Connect with us

Economy

Contemporary Marketing Communication and the Case of Islam

Published

on

This paper discusses specifics of marketing communication in the case of Islam with a purpose to enable better and efficient understanding with the Muslim business community.

This would mean that in order to understand Islamic people it is essential to understand that according to the doctrine of Islamic religion Muslims submit entirely to God, and are ready to give up pleasures in this world so that they will enjoy them in the next world. One should keep in mind that for Muslims, life in this world presents only a transitional phase in which they try to achieve heaven in the other, next world. Hence, against this background marketing and business communication should be very sensitive, taking well into account Islamic teachings. Failure to respect here discussed principles may cause serious damage to companies hoping to operate on Islamic markets, even prevent them from entering such markets. Marketing and business communication represent the first public steps of companies entering the market. If they make a mistake at this stage it will be hard to achieve success in subsequent stages. Particular attention is given to understanding the institution of fatwa as a form of communication and its reference to public relations.

INTRODUCTION

   The world is fast becoming a global village, although it still remains a conglomerate of different cultures, religions, nations and traditions. These differences, arising out of various cultures and societies, are also present in business, marketing and advertising as well as in traditional and legal codes of conduct and practice.

   Internationalisation refers to the increasingly international dimension of the activities of enterprises, while globalisation is based on the presumption that the world is becoming more and more homogenous at all levels (such as economy, culture, consumer behaviour). The world has actually become a single market, and the ability to compete in this global economy is not necessarily the only challenge of the business world. It also has to deal with the constant spread of international trade.

   However, along with this increasing international economic activity there is a growing need to establish successful business communication between subjects from different cultural backgrounds. For business people and academic theoreticians involved in business relations with the Islamic world it is important, in order to be successful, to become acquainted with business practices, customs, norms and other rules applicable in those countries. This is the central topic of this article, which will be explored by methods of presentation, analysis, comparison, comment and generalisation.

   This paper examines the dimensions of business communication with a special emphasis on fatwa as an element and principle of Sharia (Islamic law), which has an important role in business relations with the Islamic world. In this context it represents a set of specifically formulated rules and customs in marketing and financial operations arising from traditional Islamic culture, which differ significantly from other cultures and civilisations. Foreigners coming from other cultural backgrounds experience communicational incompatibilities in all life situations, especially in various transactions and negotiations as well as in trade and business relations. The solution, expressed as personal and business success, lies in intercultural communication. The ability to communicate interculturally enables the realisation of business goals at the international business level.

   The aim of this article is therefore to present and analyse the set of rules, norms, customs and practices in the business world, especially in business communication, for those who have a theoretical and practical interest in business relations with the Islamic world. Business communication is based on a broad range of sui generis social, political, cultural, legal and religious rules that are applicable across the entire Islamic world and are laid down in Islamic law. Thus, our hypothesis is that the lack of knowledge of said rules and practices renders it very difficult to carry out successful marketing communication with and in Islamic environments. Within this context particular attention is given to understanding the institution of fatwa as a form of communication and its reference to public relations.

THEORETICAL FRAMEWORK

General Remarks

   Many people share the idea of human universality, believing that human beings are essentially alike and able to overcome the many differences that divide us. This idea may be most convincing, but is also the most difficult to overcome in intercultural relations. Each individual develops his or her way of living over the course of one’s life and in the course of socialisation. Culture is an important element when it comes to relations between people from various backgrounds, because it broadly incorporates the common social and physical environments they share, as well as a mixture of various influences and forces that affect their personal thinking processes and communicational behaviour. Culture thus forms the model that defines the way people live and their life orientations while it also lays down prohibitions, limitations and taboos.

   The reason such value systems exist is to organise and maintain an ordered society. In order to understand the values of other people it is necessary to examine the signs of their cultures, using our own culture as support rather than as a pattern that might be taken as a benchmark of perfection.

   When we talk about Islam we refer to Sharia Law (Sharia). According to Karčić (1997b:12) this term is usually translated as Islamic law or Islamic religious code. However, it does not represent a legal system in the technical sense of the word, but a “comprehensive system of human obligations” (Ibid.). Islamic law is a practical expression of religion that incorporates rules of a religious, moral and socio-legal character. And it is an understanding of those rules that enables successful marketing communication with the Islamic world.

   Sharia represents the legal foundation of the Islamic economy. Its role lies in providing the broad outlines of the Islamic economic system and is similar to the role of any other legal system. In secular societies laws are adopted, amended or abolished collectively based on the will of certain individuals, and as such they are subject to change. However, in Islamic societies the laws are regarded as sacred and therefore unchangeable, eternal and beyond human influence or change. In Islam religion is inseparably integrated into politics and society.

   Islamic law is, like any other religious law, based on God’s will and has a special influence on the legal systems of countries with majority Muslim populations as well as on many minority Muslim communities in other countries. The desire to achieve intercultural communication is increasingly present in various spheres of modern life, especially in marketing and business communication. The need for efficient intercultural marketing and business communication is even more intensified at the global level with the acknowledgement of different cultural models that reflect diversity of cultures. The ability to adapt to others, also those coming from very different, even hostile cultures, is the necessity of our time. Productive business communication between different cultures should not remain a mere hope nor an accidental accord or pleasant event. It should include those dimensions of diversity that will overcome ignorance and discover common, mutual interests.

   Islamic law has the inherent capacity to develop and adapt to time and place. It is the duty of every generation to read the Qur’an, create its own agreement and apply its own abilities to implement it in everyday life. Islamic law is the basis of the Islamic economy. Knowledge of Islamic law enables successful marketing and business communication in the Arab-Islamic world. Islamic laws are universal, they apply to all Muslims and are binding upon them wherever they live.

   Marketing and business communication has an important role in Islamic societies. From its very beginnings Islam has stressed the importance of commerce and trade for society. Islamic societies are not isolated from the rest of the world. This means that marketing and business communication in those societies is a complex mix of the Western model and the traditional Islamic environment

   In Islamic law economic principles are based on supporting and developing activities that apply to people and are favourable for the state, such as: trade in goods that are not harmful to people, free market and free pricing, except in cases when state intervention is required, appropriate compensation for the labourer “before his sweat dries up”, prevention of fraud, protection of (private, social and state) property and means of production, caring for the poor, the disabled and those unable to work, protection of water, plants and animals, prohibition of environmentally unfriendly technologies, nationalisation of resources that belong to everyone (water, gold, oil and other natural resources etc.), and other (comp. El-Qaradawi, 1997a: 331).

