC fuel-exporting member countries,hereafter, referred to as the OIC-FEC. These are Algeria, Azerbaijan, Bahrain,Brunei, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Oman, Qatar, Saudi Arabia,Turkmenistan and the United Arab Emirates (UAE). The third group includesroughly the middle-income OIC member countries and will be named “themedium-developed OIC countries”, hereafter, referred to as the OIC-MDC.These are Albania, Cameroon, Côte d’Ivoire, Egypt, Guyana, Indonesia, Jordan,Kazakhstan, Kyrgyz Republic, Lebanon, Malaysia, Morocco, Pakistan,Palestine, Suriname, Syria, Tajikistan, Tunisia, Turkey and Uzbekistan.

One of the notable sources of economic development is the volume of trade ofgoods and services. The volume of intra-trade among the OIC member countriesis very encouraging. For this reason, we took an effort to organize a thematicworkshop on “Intra Trade in the Organization of Islamic Cooperation Countries:Removing Obstacles and Promoting Trading Business”. The selected papersfrom this workshop are compiled in this edited book.

This book comprises of papers written on intra trade issues highlighting theimportance of identifying and removing obstacles to further promote tradeamong OIC countries. The book galvanizes thoughts, discussions and analyseson a spectrum of issues ranging from level of entrepreneurship, problems andprospects of Islamic trade promotion, Islamic common market, costs minimi -

3


PREFACE

4

zation, business incubators, halal business, exchange rate fluctuations, real estateinvestment and others. Various methodologies are employed by authors todocument evidences and to recommend and propose solutions to furtherstrengthen strategic business collaborations and promote intra trade among OCcountries.

The book also present some of the key findings of the workshop which include:exchange rate stability as a pre-requisite variable triggering the engine of growthin exports and imports matters; the need to examine Islamic common market inlight of new data and changed global perspectives; and emphasis on a stableplatform to enhance expertise in key areas such as project feasibilities, acquiringbusiness operations knowledge, and experi ences and characteristics of theincubation industry. The book concludes with some recommendations and policyramifications for government and policymakers to design policies on successfulimplemen tation in trade promotion, business incubators, entrepreneurs, andsustainable economic development among OIC countries.


5

Contents

Preface ... 3

Part I: Introduction

1. Beyond 20 Percent OIC Intra-Trade Target ... 10Ismaeel Ibrahim Naiya | Musa Jega Ibrahim

2. The Problem of Ummah Integration: Conceptual and Empirical Work ... 37Masudul Alam Choudury

Part II: Determinants and Obstacles for Intra Trade

3. The Entrepreneurship Growth and Obstacles in Open Trade: A CaseStudy of Pakistan in Comparison with India and Malaysia ... 66Malik Shahzad Shabbir

4. Forecast and Determinants of Indonesia’s Export to the OIC MemberCountries ... 80Nur Azizah | Irfan Syauqi Beik

5. Determinants of Trade Cost and its Minimization to Enhance OICIntra-Trade ... 101Lakhi Muhammad | Gul e Rana

6. Islamic Trade Promotion: Problems and Prospects ... 109Md Abu Sina | Md Abdus Sabur

7. Islamic Tourism: Factors that Influence Muslim Tourists and How toPromote Tourism in OIC Countries ... 131Rininta Nurrachmi

8. Challenges Facing Intra-OIC Trade in North African Countries ... 140Abdelrahman Elzahi Saaid Ali


9. Impacts of Exchange Rate Fluctuations toward Export and ImportPerformance in Selected OIC Member Countries ... 156Masyhudi Muqorobin | Dimas Bagus WiranatakusumaFaiza Husnayeni Nahar | Irfan Altaf ArnurMuhammad Anif Affandi

Part III: Business Models for Trade Promotion

10. Enhancing the Role of Networked Business Incubators as aCatalyst for Promoting Intra-OIC Trade ... 184Amer Maraqa

11. The Prospect of an Islamic Common Market ... 209M. Kabir Hassan | Benito A. Sanchez | Jeniffer Brodmann

12. Regulation and Standardization of Halal in Promoting Intra-OICTrade ... 256Abdul Ghafar Ismail | Mohd Ali Mohd Nor

13. Addressing Governance Issues in Islamic Real Estate InvestmentTrusts (I-REITs): A Case Study of Malaysia ... 268Zaemah Zainuddin | Nohafiza Nordin

Part IV: Other Issues

14. Turkish-Egyptian Political Economic Relations: A ComplexInterplay Between Power and Wealth ... 282Alhussien Al Nanaa | Norafidah Ismail

