Strategic Dimensions and Expected Effects of Present Financial and Economic Crisis on Social and Political Fabric of Development in Pakistan
Introduction
In the development of a country in terms of the economic, social, and political aspects, there should be strategic dimensions. These aspects are known to drive the development of one country which will promote the expected effects. With the aid of the country’s financial situation, the appropriate policy can be promoted and apply these schemes that can be suitable in the country’s needs.
Background and Problem Statement
The Islamic banking and finance has been in the social construction and plays in the role of values and beliefs in banking practice. The use of the integrated accounting principle and method in the banks is the very unique that it still leaves the competency in the performance of the banks. In the application of the bureaucratic forms in the banks, it is feasible for the banks in Pakistan to be aligned in the Islamic Banking.
The banking industry enables to compete in the world of global financing for the bank itself is applying the principle of corporate governance. In the world of the competitive industry, the economic development can be reflected in the continuous corporate financing (Ali, 2007). And in the globalization, what is the position of Islamic banking in Pakistan, in order to manage the financial stability and overall development?
Research Aim and Objectives
The main aim of the study is to identify the strategic dimensions that can improve the situation and pursue the development in Pakistan. In order to facilitate the investigation there are four objectives that can help to gather information. First objective of the study is to determine the feasibility of the Islamic banking in the banking industry in Pakistan. The second objective is to provide the information regarding the benefits and drawbacks of the implementation of Islamic banking in the country. Third is to describe the strategic dimensions that will create an impact on the development. And fourth is to describe the prognosis or future effects of the strategic dimensions towards the development.
Literature Review
Islamic banking and finance refers to a center of application of the Islamic accounting. The singular practice in the Islamic banking is considered as the professional practices in the business environment that can be easily renew the interest and compete in the Western practice (Maurer, 2002). In the international level of the Pakistan’s bank known as the State Bank of Pakistan, there is a goal that the industry needs to pursue in strengthening the links with the International Islamic Infrastructure Institutions. Also, the banks in Pakistan is attempting with the multilateral development. This means that the adaptation of the Islamic banking practices in Pakistan is inevitable. In addition, Pakistan Islamic banking is emerging as a response to both religious and economic needs. Their effort to take the progress and continuous development can be done through allowing the new full fledged Islamic banks in the private sector. Furthermore, the country allows the conventional banks to set the Islamic banking subsidiaries, and then allowing the existing conventional banks to open the Stand-alone Islamic banking branches (Sarfraz, 2007). The financial stability of the country is the main aim of the implementation of Islamic banking industry. And its role and support in the institution can be the center of the system. Using the unique risks of Islamic modes of finance, such as the credit risks, market risks, liquidity risks, many others are steaming the competency of the banking and its supervision. The standard applied in the Islamic banks can be the internal approach of the risk management that secures the Islamic banking and market disciplines (SBP, 2008).
Methodology
The suggested methodology that can be successfully applied in the study is to use the comparative case study. Gathering the previous studies that centers in the application of the Islamic banking and finances in most of the countries are great advantage for the study. In the use of the same method, the ideas, knowledge, and skills can be applied in the critical accounting practices.
References:
Ali, S.N., (2007) Islamic Finance and Economics as Reflected in Research and Publications, Harvard Law School [Online] Available at: http://www.inceif.org/_system/media/pdf/global_forum/speech_nazimali.pdf [Accessed 04 February 2011].
Maurer, B., (2002) Anthropological and Accounting Knowledge in Islamic Banking and Finance: Rethinking Critical Accounts, Journal of the Royal Anthropological Institute, 8(4)
Sarfraz, A., (2007) Pakistan’s Islamic Banking Sector Review, Islamic Banking Department, State Bank of Pakistan [Online] Available at: http://www.sbp.org.pk/ibd/Islamic-Bkg-Review-03-07.pdf [Accessed 04 February 2011].
SBP, (2008) Third International Conference on Islamic Banking and Finance: Risk Management, Regulation and Supervision, State Bank of Pakistan [Online] Available at: http://sbp.org.pk/ibd/2007/SBP-IRTI-Conf-30-Aug-07.pdf [Accessed 04 February 2011].
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