   Other principles of Islamic law regulate the fields of politics, education, media, culture, family life etc., all of which directly or indirectly influence (successful) marketing communication. Megatrends in global marketing are increasingly based on special marketing programmes, which require detailed knowledge of the targeted market segment and consumer group. In order to be successful, the countries that cooperate with the Islamic world must therefore be familiar with the relevant market and with the codes of conduct that apply to any sphere of social life.

   From the theoretical point of view this article is based on some important works written by authors[1] who have dealt with issues of Islamic law, communicology, marketing, economics, political anthropology, phychosociology and politology. Therefore the central methods applied in this article include interdisciplinary comparison and generalisation with an emphasis on findings in Islamic law and communicology.

Islam and Marketing Communication

   The article analyses communication strategies in the Islamic world and their influence on business cooperation and communication with Western and other cultures. It is based on the mental pattern of a member of the Islamic community that defines the conduct of a Muslim as a religious person and affects marketing communication. It presupposes that the cultural patterns of behaviour arising from Islamic law determine the manner in which marketing communication is carried out in this part of the world.

   In the research process special emphasis was placed on the notion of fatwa[2], which lays down the rules regarding how Muslims should behave in unclear or questionable situations and that often relate to business activities and other fields of work and life (e.g. trade and communication with non-Muslims). Fatwa is a solution or answer to a concrete problem based on Islamic law that is issued by the mufti on a case-by-case basis. It represents an important institution in Islamic law, its role being to bring Sharia closer to the people in terms of the present time (everyday life) and place. Various public relations techniques must be applied in order to present a fatwa to the general or religious public. Those who issue fatwa must be well familiar with its mission, its aims and goals, relations with the media, writing texts for the public, preparation of public speeches and many other details. Inevitably the media plays an important role in this process. The aim of the person issuing fatwa is to create public opinion among a social community that would reflect the spirit of Sharia law. Since fatwa is issued in spoken and written form, public relations techniques regarding the written text also play an important role. Although the institution of fatwa means one-way communication within the Islamic community and society, such opinions must be unconditionally implemented. Fatwa is based on the teachings of the Koran (Qur’an), and God’s will is irrevocable.

   Note should also be taken of the social exchange process, which has been a constant feature of civilised societies and their inherent mechanisms. Exchange occurs due to the unequal distribution of the necessary resources among people and is indented to address and eliminate the lack of appropriate means of satisfying individual needs and desires. Exchange methods have developed continuously throughout the evolution of civilisations and actually enabled them to evolve in many respects. Therefore it may reasonably be suggested that “the exchange process is the most important mechanism that enables the functioning of society” (Jančič, 1996: 45).

   Without knowing the specificities of the Islamic world and all the dimensions of its social system it is impossible or at least very difficult to establish and carry on any successful business activity. It requires two-way communication between the Eastern and Western ways of thinking, and accepting the differences between those societies. Despite all of the differences between Islamic and Western institutions and economic systems, there is intensive cooperation between the two worlds.

   The aim of Islamic law is to regulate all areas of human activity, not only those that may entail legal consequences. According to Islamic theory Sharia represents the body of criteria that enables one to differentiate between law and non-law. Sharia is a complete moral and legal system that directs the regulation of all areas of human behaviour with the aim of achieving harmony with divine law. Islamic lawyers believe that adherence to Sharia rules and principles not only brings an individual closer to God but also ensures development of a just society in which each individual has the opportunity to realise his or her capabilities, which in turn enables and gives rise to progress that benefits everyone. In other words: religion as a set of values and beliefs establishes goals and ideals to be implemented by society, while Islamic law lays down the code of conduct to be followed by Muslims if they wish to realise those goals.

   Generally, Islam places a strong emphasis on communication. The Qur’an contains certain ayahs[3] that point to the differences between people and the need to get to know one another. A very good example is the following ayah: “O mankind, indeed We have created you from male and female and made you peoples and tribes that you may know one another.” (Al-Hujurat: 13). The Qur’an also lays stress on trade and commerce, such as the following ayah: “O you who have believed, do not consume one another’s wealth unjustly but only [in lawful] business by mutual consent. And do not kill yourselves [or one another].” (Al-Nisa: 29).

   Sharia is a literal understanding of everything that Allah has prescribed in order to regulate human life. It is manifested in the fundamental postulates of religious belief as well as in the basic principles of power, morality, everyday behaviour, science etc. (Kutb, 1996: 90). Islamic attitude to law and Islamic law (in the modern European sense) are notions that are often misunderstood or only partly understood in Europe. In order to understand Islamic law in its core sense one should start by dealing with theological rather than legal issues (Nielsen, 1986).

   From the Sharia point of view it is understandable that in Islam it is not possible to separate different spheres of human life as is possible in the modern West where – as Max Weber has taught us in considerable detail – the value fields of ethics, science, religion and art are separated and governed by the law of non-interference and intrinsic autonomy (Weber, 1956). In Islam the language of morality constantly borrows from the metaphoric language of art, while religious prayer may easily turn into a political pamphlet without triggering any feelings of inner inconsistency or violation of formal taboos. This results in the very complex nature of Islamic language and a direct existential experience. Any simplification of that language would seriously undermine such experience. In order to understand jihad, for instance, one should have a look at the root of the concept. In Islam the root is the Qur’an itself (Debeljak, 1994:14).

   Knowledge and understanding of Islamic codes and rules is a precondition for successful marketing and business communication both for Muslims communicating with the Muslim and non-Muslim worlds and for non-Muslims communicating with the Muslim world.

   In Islamic law the principles of economy are based on supporting and developing all activities that are intended for the people and are favourable for the state. Those principles include:

          trade in goods that are not harmful to people,

          free market and free pricing except in cases when state intervention is required,

          appropriate compensation of the labourer “before his sweat dries up” (the hadith),

          prevention of fraud,

          protection of (private, social and state) property and means of production,

          caring for the poor, the disabled and those unable to work (zakat, sadaqah),

          protection of water, plants and animals,

          nationalisation of resources that belong to everyone (water, gold, oil, mines and other natural resources etc.) (El-Qaradawi, 1997a: 331).

   According to the classic methodology of Islamic law the basic goal of any individual activity in society is to create benefit and eliminate disorder (Sušić, 1996: 26-53). Other principles of Islamic law regulate the fields of politics, education, media, culture, family life etc., which in one way or another directly or indirectly affect successful marketing and business communication and any business activity.

   Communication plays an important role in human history. We could say that the history of mankind is actually the history of communication, especially in modern societies. Communication is something that is with us at birth, and follows us through life until death. The communication process is based on information transfer.