15. Intellectual Property Protection: Between Choice and Obligations... 304Ratnaria Wahid

16. Piracy and Armed Robbery in the Strait of Malacca: Impacts onInsurance and Shipping Industry ... 320Salwani Arbak | Nik Nor Suhaida Ali

6

CONTENTS


Chapter Notes ... 333

7

CHAPTER NOTES / LIST OF CONTRIBUTORS


List of Contributors

Abd elrahman Elzahi Saaid ALI, PhD. Associate Professor of Banking and Finance, Islamic Research and Training Institute, Islamic Development Bank, Jeddah, KSA. Email: [email protected]

Abdul Ghafar Ismail, PhD. Professor of Banking and Finance, Islamic Research and Training Institute, Islamic Development Bank, and Center for Islamic Economics and Finance, Universiti Kebangsaan Malaysia. Email: [email protected]

Amer Maraqa. Department of Management and Organization, Marmara University, Istanbul, Turkey. Email: [email protected]

Alhussein Al Nanaa. School of International Studies, Universiti Utara Malaysia.

Benito A. Sanchez, Ph.D. Associate Professor of Finance, Department of Economics and Finance, Kean University, USA.

Dimas Bagus Wiranatakusuma Lecturer at the Department of Economics, Faculty of Economics, Universitas Muhammadiyah Yogyakarta, Indonesia. Email: [email protected]

Faiza Husnayeni Nahar, Master in Economics, International Islamic University Malaysia, and Alumni of International Program for Islamic Economics and Finance, Universitas Muhammadiyah Yogyakarta, Indonesia.

Gul e Rana. Lecturer, Department of Management Sciences, Yanbu University College, Yanbu, Saudi Arabia.

Irfan Altaf Arnur. Universitas Muhammadiyah Yogyakarta, Indonesia.

Irfan Syauqi Beik. Center of Islamic Business and Economic Studies (CIBEST), Bogor Agricultural University, Indonesia. Email: [email protected]

Ismaeel Ibrahim Naiya, PhD. Chief Economist Complex, Islamic Development Bank, Jeddah, KSA.

Jennifer Brodmann. Department of Economics and Finance, University of New Orleans, USA. Email: [email protected]

Lakhi Muhammad, PhD. Yanbu, Saudi Arabia. Email: [email protected]

M. Kabir Hassan, Ph.D. Professor of Finance and Hibernia Professor of Economics and Finance, Department of Economics and Finance, University of New Orleans, USA. Email: [email protected]

Malik Shahzad Shabbir. Financial Manager, Eid Mabadee Construction Company, Makkah, Kingdom of Saudi Arabia. Email: [email protected]

Masudul Alam Choudhury, PhD. Professor, Department of Shari'ah and Economics, University of Malaya; International Chair, Postgraduate Program in Islamic Economics & Finance, Faculty of Economics, Trisakti University; Annual Summer Visiting Research Professor, Social Economy Centre, Ontario Institute for Studies in Education, University of Toronto. Email: [email protected] Masyhudi Muqorobin. Director of International Program for Islamic Economics and Finance (IPIEF), Universitas Muhammadiyah Yogyakarta, Indonesia. Email: [email protected]

Md. Abdus Sabur. Assistant Professor, Department of Accounting & Information Systems, Islamic University, Kushtia, Bangladesh.

Md. Abu Sina. Professor, Department of Accounting & Information Systems, Dean, Faculty of Business Administration, Islamic University, Kushtia, Bangladesh.

Mohd Ali Mohd Nor, PhD. Center for Islamic Economics and Finance, Universiti Kebang-saan Malaysia. Email: [email protected]

Muhammad Anif Affandi. Faculty of Economics, Universitas Muhammadiyah, Yogya-karta, Indonesia.

Musa Jega Ibrahim, PhD. Chief Economist Complex, Islamic Development Bank, Jeddah, KSA.

Nik Nor Suhaida Ali. Lecturer, School of International Studies, UUM College of Law, Government and International Studies, Univerisiti Utara Malaysia. Email: [email protected]

Nohafiza Nordin. School of Economics, Finance and Banking, College of Business, Universiti Utara Malaysia. Email: [email protected]

Norafidah Ismail. School of International Studies, Universiti Utara Malaysia.

Nur Azizah. Department of Islamic Economics, Faculty of Economics and Management, Bogor Agricultural University, Indonesia. Email: [email protected]

Ratnaria Wahid. School of International Studies, Universiti Utara Malaysia.

