Economic Stability in Conflict Zones: The Role of Islamic Finance in Gaza and Palestine

Abstract

This paper examines the role of Islamic finance in enhancing economic stability in conflict zones, specifically focusing on Gaza and Palestine. The ongoing conflict in these regions has severely impacted their economic stability, leading to high poverty rates, unemployment, limited access to international markets, and damaged economic infrastructure. This topic is particularly interesting as it explores alternative financial systems that could potentially provide more resilient and equitable solutions in such challenging environments. The research employs a methods approach, qualitative data to provide a comprehensive analysis. The empirical findings reveal that regions adopting Islamic finance principles exhibit more stable economic growth and reduced volatility compared to those relying solely on conventional financial systems. Specifically, the implementation of profit-sharing models (mudarabah and musharakah) and the prohibition of interest have led to increased investment in infrastructure and higher levels of social cohesion, contributing to overall economic resilience. The study concludes that Islamic finance can significantly contribute to mitigating economic crises and enhancing stability in conflict zones like Gaza and Palestine. By promoting ethical investment and equitable wealth distribution, Islamic finance not only fosters economic growth but also strengthens community resilience and social cohesion. The main take-home message is that integrating Islamic finance into the economic frameworks of conflict-affected regions can provide sustainable and inclusive pathways to economic recovery and development.