   EnciklopedijaSlovenije(1999: 390-391) describes marketing communication as the public presentation of organisations and the offer of products, services and ideas with the aim to improve their market position under competitive circumstances. Expressions of advertising and (economic) propaganda are also used to denote marketing communication. The term marketing communication is generally accepted as an expression denoting various forms of communication between organisations and their environment. Traditional forms of marketing communication (the so-called promotional mix) include personal sales, advertising, sales promotion, publicity and public relations. The central form of marketing communication is advertising, i.e. ordered, paid and signed creative mass communication. Media by which advertising messages are communicated include newspaper, radio, television, Internet, posters, banners, brochures, catalogues, display windows etc. The goal of advertising is to generate consumption of products or services as well as to enhance the reputation of organisations. Moreover, advertising is also used for non-commercial, public interest issues. The level of creativity employed and achieved often approaches the level of art. Advertising often uses exaggeration in order to achieve certain effects, sometimes even as it flirts on the border of the ethically acceptable. Some countries limit advertising freedoms with regard to certain products (tobacco, alcohol, medicines, weapons) as well as content and means of advertising via legal restrictions and regulations as well as advertising codes and practices.

   Marketing communication is a special form of communication process where the company is usually the message sender and the consumer is the message receiver, the whole process being targeted at the consumer. The aim of all marketing communication activities is to establish a connection between suppliers and consumers. Communication is an exchange rather than a one-way flow of information. Speaking to someone does not necessarily mean communicating with that person. Communication occurs the moment the recipient actually receives the message that the sender intended to convey to him/her, and reacts to it. Rejection of the message, misinterpretation and/or misunderstanding of it etc. are examples of ineffective communication (Ule, Kline, 1996: 53).

   Most authors regard communication as an exchange of information. This article is focused on the exchange of information related to marketing and business communication of modern companies and companies that are fully or partly based on Islamic law.

   Although exchange as the basis of marketing was familiar to numerous early theoreticians the pioneering work in this field was carried out by McInnes (1964). The latter pointed to the role of market as the focal point of (economic) exchanges between suppliers and buyers. According to McInnes markets result from the social intercourse between people, when the makers and users of economic goods and services seek to satisfy needs and desires through exchanges. He defined marketing as “any ‘motion’ or activity that actualises the potential relation of the producers and consumers. Thus marketing is basically related to the market. The work of marketing always begins with the discovery of market potential. The concept of marketing in its widest sense, therefore, is any activity which actualises the potential market relationship between the makers and users of economic goods and services.” (Jančič, 1996: 47).

   Communication occurs in a social context and is determined by it. Messages are given their meaning within certain social contexts, e.g. within a group, institution etc. Communication is based on the common social knowledge of its participants as well as their history and their expectations, plans and anticipation for the future (Ule, Kline, 1996: 29).

FATWA AS A FORM OF COMMUNICATION  

   As an institution of Islamic law fatwa may significantly affect communication in certain societies. Certain fatwas may result in the limiting or prevention of communication, especially when they concern the prohibition of trade between Muslims and Jews. This may also cause other forms of cooperation to be discontinued. Nevertheless, the basic aim of fatwa is to regulate relations in a society by eliminating disorder, establishing a spiritually healthy society and creating social welfare. This is based on the principle that Islam is there to help people and not make their lives difficult.

   The institution of fatwa has developed as an expression of the cautelar nature of Sharia law that is reflected in efforts to prevent any form of behaviour that might jeopardise the ideal social order. In the Qur’an the term fatwa and its synonyms refer to the clarification of ambiguous or disputable issues. Giving such clarifications was one of the tasks of the Prophet Mohammad. However, in terms of Sharia law the above terms do not carry the usual technical legal meaning. In the former case clarifications embody the norms of the Qur’an, while in the latter case they carry the normative custom of God’s Prophet (Karčić, 1997b: 64).

   There are some similarities between fatwa and the institution of responsa in Roman law, but also significant differences that reveal the specific Islamic character of fatwa. Roman law uses the institution of responsa which comprises a body of opinions given by lawyers on disputable issues that arise during or in relation to court proceedings or when they are theoretically justified (Stojčević, 1978: 37). In the beginning responsa were given by lawyers who enjoyed their students’ trust. From the reign of Octavian Augustus onwards this function was performed only by select lawyers with whom the princeps vested certain powers in order to ensure uniformity and control of justice. Formally responsa did not have any legal force, although usually an ordinary judge could not reject the opinion of an authoritative lawyer. In the 5th century all legal acts were given legal force and the function of reponsa lost its significance with the introduction of the extraordinary procedure.

   The institution of fatwa is an important communicological element of the Islamic provenience. Unlike responsa which only deals with legal issues within the system that separates law from religion, fatwa embodies both legal and religious norms with ethical features. In Islamic law the lawyer’s creative role can only be expressed in areas that are not regulated by obligatory texts, while in Roman law there are no such situations. The change in Islamic law occurred with the introduction of the notion of “closing of the door of ijtihad”, which reflected on the legal character of fatwa, and for which there is no comparable component in Roman law. So the institution of responsa evolved along another path (comp. Đozo, 1996).

   Muslim countries did not have the same control over the development of legal doctrine as is known in Roman law, where the function of respondere was vested as a privilege only in certain lawyers. Besides being issued by official and private muftis, fatwa’s authority depended primarily on the power of the argument on which it was based.

   Ijtihad is an Islamic discipline that aims to clarify the fundamentals of Islamic law. It is one of the most important specifics and features of Islamic culture, as it proves the general relevance and contemporary applicability of Islamic law regardless of time and place, while at the same time ensuring its existence and perfection. Ijtihad is a means of finding direction and applying Sharia rules to all cases and life situations. It confirms the specific nature of Sharia as the conclusion and final testament to all previous divine laws. Since the Muslims believe it is the last revelation from God and that there will be no new divine revelations, it contains all the features and capacities to cover all human needs.

   Ijtihad is closely related to the institution of issuing fatwas. A mujtahid[4] is an Islamic scholar who is competent to independently offer opinions and solutions in Islamic jurisprudence (fiqh). In order to issue a fatwa one must have a very good knowledge of the situation for which fatwa is required, especially an understanding of the mental state of the person requesting fatwa and the general understanding of the time and place in which such a person lives.

   Fatwas are issued by muftis who are not fully comparable to mujtahids in all aspects. Mujtahids have their own methodology for resolving legal questions and are independent of other legal schools and political power, while the same does not hold for muftis. Truly a mufti can be a mujtahid, but the history of Islam has shown that his function is mainly to defend the constitutionality of the order that is based on the legal solutions laid down by a certain school of law (Džananović, 1999: 14).[5]

   In Islamic law, which regulates and sanctions the behaviour of individuals within an Islamic community, fatwa is a special form of communication of religious leaders with their followers and various publics (business people, men, women, members of other religious communities etc.).