Rininta Nurrachmi. RNM Consulting. Email: [email protected]

Salwani Arbak. Lecturer, School of International Studies, UUM College of Law, Govern-ment and International Studies, Univerisiti Utara Malaysia. Email: [email protected]

Zaemah Zainuddin, PhD. School of Economics, Finance and Banking (SEFB), College of Business, Universiti Utara Malaysia. Email: [email protected]

8

LIST OF CONTRIBUTORS


List of Contributors

Abd elrahman Elzahi Saaid ALI, PhD. Associate Professor of Banking and Finance, Islamic Research and Training Institute, Islamic Development Bank, Jeddah, KSA. Email: [email protected]

Abdul Ghafar Ismail, PhD. Professor of Banking and Finance, Islamic Research and Training Institute, Islamic Development Bank, and Center for Islamic Economics and Finance, Universiti Kebangsaan Malaysia. Email: [email protected]

Amer Maraqa. Department of Management and Organization, Marmara University, Istanbul, Turkey. Email: [email protected]

Alhussein Al Nanaa. School of International Studies, Universiti Utara Malaysia.

Benito A. Sanchez, Ph.D. Associate Professor of Finance, Department of Economics and Finance, Kean University, USA.

Dimas Bagus Wiranatakusuma Lecturer at the Department of Economics, Faculty of Economics, Universitas Muhammadiyah Yogyakarta, Indonesia. Email: [email protected]

Faiza Husnayeni Nahar, Master in Economics, International Islamic University Malaysia, and Alumni of International Program for Islamic Economics and Finance, Universitas Muhammadiyah Yogyakarta, Indonesia.

Gul e Rana. Lecturer, Department of Management Sciences, Yanbu University College, Yanbu, Saudi Arabia.

Irfan Altaf Arnur. Universitas Muhammadiyah Yogyakarta, Indonesia.

Irfan Syauqi Beik. Center of Islamic Business and Economic Studies (CIBEST), Bogor Agricultural University, Indonesia. Email: [email protected]

Ismaeel Ibrahim Naiya, PhD. Chief Economist Complex, Islamic Development Bank, Jeddah, KSA.

Jennifer Brodmann. Department of Economics and Finance, University of New Orleans, USA. Email: [email protected]

Lakhi Muhammad, PhD. Yanbu, Saudi Arabia. Email: [email protected]

M. Kabir Hassan, Ph.D. Professor of Finance and Hibernia Professor of Economics and Finance, Department of Economics and Finance, University of New Orleans, USA. Email: [email protected]

Malik Shahzad Shabbir. Financial Manager, Eid Mabadee Construction Company, Makkah, Kingdom of Saudi Arabia. Email: [email protected]

Masudul Alam Choudhury, PhD. Professor, Department of Shari'ah and Economics, University of Malaya; International Chair, Postgraduate Program in Islamic Economics & Finance, Faculty of Economics, Trisakti University; Annual Summer Visiting Research Professor, Social Economy Centre, Ontario Institute for Studies in Education, University of Toronto. Email: [email protected] Masyhudi Muqorobin. Director of International Program for Islamic Economics and Finance (IPIEF), Universitas Muhammadiyah Yogyakarta, Indonesia. Email: [email protected]

Md. Abdus Sabur. Assistant Professor, Department of Accounting & Information Systems, Islamic University, Kushtia, Bangladesh.

Md. Abu Sina. Professor, Department of Accounting & Information Systems, Dean, Faculty of Business Administration, Islamic University, Kushtia, Bangladesh.

Mohd Ali Mohd Nor, PhD. Center for Islamic Economics and Finance, Universiti Kebang-saan Malaysia. Email: [email protected]

Muhammad Anif Affandi. Faculty of Economics, Universitas Muhammadiyah, Yogya-karta, Indonesia.

Musa Jega Ibrahim, PhD. Chief Economist Complex, Islamic Development Bank, Jeddah, KSA.

Nik Nor Suhaida Ali. Lecturer, School of International Studies, UUM College of Law, Government and International Studies, Univerisiti Utara Malaysia. Email: [email protected]

Nohafiza Nordin. School of Economics, Finance and Banking, College of Business, Universiti Utara Malaysia. Email: [email protected]

Norafidah Ismail. School of International Studies, Universiti Utara Malaysia.

Nur Azizah. Department of Islamic Economics, Faculty of Economics and Management, Bogor Agricultural University, Indonesia. Email: [email protected]

Ratnaria Wahid. School of International Studies, Universiti Utara Malaysia.

