Jeddah, June (پاکستان پوائنٹ نیوز 17 يونيو 2026ء) The report was launched today during the 20th IsDB Global Forum on Islamic Finance, held in conjunction with the IsDB Group Annual Meetings in Baku, Azerbaijan.
This report is the second publication under the Development Traps Series. It examines the middle-income trap as a major long-term development challenge facing many IsDB member countries and presents policy-oriented analysis on how Islamic finance can support more inclusive, productive, and resilient development pathways.
Many IsDB member countries are still classified as middle-income countries. These economies often face challenges such as slow productivity growth, limited structural changes, financing difficulties, widespread informal economic activity, inequality, debt risks, technological gaps, and insufficient institutional capacity. These factors make it difficult for these countries to move from middle-income to high-income status.
Commenting on the launch, Acting Director of IsDBI Dr. Sami Al-Suwailem said: “The middle-income trap poses a significant challenge to development in many IsDB member countries. This report provides a timely analysis of the structural barriers affecting productivity, diversified and inclusive growth, and explores how Islamic finance can promote development through risk sharing, asset-backed financing, and social finance.”
The report argues that addressing the middle-income trap requires coordinated reforms, strengthened institutional frameworks, sustained investment in human capital, increased productivity, encouragement of innovation, economic diversification, and the development of financing models that support real economic growth.
The report is accessible on IsDBI website here: https://isdbinstitute.org/product/islamic-finance-middle-income-trap/