   Fatwa is a form of order, provision, instruction, interpretation, call for action or motivation that is issued under certain social, political, economic, cultural, religious, demographic and other conditions. It is issued by Islamic religious leaders who belong to the so called ulamas, i.e. the senior or highest religious scholars whose lowest title is mufti.

   In judicial circles no one but a capable scholar who correctly and thoroughly understands the religion is allowed to form and offer the Sharia opinion. Otherwise he may declare something allowed which is prohibited, and something prohibited which is allowed, abolish certain obligations and oblige people to do what Allah does not oblige them to do, approve or introduce novelties, declare believers to be non-believers and forgive non-believers for not believing. Each and all of these acts are potentially dangerous since they arise out of a lack of knowledge or fiqh by people who dare issue fatwas and do as they please. We witness this today, when religion has become a place where the flock grazes as it pleases. Everyone who has a tongue or a pen speaks or writes about religion, although the Qur’an and Sunnah as well as the good predecessors of Islamic ummah seriously threatened those who dare enter this dangerous zone of religion without fulfilling the necessary conditions and proving readiness. And it is difficult to fulfil and prove such conditions and readiness (El-Qaradawi, 2000: 55).

   Fatwa is therefore a publicly issued, declared, verbally or otherwise issued order, provision, instruction, information, interpretation, final decision, legal opinion etc., which is, in the Islamic world and unlike in Roman law, an expression of God’s will and as such poses no other sanctions except for the moral ones which the religion interprets as punishment in this and other (posthumous) worlds. Unlike the obligatory nature of orders in other cultures and civilisations, fatwa is a constituent element of Islamic law that is based on the teachings of the Qur’an and is binding for all Muslims in relations both within the Muslim environment and within internal and external non-Muslim environments.

   Thus fatwa can be understood as a constituent institution of Sharia law that uses the holy Muslim book the Qur’an to explain what is not prescribed in detail or not sufficiently understood due to the time of occurrence, complexity and multiple dimensions of everyday life under modern conditions. Fatwa is a supplementary interpretation that points to obligatory behaviour in concrete circumstances of everyday life and daily political, economic and cultural situations. In order to understand the notion of fatwa it is important to know that fatwa emerge in times of crisis, under extraordinary circumstances and in spiritual moments of the Islamic community. When everything follows the settled or determined path there is no need for regulation through fatwa. Punishment for breach of fatwa is usually of a moral-religious nature and expressed through contempt and excommunication from the social community, which is regarded as a very severe sanction in the Islamic world, where the traditional feeling of belonging is very strongly present.

FATWA AND PUBLIC RELATIONS

   In order to evaluate fatwa as a form of largely public (and often also mass) communication within the categorial and conceptual structure of modern aspects of public relations, we should examine the basic principles of this increasingly important form of social (functional) public communication from the point of view of religious marketing, multiculturalism, ecumenism, sociology of religion, history of civilisations, ethnology, social anthropology, psychosocial aspects of geography etc.

   The first aspect is the informative component of public relations and fatwa. Fatwa is both an instruction and a legal opinion, representing information per se as well as the subject or object of information. Its intentional logic a priori means it contains information within and on the content of fatwa. Fatwa thus fulfils this component of public relations.

   The ontogenesis of the category of public relations is already contained in fatwa as an institution, notion and category. In its essence fatwa is thus a series of precisely selected public relations between the Islamic community (institution) and the public (religious believers). Fatwa is public communication that creates and counts on created public relations (based on the Qur’an and Sharia law) with the Islamic community, religious believers inter se and with external subjects (in the political, economic, religious, social, cultural and other spheres). As such fatwa belongs to what is regarded as classical public relations activities.

   If viewed from the aspect of the persuasive and binding component of public relations, fatwa (by informing, instructing and drawing attention to a concrete problem) always convinces the public (religious believers) of something and persuades them to certain behaviour, adapting the presupposed (through marketing research) value systems of Muslim customs and behaviour as regulated by the norms of the Qur’an, Sharia law, the hadith etc. In this connection fatwa represents an essential and constituent part of public relations. Its goal is not to provide neutral information but information pro domo sua, which triggers (re)active behaviour according to given instructions.

   The media play a special role in presenting fatwa to the public. It is a channel through which to reach the public. It includes largely special interest-based media such as professional and scientific publications targeting certain publics. Despite the key importance of media for public relations many PR practitioners are so busy with media coverage that they forget why contacts with the media are so important. They see the media as the publicity channel for their activity and thus believe that media coverage as such means that they address and influence several publics – none of which is far from the truth. Media includes both personal communication and specialised publications. The truth is that mass media is probably the main channel for reaching the public and as such is closest to public relations practitioners (Hunt, Grunig, 1995: 43-44). One should not forget the special role of religious media, which provides a detailed explanation of fatwa. Religious media is particularly important in non-Muslim countries where no such explanation is provided in the general media.

   Fatwa is issued in spoken or written form by the religious leader. It contains all the dimensions of promotion which unlike advertising (which pushes the object of the advertisement towards the consumer) pulls the consumer (religious believer) towards the object of promotion. Fatwa usually does not represent classical business communication. There is no negotiation or agreement – an authoritative decision is made in advance determining who is entitled to say, instruct, teach, search, write and declare and who should listen, be instructed and unconditionally respect what is prescribed or regulated with fatwa.

   In this respect fatwa does not enjoy or embody the two-way nature and equality principle typical of communication in the framework of public relations. Nevertheless, it does retain the co-orientational aspect, since respect for the Qur’an, Sharia law and hadith norms have been placed in advance on the (forced and voluntarily accepted) pedestal of perfection.

   This gives fatwa – as opposed to the basic philosophy of communication in public relations – an autocratic and metaphysical dimension. As such it can represent communication only in the case of prior acceptance and respect for Islam as religion, Allah as the almighty creator and master of this world and heaven, Mohammad as God’s last Prophet, and Islamic law as the conclusion of all prior findings.

   This certainly is the case in most of Islamic world, especially in those parts where religion has not been attributed a lay character through secularisation. There fatwa means two-way communication in which the teacher and the student roles are determined and assigned in advance, all wrapped in the divine holiness of Allah, who is personified as the great imam (religious and community leader) or ulama (with mufti the lowest title in terms of issuing fatwas).