Rininta Nurrachmi. RNM Consulting. Email: [email protected]

Salwani Arbak. Lecturer, School of International Studies, UUM College of Law, Govern-ment and International Studies, Univerisiti Utara Malaysia. Email: [email protected]

Zaemah Zainuddin, PhD. School of Economics, Finance and Banking (SEFB), College of Business, Universiti Utara Malaysia. Email: [email protected]

7.Islamic Tourism:

Factors that Influence Muslim Tourists and

How to Promote Tourism in OIC Countries

Rininta Nurrachmi

Abstract

The growth of Islamic tourism among Muslim countries should become an alternative revenue source besides natural resources such as oil, gas and agricultural products. This paper aims to examine factors that influence Muslimtravelers in choosing Islamic tourism destinations and how to promote thisindustry efficiently among OIC members that have less exploration in theirdomestic resources. Push and pull factors influence Muslim tourists in decidingwhich place they want to visit. Cooperation and coordination among OIC memberscan enhance Islamic tourism for Muslim countries interested in attracting foreigntourists.

Keyword: Islamic tourism, Muslim, OIC countries

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Introduction

Islam is the common denominator that unites countries in the Organization ofIslamic Cooperation (OIC), but they are diverse countries in terms of geographic,culture, history, languages, and economic development. Most of OIC membercountries rely on revenues from export of natural resources such as oil and gasand agricultural products.

Through tourism, each member can diversify their economies or to earn foreigncurrency. This industry has become one of the biggest and potential revenueearners to generate income in this globalized and inter-connected world.

The 57 OIC countries have potential markets for Islamic tourism. Natural beauties, Islamic heritage, cultural and archeological heritage, historic heritageare spreading in OIC members. However, according data from World Bank(2012), Muslim countries only share 13% of global tourism market. Further-more, this share mainly goes to a limited number of countries such as Turkey,Malaysia, Saudi Arabia, Egypt and Morocco. The remaining members of OIChave less international arrivals because of limited exploration and less promotion in their domestic resources.

Since the incident of 9/11, Muslims are terrified for misunderstanding of Islamfrom the western media. The cultural tension and fear of the consequences fromthe 9/11 attacks discourage Muslim tourists to visit western countries as holidaydestinations such as the USA and Europe. Thus, tourists from the Middle Eastwho are well known for high spending prefer to spend their holiday in the samecultural environment.

This condition should be an opportunity for other OIC members to attract Muslimtravelers to visit their countries other than Turkey, Malaysia, Saudi Arabia, Egyptand Morocco.

This chapter will address the understanding of Islamic tourism and factors thatinfluence Muslims in choosing Islamic tourism destinations. Other than that,the paper discusses how to promote Islamic tourism efficiently and effectivelyin OIC countries besides Turkey, Malaysia, Saudi Arabia, Egypt and Morocco.

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Islamic Tourism

Tourism is an act of powerful motive to visit places of interest. The activities canbe in terms of recreation, leisure, religious, family or business purpose. A strongtourism sector can contribute to the economic development of a country. It hasdirect and indirect contribution. The direct contributions are raising the nationalincome and improving the balance payments, while the indirect contribution isthrough multiplier effect and by providing connecting countries from hard andsoft infrastructure.1

Since the September 2001 attacks in the US, there has been a rise in Islamo-phobia in the media which heightened cultural tension and misunderstandingabout Islam. Because of the potential problems they may face in the westerncountries such as the USA and Europe, many Muslims prefer to stay within thesame culture when choosing holiday destinations. The term Islamic tourismcomes up when Muslim tourists choose to spend their holiday in the countrywithin the same cultural environment.

This opportunity has been captured by four OIC members namely Egypt,Morocco, Malaysia and Turkey who successfully promote their countries forIslamic tourism. The four dominant countries receive 86 million internationaltourist arrivals in 2012.2

The general definition of Islamic tourism is limited in visiting Islamic cultural heritage, holy places and religious sites in different Muslim countries. Bakar (2011)mentioned in his paper that there should be new perspective in Islamic tourism inthe hope of providing a healthy growth to this industry in the global market.

He also elaborated that Islam is judges by two principles: 1) tawhid-complianceat the level of ideas and beliefs, and 2) Shari’ah compliance at the level of practice and ethical values. These two principle will save the certain aspects ofShari’ah meant only for Muslims such as pertaining to halal food.

In Islam, people are encouraged to travel and appreciate the creations of Allah.By history, Islamic tourism is an activity involving visit to Mecca for pilgrimage(Munirah & Ismail, 2012). However, there are Muslim travelers who are eagerto explore the Islamic lifestyle during their holiday such as to get halal food,awareness of five daily prayers and to increase their faith in God.

