21
FIGURE 1: TAKAFUL INDUSTRY DEVELOPMENT SCORE
Source: IFDI
First, to select three OIC countries as a sample for this study, we have categorized them into
three groups based on IFDI score (see elow): 70-above, 40-60, and 20-30 (Se
. Obviously, Saudi Arabia is a leading country in terms of Takaful industry development, the
only country which falls under the first group. Next, four countries - Iran, Bangladesh, Malaysia,
and Indonesia - fall under the second group. Therefore, to choose a country, we apply the second
criterion (se in the Appendix) and select Malaysia as a group leader with the highest
economic freedom score (74/100) in the year 2019.
Further, seven countries – Jordan, Kuwait, Oman, Pakistan, Turkey, Bahrain, and Sudan – form a
third group based on the first criterion. Jordan and Bahrain have marginally higher economic
freedom score compared to Turkey (66.5, 66.4, and 64.6, respectively). Since, according to
COMCEC’s classification of countries, Jordan, Kuwait, Oman, Bahrain, and Sudan belong to the
Arab group same as Saudi Arabia, and Pakistan belongs to Asian group as Malaysia, Turkey was
picked from the list of countries.
Meanwhile, due to the low IFDI score, the African group countries were not included in the
analysis. Finally, the UK is in the list of selected countries because this is the only country which
has the highest IFDI score among non-Muslim countries showing strong trends in the
development of the Islamic finance industry. Also, UK carries high economic freedom score
(79/100).
In summary, the sample includes three OIC countries: 1) Saudi Arabia with 100 per cent Takaful
-based economy, 2) Malaysia with the dual banking and Takaful systems, and 3) Turkey with its
emerging Islamic finance industry. The study also includes the UK as a non-OIC country – an
economy with IFIs.
presents the Islamic Finance Development Indicators (IFDI) for each of the sample
countries. It shows that Malaysia leads other selected countries in terms of IFDI overall score
93
57 53
42 40
35 34 30 28 26 25 22 21 21
14 9 8 8 5 5 5 4 3 3 2 2 2 1 1 1 0
0
10
20
30
40
50
60
70
80
90
100
Saudi Arabia
Iran
Bangladesh
MalaysiaIndonesia
UAEQatarJordanKuwait
Oman
PakistanTurkeyBahrain
SudanBruneiEgyptSyria
TunisiaYemen
Palestine
Mauritania
Libya
Lebanon
NigeriaSomaliaGambiaSenegal
Kazakhstan
Algeria
IraqUK
IFDI Score