   Public relations are a mild form of informative propaganda and communication activity whose aim is (unlike in advertising) to cultivate a long-term positive psychosocial attitude towards or opinion of a certain economic, political or religious issue. We are not what we think we are but as others see us. It is up to us to make a series of communicational activities to determine how others will see us.

   The concept of interaction covers all processes taking place between two or more persons as well as between an individual and a group of people or between groups of people. The most important process of social interaction is communication, i.e. the exchange of information. Social interaction and communication are important aspects of social psychology and other social sciences. However, social sciences evaluate social interaction and communication from the point of view of social and cultural systems rather from the point of view of individuals who are involved in interaction. The essential aspect of social interaction is that its participants constantly react to each other, trying to adapt their behaviour to their own intentions and to the expected or perceived intentions of their partners (Ule, 1997: 198-199).

   In the case of fatwa this two-way communication does not exist in the public arena. Instead it is a one-way order and those to whom it is directed must unconditionally respect it. The sanction for not following or executing a fatwa is of a moral character.

   In principle fatwa represents one-way communication, although it contains some elements of two-way asymmetrical communication (scientifically supported persuasiveness, established feedback relationship and examination of opinions), being a form of scientific persuasion based on the teachings of the Qur’an. Moreover fatwa also contains some elements of two-way symmetrical communication (mutual understanding, dialogue, balance and valuation of understanding), its goal being to overcome eventual conflicts within a society or religious community and to establish good relations with strategic publics. Fatwa is therefore a complex concept when it comes to public relations. It is actually based on the Qur’an, which requires unconditional respect and affords little or no chance for polemicising.

   The religious community should be responsible towards its publics in order to establish and maintain good relations with them. In general it should be responsible towards society as a whole. However, society is a large and ambiguous community. It is far easier to recognise the publics as groups on which the religious community can exert an effect. In order to be responsible, the religious community should answer to its public for the consequences of its actions. Responsibility means symmetrical (mutual) communication with its publics. Such communication creates productive relations that are (well) suited to the religious community. Consequently, public relations and public responsibility have become almost synonymous terms. The religious community can not enjoy good public relations if it does not act responsibly toward its publics.

CONCLUSION

   This article discusses Islamic communicational elements stemming from the Qur’an as the specific and basic conditions for understanding Islamic people (due to the complexity of this subject and the limitations of the size of this article a certain level of generalization was applied). It stems from the hypothesis that it is the lack of knowledge of the above discussed rules and practices that renders it very difficult to carry out successful marketing communication with and in Islamic environments. Hadiths as communicological norms enable a Muslim to establish better communication in relation to God, the Prophet Muhammad, fellow people and everyday life as regards religious and secular issues, as well as general communication within Islamic society and beyond. The substance of hadiths is testament to the readiness of Islamic people to respect divinity, to follow the life and work of the Prophet Muhammad, and apply hadiths to regulate life in the Islamic community as well as relations with other communities.

   The basic principle of Islam is that all secular activities, including those of an economic nature, are lawful and permitted except for those that are explicitly prohibited in the Qur’an. Islamic law enables Muslims to discover and know what is good for them, to enter freely into transactions, to conclude agreements and carry out secular activities fairly and impartially. Islamic law leads Muslims through their lives. Thus they are guided by Sharia also in communication. Companies intending to operate on a market that is partly or entirely based on Islamic law should take into account these principles in all dimensions of their activities on that market. Understanding the basic principles of Islamic religion, Islamic law, its sources, Sharia rules, ijtihad and religious-law schools is a precondition for successful marketing and business communication on Islamic markets. An important fact to bear in mind is that Islamic law adapts to the spirit of time and place. This is supported by ijtihad, which updates and harmonises Sharia rules to suit contemporary life. However, adaptation and application of Islamic law to modern societies requires a thorough knowledge of Islam. If such knowledge is lacking adaptation will not be appropriate, and market and business communication will be based on false foundations.

   In order to understand Islamic people it is essential to understand that according to the doctrine of Islamic religion Muslims submit entirely to God, and are ready to give up pleasures in this world so that they will enjoy them in the next world. For Muslims, life in this world is only a transitional phase in which they try to achieve heaven in the other, next world. Against this background marketing and business communication should be very sensitive, taking well into account Islamic teachings. Failure to respect those principles may cause serious damage to companies hoping to operate on Islamic markets, even prevent them from entering such markets. Marketing and business communication represent the first public steps of companies entering the market. If they make a mistake at this stage it will be hard to achieve success in subsequent stages.

   As regards various recently emerging situations and issues, the concept of ijtihad as a special institution of Islamic law provides answers to all of today’s questions that concern Muslims. Ijtihad establishes communication between an Islamic scholar (mujtahid) and the Islamic religious community, and represents a perfect case of two-way symmetrical communication. On the other hand the institution of fatwa represents, in principle, one-way communication, although it contains, as a form of scientific persuasion based on the teachings of the Qur’an, some elements of two-way asymmetrical communication. Moreover fatwa also contains some elements of two-way symmetrical communication, as it aims to overcome eventual conflicts within a society and/or to establish good relations with strategic publics. Fatwa is therefore a complex concept when it comes to public relations. It is based on the Qur’an, which demands unconditional respect and affords little or no room for polemicising.

   Although at first sight it may seem that marketing communication in the Islamic world is a one-way process and that Islamic societies are based on one-way communication, detailed analysis of Islamic law paints a different picture. This is borne out by the institution of fatwa, which contains some elements of two-way asymmetrical and symmetrical communication. Having in mind the above presented and discussed, it is our opinion that this article has proved on a general level the validity of our hypothesis. However, for a detailed and comprehensive analysis an additional and more extended research would be necessary.

   Marketing and business communication in Arab-Islamic societies is a mix of Western concepts and the rules of Islamic law within an individual’s traditional environment. The specific mix of elements in this equation depends on the environment or the country where marketing and business communication is carried out. The typical Islamic person is sensitive, traditional and reserved towards the West. Against such a background marketing and business communication has to be employed in the most appropriate manner, and should be adapted to the specific environment if it is not to fail, either in part or entirely.

References

Ahmed, Akbar. 1993. Living islam. London: BBC Books.

Al-Harran, Saad. 1996. Islamic Marketing Strategy. Malaysia: Longman.

Al-Hujurat: 13. http://quran.com/49/13 (24.10.2014)

Al-Nisa: 29. http://quran.com/4/29 (24.10.2014)

Ayish, I. Muhammad. 1998. Communication Research in the Arab World: A New Perspective. The Public, Journal the European Institute for Communication and Culture, Vol. V (1998), 1. Pp. 33–57.