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Overall, through Islamic tourism, destination countries can invite the wholeworld towards the path of Islam. Moreover, Bhuiyan (2011) stated that it createseconomic involvement and job opportunities for poor Muslim countries people.Eventually, there will be a balance condition in the economic sector of the Muslim world.

Factors that influence Muslim travelers in choosing Islamic tourism destinations

Munirah and Ismail (2012) reported that in order to boost tourism in OIC markets, there is need to know the factors that motivate and the needs of Muslim travelers for Islamic tourism, so that planners and travel managerswould know the things they should supply to meet the demands of the tourists.

There are factors in deciding tourist destinations for Muslim travelers. Kovjanic(2014) reported the two factors are as follows:

1. Push factor is reason that discourages Muslim tourists to visit their holidaydestination. The misunderstanding of Islam in the West causes Muslim travelersto reconsider visiting the USA and Europe. Since the September 11 attacks, theparticipation of Arab tourists in overall tourism in the USA and Europe hasdeclined by 50% and 30% respectively (World Tourism Global Trends Report,2007). Hence, Arab tourists from the Gulf choose to visit countries within thesame cultural environment.

2. Pull factors is the things that attract tourists to visit the tourism destination.Improved tourist infrastructure – new hotels, theme parks, resort projects, shopping centers, and general infrastructure – modern roads and airports.

Every Muslim in OIC countries has different needs in travelling. Arab touristsespecially from the Middle East are well known as high-spending consumers.They have less interest in visiting cultural and historical sites but prefer destinations that offer fun, shopping and family activities. Arab tourists willreturn to the same vacation destination if they like the place. In contrast, touristsfrom South East Asia such as Indonesia and Malaysia prefer to visit holy places,cultural and historical sites. Persian Gulf countries have become their favoriteholiday destinations.

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***OIC-Press-FINAL-3.10.17 3/10/17 15:10 4

Muslim travelers are interested in destinations that comply with Shari’ah law andaccommodate their special needs. Infrastructure and facilities according to Shari’ahare the essential things in Islamic tourism. Having Shari’ah-compliant hotels isone way of improving the tourism infrastructure. Brunei has promoted Islamictourism by establishing Shari’ah Compliant Hotel (SCH). Other than that,Mohamed (2013) reported that Brunei is known for being a ‘dry’ country wheresale of alcohol is prohibited in all supermarkets, hotels and even in its nationalcarrier (Royal Brunei Airlines) and halal food is available everywhere.

Learning from Malaysia, which has successfully become an Islamic tourismdestination, a study done by Khan et al (2013) provides evidence that destinationimage, religious motivation and service quality are closely related to satisfactionof travelers towards holiday destination. The definitions of those three attributes are as follows:

1. Destination image is an essential tool to achieve tourist’s satisfaction andrevisit intention. Strong destination image provides competitive advantages overcompetitors. If destination management can create positive images of destination,the number of tourists will increase.

2. Religious motivation is travelling in purpose to visit religious destinations,which give mental and spiritual benefit for the tourist. In Islamic tourism, visitingholy places and Islamic history can provide a form of relaxation and educatethe Muslim traveler about the history of Islam.

3. Service quality is the customer’s judgment and it is the key tool of businessindustry. Satisfaction for tourist and destination loyalty will increased byimproving service quality of the tourism industry. Rahman (2014) mentioned in his study that to achieve tourists’ satisfactionbeside those three attributes, friendliness of local people, local varieties of halalfoods as well as good value for money are the important destination attributesthat manifest in Malaysia’s image as tourist destination.

After seeking factors that influence Muslim travelers in choosing holiday destinations, an effective and efficient promotion is required in order to get thetourist’s attention. The following section elaborates the details.

Promote Islamic Tourism Effectively and Efficiently

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OIC members have rich and diverse heritage, and Islamic tourism is one of themost important resources. Muslim and non-Muslim tourists have been attractedto visit this permanent wealth and treasure. Islamic tourism may be a source ofprosperity for Muslim countries and have the potential to generate a country’srevenue if it is promoted in an effective and efficient manner. Although OICcountries differ in terms of economic background, political condition, naturalresources to explore, human resources to train and the capability in managingtheir tourism, they have the same purpose of promoting Islamic tourism, toenhance their national income and job creation for their citizens.

Some of OIC members are among the least developed countries (LDCs) andhave uncertain political conditions. They require foreign loans to improve touristinfrastructures as a pull factor. According to Bhuiyan et al. (2011), the IslamicDevelopment Bank (IDB) has expressed support for Shari’ah-complaint tourism.The bank has allocated funds for tourism development in Muslim countries.Moreover low-income countries (LICs) can receive investment from middle-income countries that are members of OIC.

