The effect of Islamic development bank projects on economic growth in the Gulf Cooperation Council countries

Abstract

Background: Islamic Development Bank in GCC countries facilitates economic growth by funding infrastructure projects, promoting Islamic finance, and fostering collaboration among member states. It supports diversification efforts, social development, and sustainable initiatives, aligning with regional priorities and Islamic finance principles for inclusive prosperity. Objectives: The study seeks to elucidate the significance of the Islamic Development Bank in fostering economic expansion in GCC countries via foreign direct investment. Methods/Approach: In this work, we employ the Panel data approach to analyze the GCC countries from 1980 to 2023. Results: We discovered a notable and meaningful correlation between foreign direct investment, the expansion of individuals, and the overall population with the economic growth of GCC countries. Additionally, we observed a detrimental effect of inflation on growth. The Islamic Development Bank's projects in the Gulf Cooperation countries are highly significant as they encourage intra-Arab investments among these nations. Initiating this study involves examining the pertinent literature on the programs of the Islamic Development Bank and their influence on the economies that receive benefits from them, either directly or indirectly. Conclusions: The findings of this study can serve as a reliable resource for decision-makers in the GCC countries to facilitate economic development through the implementation of projects by the Islamic Development Bank. Researchers and academics might derive advantages from it and regard it as a study that introduces novel perspectives to the issue being investigated.