Debeljak, Aleš. 1994. Islamska “sveta vojna” med duhom in telesom. Časopis za kritiko znanosti, let. XXII, 1994, št. 170-171, stran 14.

Džananović, Ibrahim. 1999. Idžtihad u prva četiri stoljeća islama. Sarajevo: Fakultet islamskih nauka Sarajevo.

Đozo, Husein. 1996. Fetve u vremenu. Srebrenik: Ilmija.

El-Gazali, Mohamed. 1998. Vjerovjesnikov sunnet između šerijatskih pravnika i znanstvenika hadisa. Tuzla: Muftijstvo Tuzlansko.

El-Qaradawi, Jusuf. 1997a. Halal i haram u islamu. Sarajevo: Ljiljan.

El-Qaradawi, Jusuf. 1997b. Suvremene fetve (izbor). Tuzla: Harfo-Graf.

El-Qaradawi, Jusuf. 1999. Univerzalni model društvenog života. Tuzla: Muftiluk tuzlanski.

El-Qaradawi, Jusuf. 2000. Razumijevanje prioriteta. Sarajevo: Bemust.

Enciklopedija Slovenije. 1999. Zvezek XV. Ljubljana: Mladinska knjiga.

Garaudy, Roger. 2000. Živi islam. Sarajevo: El-Kalem.

Grunig, Hunt. 1995. Tehnike odnosov z javnostmi. Ljubljana: DZS.

Guenon, Renė. 1997. Osvrti na tesavuf i tao. Sarajevo: DID.

Hamidullah, Muhamed. 1993. Uvod u islam. Jeddah: IIRO.

Huntington, Samuel. 1998. Sukob civilizacija i preustroj svjetskog poredka. Zagreb: Izvori.

Jančič, Zlatko. 1996. Celostni marketing. Ljubljana: FDV.

Južnič, Stane. 1977. Socialna in politična antropologija. Ljubljana: Partizanska knjiga.

Karčić, Fikret. 1997a. Istorija šerijatskog prava. Sarajevo: Fakultet islamskih nauka u Sarajevu.

Karčić, Fikret. 1997b. Studije o šerijatskom pravu. Zenica: Bemust.

Karčić, Karić. 1998. Šerijatsko pravo u savremenim društvima. Sarajevo: Fond otvoreno društvo BiH.

Kutb, Sejjid. 1996. Znakovi na putu. Tuzla: Muftijstvo Tuzlansko.

McInnes, W. 1964. A Conceptual Approach to Marketing. In: R. Cox, W. Alderson and S. Shapiro (eds). Theory in Marketing. Homewood, IL: Richard D. Irwin. Pp. 51–67.

Nielsen, S. Jorgen. 1986. Islam Law and Its Significance for the Situation of Muslim Minorities in Europe: Report of study project, Churches’s Committee on Migrant Workers in Europe Expert Group on Islam, Oegstgeest, November 21, 1986.

Nomani, Farhad, Rahnema, Ali. 1994. Islamic Economic Systems. New Jersey: Zed Books.

Sadeq, Abdul Hasan. 1992a. Financing Economic Development. Malaysia: Longman.

Sadeq, Abdul Hasan. 1992b. Readings in Islamic Economic Thought. Malaysia: Longman.

Sayyid, Tahir. 1996. Readings in Microeconomics An Islamic Perspective. Malaysia: Longman.

Schuon, Frithjof. 1996. Dimenzije islama. Sarajevo: El-Kalem.

Stojčević, Dragomir. 1978. Rimsko privatno pravo. Beograd.

Sušić, Mustafa. 1996. Usulu-l-fikh (Metodologija islamskog prava). Sarajevo: IZBiH.

Ule, Mirjana. 1997. Socialna psihologija. Ljubljana: FDV.

Ule, Mirjana, Kline, Miro. 1996. Psihologija tržnega komuniciranja. Ljubljana: FDV.

Vreg, France. 2000. Politično komuniciranje in prepričevanje. Ljubljana: FDV.

Weber, Max. 1956. Wirtschaft und Geselschaft. Tübingen: J. C. M. Mohr.

Zuhajli, Wehbe. 1976. Idžtihad u islamskom šerijatu. Rijad: Univerzitet u Rijadu.

 


[1] El-Qaradawi (1997a and b, 1999, 2000), Nomani, Rahnema (1994), Sadeq (1992a,b), Sayyid (1996), Al-Harran (1996), Ayish (1998), Karčić (1997a), Karčić, Karić (1998), Sušić (1996), Ahmed Akbar (1993), Garaudy (2000), Schuon (1996), Guėnon (1997), Đozo (1996), El-Gazali (1998), Kutb (1996) and Hamidullah (1993).

[2]A legal opinion based on Sharia law issued by a mufti or mujtahid (an Islamic scholar who is entitled to issue fatwas).

[3] A verse or statement in Qur’an.

[4] An Islamic scholar who is entitled to independently give opinions and solutions regarding Islamic law.

[5] For example, the renowned mujtahid El-Qaradawi (1997b: 141-142) in his book Modern Fatwas laid out some of the most important fatwas that relate to the life of Muslims.

Continue Reading
Comments

Economy

Bangladesh-Myanmar Economic Ties: Addressing the Next Generation Challenges

Published

on

Bangladesh-Myanmar relations have developed through phases of cooperation and conflict. Conflict in this case is not meant in the sense of confrontation, but only in the sense of conflict of interests and resultant diplomatic face-offs. Myanmar is the only other neighbor that Bangladesh has on its border besides India. It is the potential gateway for an alternative land route opening towards China and South-East Asia other than the sea. Historically, these two countries have geographic and cultural linkages. These two bordering countries, located in separate geopolitical regions, have huge possibilities in developing their bilateral economic relations. At the initial phase of their statehood, both countries undertook numerous constructive initiatives to improve their relations. Nevertheless, different bilateral disputes and challenges troubled entire range of cooperation. Subsequent to these challenges, Bangladesh and Myanmar have started negotiation process on key dubious issues. The economic rationales over political tensions in Bangladesh-Myanmar relations prevail with new prospects and opportunities.

Bangladesh-Myanmar relations officially began from 13 January 1972, the date on which Myanmar, as the sixth state, recognized Bangladesh as a sovereign nation. They signed several agreements on trade and business such as general trade agreement in 1973. The two countries later initiated formal trade relations on 05 September 1995. To increase demand for Bangladeshi products in Myanmar, Bangladesh opened trade exhibitions from 1995 to 1996 in Yangon, former capital of Myanmar. However, that pleasant bilateral economic relations did not last for long, rather was soon interrupted mainly by Myanmar’s long term authoritarian rule and isolationist economic policy. In the twenty-first century, Bangladesh-Myanmar relations are expected to move towards greater economic cooperation facilitated by two significant factors. First, the victory of Myanmar’s pro-democratic leader, Aung San Suu Kyi, in 2011 has considerably brought new dimensions in the relations. Although this relation is now at stake since the state power has been taken over by military. Second, the peaceful settlement of Bangladesh-Myanmar maritime dispute in 2012 added new dimension in their economic relations.