A part from the role of IDB and foreign investors to fund the tourism infra-structure, Zamani (2010) mentioned that the government has important role intourism development and the operation of the tourism industry. The governmentprovides the infrastructure and various services and amenities as well as over-all direction (UNESCO, 2007)

Fahim and Dooty (2014) made recommendations in promoting Islamic tourismfor destination countries, as follows:

� Establish proper infrastructure facilities that encourage tourists to embark onIslamic tourism to destination countries, such as Islamic resorts and hotels,alcohol-free accommodation, available prayer rooms

� Arrange Islamic tourism events for OIC members other than Turkey,Malaysia, Saudi Arabia and Egypt

� Involve mass media to promote Islamic tourism in destination countries. � Coordination among Muslim countries to develop Islamic tourism. Countries

such as Turkey, Malaysia and Egypt who have successfully promoted Islamictourism can arrange joint tourism with other Muslim countries that have lesspromotion to attract tourists.

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In addition to the foregoing, advertising and disseminating information, such asabout Muslim hospitality and natural beauties, would help a lot. Namin (2013)mentioned marketers and destination managers should consider effective strategies in connection to Islamic features of destination, tourist satisfactionsand loyalty to destination. Furthermore, marketers should pay attention on cultures of Islamic countries when designing travelling and tourism packages.Hospitality managers should pay attention to Islamic architecture in designinghotels. The main thing about promotion in Islamic tourism is to provide a better understanding about Islam and spiritual traditions toward Muslims andnon-Muslims. There should be an enhancement for research in the field ofIslamic tourism in order to enrich the Islamic literature.

Conclusion and Recommendation

Islamic tourism is an emerging industry in the Muslim countries. Besides visitingholy places and Islamic heritage sites, there are two principles that should befundamental in developing Islamic tourism in the global market, 1) tawhid-compliance at the level of ideas and beliefs and 2) Shari’ah-compliance at thelevel of practice and ethical values. The success of Malaysia, Turkey, Moroccoand Egypt in promoting Islamic tourism can become a role model for other OICmembers in developing this industry. There are pull and push factors that influence the Muslim traveler in choosing vacation destinations.

Besides attributes such as destination image, religious motivation, and servicequality that attract tourists, promotion is an essential thing in attracting Muslimtourists. Cooperation among OIC members in developing Islamic tourism canencourage the Muslim travelers towards embarking on Islamic tourism. Furthermore, establishing infrastructure and facilities according to Shari’ah, promotion through mass media and arranging Islamic tourism events amongOIC member can be done to develop this industry.

Promotion is the essential thing in Islamic tourism. Besides support from thelocal government and foreign investors, promotion through the social media andtourism websites are also effective and efficient ways to attract tourists. Localwebsites that provide updated information regarding Islamic heritage, Islamicevents, Shari’ah-compliant hotels and amusement parks can attract Muslimtourists to visit these places.

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References

Bakar, Osman. (2011). Islamic Tourism: Understanding Its Meaning, Multi-DimensionalEnterprise and Global Significance. Paper presented in World Islamic Tourism Conferences 12-13 July 2011

Behzad, Salmani, Hossein, Panahi and Somayeh, R. (2014). Assessing the DynamicEconomic Impact of Tourism for OIC Members. World Applied Sciences Journal,32(6), 1098–1105. doi:10.5829/idosi.wasj.2014.32.06.1927

Bhuiyan, A. H., Siwar, C., Ismail, S. M., & Islam, R. (2011). Potentials of IslamicTourism : A Case Study of Malaysia on East Coast Economic Region. AustralianJournal of Basic and Applied Sciences, 5(6), 1333–1340.

COMCEC. (2014). COMCEC Tourism Outlook 2014 (pp. 1–41). Turkey.

Dabour, N. (2003). Problems and Prospects of Sustainable Tourism Development inthe OIC Countries: Ecotourism. Journal of Economic Cooperation 24, 1, 25–62.

Fahim, S. T., & Dooty, E. N. (2014). Islamic Tourism : In the Perspective of. GlobalJournal of Management and Business Research : Real Estate Even & Tourism Management, 14(1).

