Promoting peace through trade

In a speech to the United Nations General Assembly on countering violent extremism, President Barack Obama quoted Shaykh Abdullah bin Bayyah, founder of the Forum for Promoting Peace in Muslim Societies, as saying, “We must declare war on war so the outcome will be peace upon peace.” This noble sentiment is certainly worth pursuing, but how do we start to make it a reality? The answer, in part, could be found in the resurgence of Islamic finance. Although modern expressions of Islamic finance began only in the 1970s, they employ timeless principles such as profit-and-loss-sharing that can provide an alternative to some of the more speculative and exploitative aspects of conventional finance. Combining foundational ideas with their modern applications could be part of the strategy to undermine the root causes of war by alleviating poverty in underdeveloped parts of the world. Trade as a tool for good According to the World Bank, extreme poverty has fallen dramatically in emerging economies since 1981. About 70% of the developing world was living under $2 per day in that year, but this rate fell to just over 36% in 2011. The United Nations says that trade has been a primary reason for this