Bangladesh and Myanmar don’t share a substantial volume of trade and neither is in the list of largest trading partners. Bangladesh’s total export and import with Myanmar is trifling compared to the total export and import and so do Myanmar’s. But gradually the trades between the countries are increasing and the trend is for the last 5 to 6 year is upward especially for Bangladesh; although Bangladesh is facing a negative trend in Balance of Payment. In 2018-2019 fiscal year, Bangladesh’s total export to Myanmar was $25.11 million which is more than double from that of the export in 2011-12. Bangladesh imported $90.91 million worth goods and services from Myanmar resulting in $65 Million deficit in Balance of Payment in 2018-2019 fiscal year. For the last six or seven years, Bangladesh’s Balance of Payment was continuously in deficit in case of trade with Myanmar. The outbreak of COVID-19, closure of border for eight months and recent coup in Myanmar have a negative impact on the trade between the countries. 

Bangladesh mainly imports livestock, vegetable products including onion, prepared foodstuffs, beverages, tobacco, plastics, raw hides and skin, leather, wood and articles of woods, footwear, textiles and artificial human hair from Myanmar. Recently, due to India’s ban on cattle export, Myanmar has emerged as a new exporter of live animals to Bangladesh especially during the Eid ul-Adha with a cheaper rate than India. On the hand, Bangladesh exports frozen foods, chemicals, leather, agro-products, jute products, knitwear, fish, timber and woven garments to Myanmar.

Unresolved Rohingya crisis, Myanmar’s highly unpredictable political landscape, lack of bilateral connectivity, shadow economy created from illegal activities, distrust created due to different insurgent groups, maritime boundary dispute, illegal drugs and arms smuggling in border areas, skeptic mindset of the people in both fronts and alleged cross border movement of insurgents are acting as stumbling block in bolstering economic relations between Bangladesh and Myanmar.

Bangladesh-Myanmar relations are yet to blossom in full swing. The agreement signed by Sheikh Hasina in 2011 to establish a Joint Commission for Bilateral Cooperation is definitely a proactive step for enhancing trade. People to people contact can be increased for building mutual confidence and trust. Frequent visit by business, civil society, military and civil administration delegates may be organized for better understanding and communication. Both countries may explore economic potential and address common interest for enhancing economic co-operation. In order to augment trade, both countries may ease visa restrictions, deregulate currency restrictions and establish smooth channel of financial transactions. Coastal shipping (especially cargo vessels between Chittagong and Sittwe), air and road connectivity may be developed to inflate trade and tourism. Bangladesh and Myanmar may establish “Point of Contact” to facilitate first-hand information exchange for greater openness. Initiative may be taken to sign Preferential Trade Agreement (PTA) within the ambit of which potential export items from both countries would be allowed to enter duty free. In recent year, Bangladesh was badly affected by many unilateral decisions of India such as onion crisis. Myanmar can serve as an alternative import source of crops and animals for Bangladesh to lessen dependence upon India.

Myanmar’s currency is highly devaluated for a long time due to its political turmoil and sanctions by the west. Myanmar can strengthen its currency value by escalating trade volume with Bangladesh. These two countries can fortify their local economy in boarder areas by establishing border haats. Cooperation between these two countries on “Blue Economy” may be source of strategic advantages mainly by exporting marine goods and service. Last but not the least, the peaceful settlement of maritime boundary disputes between Bangladesh and Myanmar in 2012 may be capitalized to add new dimension in their bilateral economic relations. Both nations can expand trade and investment by utilizing the Memorandum of Understanding on the establishment of a Joint Business Council (JBC) between the Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

With the start of a new phase in Bangladesh-Myanmar relations, which has put the bilateral relations on an upswing, it is only natural that both sides should try to give a boost to bilateral trade. Bilateral trade is not challenge free but the issue is far easier to resolve than others. At the same time, closer economic ties could also help in resolving other bilateral disputes. For Myanmar, as it is facing currency devaluation and losing market, increased trade volume will make their economy vibrant. For Bangladesh, it is a good opportunity to use the momentum to minimize trade deficits and reduce dependency on any specific country.

Continue Reading

Economy

The Monetary Policy of Pakistan: SBP Maintains the Policy Rate

Published

on

The State Bank of Pakistan (SBP) announced its bi-monthly monetary policy yesterday, 27th July 2021. Pakistan’s Central bank retained the benchmark interest rate at 7% after reviewing the national economy in midst of a fourth wave of the coronavirus surging throughout the country. The policy rate is a huge factor that relents the growth and inflationary pressures in an economy. The rate was majorly retained due to the growing consumer and business confidence as the global economy rebounds from the coronavirus. The State Bank had slashed the interest rate by 625 basis points to 7% back in the March-June 2020 in the wake of the covid pandemic wreaking havoc on the struggling industries of Pakistan. In a poll conducted earlier, about 89% of the participants expected this outcome of the session. It was a leap of confidence from the last poll conducted in May when 73% of the participants expected the State Bank to hold the discount rate at this level.

The State Bank Governor, Dr. Raza Baqir, emphasized that the Monetary Policy Committee (MPC) has resorted to holding the 7% discount rate to allow the economy to recover properly. He added that the central bank would not hike the interest rate until the demand shows noticeable growth and becomes sustainable. He echoed the sage economists by reminding them that the State Bank wants to relay a breather to Pakistan’s economy before pushing the brakes. The MPC further asserted that the Real Discount Rate (adjusted for inflation) currently stands at -3% which has significantly cushioned the economy and encouraged smaller industries to grow despite the throes of the pandemic.

Dr. Raza Baqir further went on to discuss the current account deficit staged last month. He added that the 11-month streak of the current account surplus was cut short largely due to the loan payments made in June. The MPC further explained that multiple factors including an impending expiration of the federal budget, concurrent payments due to lenders, and import of vaccines, weighed heavily down on the national exchequer. He further iterated that the State Bank expects a rise in exports along with a sustained recovery in the remittance flow till the end of 2021 to once again upend the current account into surplus. Dr. Raza Baqir assured that the current level of the current account deficit (standing at 3% of the GDP) is stable. The MPC reminded that majority of the developing countries stand with a current account deficit due to growth prospects and import dependency. The claims were backed as Dr. Raza Baqir voiced his optimism regarding the GDP growth extending from 3.9% to 5% by the end of FY21-22. 