Haq, Faruq and Wong, Ho Yin. (2010). Is spiritual tourism a new strategy for market-ing Islam ? Journal of Islamic Marketing, 1(2), 136–148. Emerald Group PublishingLimited. doi:10.1108/17590831011055879

Khan, A. H., Haque, A., & Rahman, M. S. (2013). What Makes Tourists Satisfied? An Empirical Study on Malaysian Islamic Tourist Destination, 14(12), 1631–1637.doi:10.5829/idosi.mejsr.2013.14.12.2250

Kovjanic, G. (2014). Islamic Tourism as a Factor of the Middle East Regional Devel-opment. TURIZAM, 18(1), 33–43.

Mohamed, H. M. bin H. (2013). Promoting Islamic Tourism in Brunei: Through Customers Understanding Towards the Syariah Compliant Hotel Concepts. UniversityNotthingham Malaysia Campus, Kuala Lumpur. Unpublished Project Paper.

Rahman, Muhammad Khalilur. (2014). Motivating factors of Islamic Tourist’s Desti-nation Loyalty: An Empirical Investigation in Malaysia. Journal of Tourism and Hospitality Management. June 2014, Vol. 2, No. 1, pp. 63-77

Munirah, L., Kamarudin, B., & Ismail, H. N. (2012). Muslim Tourists ‘Typology inMalaysia : Perspectives and Challenges. The Tourism and Hospitality InternationalConference (THIC 2012) (pp. 1–8).

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Chapter Notes

CHAPTER 1

1. Note that OIC consists of 57 member countries all of them members of the IDBexcept Guyana. As most of the aggregated data are the same we use the termsinterchangeably in this paper.

2. The major links through which trade and trade policy influence poverty reductionchanges in relative prices, factor income, government revenues and expenditures,and risk and vulnerability. For a survey of the link between trade, income distribu-tion and poverty see Santos-Paulino, A. U. (2012), and for a survey on trade liber-alization and poverty, see Winters, L. A. et al (2004). For a survey on the linkbetween trade openness, economic growth and poverty, see Berg, A. and Krueger,A. (2003)

3. Naiya, I. I. (2012). Structural Transformation and Poverty in Selected OIC Countries.

4. See Appendix for intra-trade data of OIC Member Counties by regions.

5. Note that OIC (57) countries = IDB (56) countries plus Guyana. The two are con-sidered the same in this paper.

6. World Trade Organization (2015). International trade Statistics, Intra- and Inter-regional merchandise trade, 2014

CHAPTER 2

1. Thanks to Dr. Rifki Ismal of the Research Department of Bank Indonesia for thiscontribution.

2. Consider the equation, y = a0 + a1*x1 + a2*x2. If x1 = a*y; x2 = b*y, then werewrite the equation and simply it as follows: y = a0 + a1*a*y + a2*b*y. That is, y= a0/(1-a1*x – a2*b) = A say. Then, y = A, a constant. Consequently, the coeffi-cient of x1 and x2 are zero by the regression method.

CHAPTER 3

1. This group includes ethnic-Malays and local peoples of Peninsular Malaysia,Sabah, and Sarawak.#

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2. BCIC stands for Bumiputera Commercial and Industrial Community#

3. In Malaysia, SMI are defined on the basis of number of employees and salesturnover: SMI is small and medium-size an enterprise with employee less than150 and sales turnover is not more than 25 million ringgit.

CHAPTER 5

1. see: http://www.todayszaman.com/newsDetail.action;jsessionid=1vlcJ42N7iucLTxlqpcQjy3l?newsId=105047&columnistId=0)

2. An Assessment of Trade Costs in OIC Countries, available at http://www.sesrtcic.org/files/article/476.pdf

3. OIC Economic Outlook 2013 available athttp://www.sesrtcic.org/files/article/469.pdf

CHAPTER 7

1. Retrieved from COMCEC (Committee for Economic and Commercial Cooperationof the Organization of Islamic Cooperation) Outlook, 2014

2. Data retrieved from World Bank on 17 February 2015

CHAPTER 8

1. https://atlas.media.mit.edu/en/profile/country/mar/

2. United Nations Conference on Trade and Development

3. http://knoema.com/WBWDIGDF2012Apr/world-development-indicators-wdi-global-development-finance-gdf-april-2012?tsId=1094940

CHAPTER 12

1. This is typical of low-income countries, which is not surprising because many ofthe OIC countries are considered low-income countries.

2. The yearly change is available upon request

3. We will use a time varying version of the gravitational model. However, time subscript is not displayed for better clarity

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4. If we had used OLS the total number of observations would be 16,598

5. GCCAMUECO by construction tend to be collinear with GCC, AMU and ECO,which could explain the negative sign in model specification 1.