Regarding currency depreciation, Dr. Baqir added that the downfall is largely associated with the strengthening greenback in the global market coupled with high volatility in the oil market which disgruntled almost every oil-importing country, including Pakistan. He further remarked, however, that as the global economy is vying stability, the situation would brighten up in the forthcoming months. Mr. Baqir emphasized that the current account deficit stands at the lowest level in the last decade while the remittances have grown by 25% relative to yesteryear. Combined with proceeds from the recently floated Eurobonds and financial assistance from international lenders including the IMF and the World Bank, both the currency and the deficit would eventually recover as the global market corrects in the following months.

Lastly, the Governor State Bank addressed the rampant inflation in the economy. He stated that despite a hyperinflation scenario that clocked 8.9% inflation last month, the discount rates are deliberately kept below. Mr. Baqir added that the inflation rate was largely within the limits of 7-9% inflation gauged by the State Bank earlier this year. However, he further added that the State Bank is making efforts to curb the unrelenting inflation. He remarked that as the peak summer demand is closing with July, the one-way pressure on the rupee would subsequently plummet and would allow relief in prices.

The MPC has retained the discount rate at 7% for the fifth consecutive time. The policy shows that despite a rebound in growth and prosperity, the threat of the delta variant still looms. Karachi, Pakistan’s busiest metropolis and commercial hub, has recently witnessed a considerable surge in infections. The positivity ratio clocked 26% in Karachi as the national figure inched towards 7% positivity. The worrisome situation warrants the decision of the State Bank of Pakistan. Dr. Raza Baqir concluded the session by assuring that despite raging inflation, the State Bank would not resort to a rate hike until the economy fully returns to the pre-pandemic levels of employment and production. He further assuaged the concerns by signifying the future hike in the policy rate would be gradual in nature, contrast to the 2019 hike that shuffled the markets beyond expectation.

Continue Reading

Economy

Reforms Key to Romania’s Resilient Recovery

Published

on

Over the past decade, Romania has achieved a remarkable track record of high economic growth, sustained poverty reduction, and rising household incomes. An EU member since 2007, the country’s economic growth was one of the highest in the EU during the period 2010-2020.

Like the rest of the world, however, Romania has been profoundly impacted by the COVID-19 pandemic. In 2020, the economy contracted by 3.9 percent and the unemployment rate reached 5.5 percent in July before dropping slightly to 5.3 percent in December. Trade and services decreased by 4.7 percent, while sectors such as tourism and hospitality were severely affected. Hard won gains in poverty reduction were temporarily reversed and social and economic inequality increased.

The Romanian government acted swiftly in response to the crisis, providing a fiscal stimulus of 4.4 percent of GDP in 2020 to help keep the economy moving. Economic activity was also supported by a resilient private sector. Today, Romania’s economy is showing good signs of recovery and is projected to grow at around 7 percent in 2021, making it one of the few EU economies expected to reach pre-pandemic growth levels this year. This is very promising.

Yet the road ahead remains highly uncertain, and Romania faces several important challenges.

The pandemic has exposed the vulnerability of Romania’s institutions to adverse shocks, exacerbated existing fiscal pressures, and widened gaps in healthcare, education, employment, and social protection.

Poverty increased significantly among the population in 2020, especially among vulnerable communities such as the Roma, and remains elevated in 2021 due to the triple-hit of the ongoing pandemic, poor agricultural yields, and declining remittance incomes.

Frontline workers, low-skilled and temporary workers, the self-employed, women, youth, and small businesses have all been disproportionately impacted by the crisis, including through lost salaries, jobs, and opportunities.

The pandemic has also highlighted deep-rooted inequalities. Jobs in the informal sector and critical income via remittances from abroad have been severely limited for communities that depend on them most, especially the Roma, the country’s most vulnerable group.

How can Romania address these challenges and ensure a green, resilient, and inclusive recovery for all?

Reforms in several key areas can pave the way forward.

First, tax policy and administration require further progress. If Romania is to spend more on pensions, education, or health, it must boost revenue collection. Currently, Romania collects less than 27 percent of GDP in budget revenue, which is the second lowest share in the EU. Measures to increase revenues and efficiency could include improving tax revenue collection, including through digitalization of tax administration and removal of tax exemptions, for example.

Second, public expenditure priorities require adjustment. With the third lowest public spending per GDP among EU countries, Romania already has limited space to cut expenditures, but could focus on making them more efficient, while addressing pressures stemming from its large public sector wage bill. Public employment and wages, for instance, would benefit from a review of wage structures and linking pay with performance.

Third, ensuring sustainability of the country’s pension fund is a high priority. The deficit of the pension fund is currently around 2 percent of GDP, which is subsidized from the state budget. The fund would therefore benefit from closer examination of the pension indexation formula, the number of years of contribution, and the role of special pensions.

Fourth is reform and restructuring of State-Owned Enterprises, which play a significant role in Romania’s economy. SOEs account for about 4.5 percent of employment and are dominant in vital sectors such as transport and energy. Immediate steps could include improving corporate governance of SOEs and careful analysis of the selection and reward of SOE executives and non-executive bodies, which must be done objectively to ensure that management acts in the best interest of companies.

Finally, enhancing social protection must be central to the government’s efforts to boost effectiveness of the public sector and deliver better services for citizens. Better targeted social assistance will be more effective in reaching and supporting vulnerable households and individuals. Strategic investments in infrastructure, people’s skills development, and public services can also help close the large gaps that exist across regions.

None of this will be possible without sustained commitment and dedicated resources. Fortunately, Romania will be able to access significant EU funds through its National Recovery and Resilience Plan, which will enable greater investment in large and important sectors such as transportation, infrastructure to support greater deployment of renewable energy, education, and healthcare.

Achieving a resilient post-pandemic recovery will also mean advancing in critical areas like green transition and digital transformation – major new opportunities to generate substantial returns on investment for Romania’s economy.

I recently returned from my first official trip to Romania where I met with country and government leaders, civil society representatives, academia, and members of the local community. We discussed a wide range of topics including reforms, fiscal consolidation, social inclusion, renewably energy, and disaster risk management. I was highly impressed by their determination to see Romania emerge even stronger from the pandemic. I believe it is possible. To this end, I reiterated the World Bank’s continued support to all Romanians for a safe, bright, and prosperous future.

First appeared in Romanian language in Digi24.ro, via World Bank

Continue Reading

Publications

Latest

Trending