CHAPTER13

1. Please visit: http://www.dinarstandard.com

2. Please also refer to Global Islamic Report Summary 2015

3. al-Baqarah (2:168), al-Maidah (5:1), (5:4-5), (5:87-88), (5:96), al-A’raf (7:157),an-Nisa’(4:160), at-Tahrim (66:1), al-Hajj (22:30)

4. Only recently Dubai declared herself as capital city of Islamic economy.

5. In this paper, we simplify shari’ah-compliant financial products or services ashalal finance

6. Please refer to Halal Research Council (www.halalrc.org) and Halal DevelopmentCorporation (http://www.matrade.gov.my/en/foreign-buyers/find-malaysian-suppliers-a-service-providers/malaysian-halal-directory)

7. Namely, in preserving the human’s faith (deen), their self (nafs), their intellect(‘aql), their posterity (‘nasl), and their wealth (maal). In addition, all of these universal intents should be able to interact with each other and are closely relatedin preserving one another.

8. See, Abdul Ghafar Ismail and Achmad Tohirin (2010), Islamic law and finance.Humanomics, 26 (3), 178-199.

9. See Abdul Ghafar Ismail (2015) Regulating the Halal Economy: Some Thoughts.IRTI Knowledge Review, 3(2)

10. This Qaid’a is derived from many verses in the Qur’an: for example “He it is Whocreated for you all that is on earth.” [Al-Baqarah 2:29], and “Allah is He Who hascreated the heavens and the earth and sends down water from the sky and therebybrought forth fruits as provision for you; and He has made the ships to be of serviceto you, that they may sail through the sea by His command, and He has maderivers to be of service to you.” [Ibrahim 14:32] and also “This day [all] good foodshave been made lawful, and the food of those who were given the Scripture is law-ful for you and your food is lawful for them. And [lawful in marriage are] chastewomen from among the believers and chaste women from among those who weregiven the Scripture before you, when you have given them their due compensation,desiring chastity, not unlawful sexual intercourse or taking [secret] lovers. Andwhoever denies the faith - his work has become worthless, and he, in the Here-

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after, will be among the losers.” [Al Ma’idah 5:5] and “All food was lawful to theChildren of Israel except what Israel had made unlawful to himself before theTorah was revealed. Say, [O Muhammad], “So bring the Torah and recite it, if youshould be truthful.” [Al Ali Imran 3:93]

11. “Prohibited to you are dead animals, blood, the flesh of swine, and that which hasbeen dedicated to other than Allah , and [those animals] killed by strangling or bya violent blow or by a head-long fall or by the goring of horns, and those fromwhich a wild animal has eaten, except what you [are able to] slaughter [before itsdeath], and those which are sacrificed on stone altars, and [prohibited is] that youseek decision through divining arrows. That is grave disobedience. This day thosewho disbelieve have despaired of [defeating] your religion; so fear them not, butfear Me. This day I have perfected for you your religion and completed My favorupon you and have approved for you Islam as religion. But whoever is forced bysevere hunger with no inclination to sin - then indeed, Allah is Forgiving andMerciful.” [Al Ma’idah 5:3], “I do not find within that which was revealed to me[anything] forbidden to one who would eat it unless it be a dead animal or bloodspilled out or the flesh of swine - for indeed, it is impure - or it be [that slaugh-tered in] disobedience, dedicated to other than Allah . But whoever is forced [by necessity], neither desiring [it] nor transgressing [its limit], then indeed, yourLord is Forgiving and Merciful.” [Al ‘an’am 6:145] and also “He has only forbiddento you dead animals, blood, the flesh of swine, and that which has been dedicatedto other than Allah . But whoever is forced [by necessity], neither desiring [it] nortransgressing [its limit] - then indeed, Allah is Forgiving and Merciful.” [An Nahl16:115]

12. Op cit.

13. Op cit.

14. Op cit.

15. Op cit.

16. O you who have believed, indeed, intoxicants, gambling, [sacrificing on] stonealters [to other than Allah], and divining arrows are but defilement from the workof Satan, so avoid it that you may be successful. [Al Ma’idah 5:90]

17. “And do not eat of that upon which the name of Allah has not been mentioned,for indeed, it is grave disobedience. And indeed do the devils inspire their allies[among men] to dispute with you. And if you were to obey them, indeed, youwould be associators” [of others with Him]. [Al ‘an’am 6:121]

18. Variations in opinion are due to different schools of thought. There are four majorschools of thought in Islam: Hanafi, Maliki, Shafi’i and Hanbali.

19. http://www.e-infad.my/FMS_en/index.php?option=com_fatwa&task=viewlink&link_id=2128&Itemid=59

*******

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Intra-trade in

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