A summit of the D-8, or developing eight countries, which includes businessmen and government representatives from Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan, Turkiye, and Bangladesh, took place in Dhaka, Bangladesh. The 20th Session of the D-8 Council of Ministers was held in hybrid format on 27 July 2022. Business executives and government representatives from eight developing countries met and agreed that greater cooperation was required if they were to overcome supply chain disruptions, a growing energy problem, and declining foreign currency reserves.
The D-8 Organization for Economic Cooperation’s goals are to strengthen member states’ positions in the world economy, diversify and open up new trade opportunities, increase involvement in global decision-making, and raise living standards.
During a seminar on “Cooperation in Development” conducted in Istanbul in October 1996, Prof. Dr. Necmettin Erbakan, the Republic of Turkiye’s then-prime minister, proposed the notion of cooperation among key Muslim emerging nations. The group envisioned collaboration between nations spanning South East Asia and Africa. The Seminar was attended by representatives from Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, and Pakistan. This conference was the first step in the formation of D-8, but it wasn’t until a number of preparatory meetings that D-8 was formally established and started operating with the release of the Istanbul Declaration at the conclusion of the Heads of State and Government summit held in Istanbul on June 15, 1997.
D-8 is a global rather than a regional organisation, as evidenced by the membership of the group. Organization for Economic Cooperation (D-8) is a forum that has no negative effects on the member countries’ bilateral and multilateral obligations resulting from their membership in other global or regional organizations.
The present world economic scenario offers D-8 a broadened scope. The World Trade Organization’s (WTO) multilateral trade regime lost its momentum as a result of wealthy countries’ noncompliance and member states’ lack of cooperation. The lengthy characteristics of the WTO’s system may be due to international politics and disagreements between the USA and China, LDC versus developed members, and lastly the voluntary nature of implementation capacity.
Due to disagreements between two or more nations, regional trade blocs are also deteriorating and becoming inactive. For instance, the rivalry between two big neighbors, India and Pakistan, has paralyzed the SAARC. The NAFTA spirit was ignored by then US President Donald Trump, the EU spirit was harmed by Brexit, and the TPP died when the USA left it. The outbreak of Ukraine war after a global pandemic has complicated global trade and cooperation architecture. Western sanctions on Russia are creating major roadblocks towards a flourishing global trade. The post-pandemic challenges, the ongoing war-torn global economy, and other crises remind developing countries that there is no other way to speed up regional trade, abolish trade barriers, and address other challenges.
The Gulf Arab factor plays a critical factor when it comes to keeping up with Iran and Turkiye. Pakistan and Bangladesh, whose economies are immensely dependent on the remittances sent from Gulf Arab countries do not seek to irk the Gulf monarchies, who have frosty ties with Iran and tense relations with Turkiye. Nigeria is combating insurgencies and radical terrorism at home despite having huge petrochemical resources. Malaysia is seen as a close partner of Turkiye while Egypt is a staunch ally of Saudi Arabia-UAE faction in the gulf. The biggest economic success story is thus limited to Indonesia only, which is a future global economic star.
Henceforth, it is up to D-8 chair Dhaka to step up and play a leading role for bridging the differences and start managing from the common issues that connects these eight Muslim majority countries. Trade offers a promising avenue.
When the D-8 was first established, intra-trade between the member states was worth $14 billion; it is now worth $129 billion. Bangladeshi Foreign Minister AK Abdul Momen predicts that within the next ten years, trade between the D-8 nations will total $1.3 trillion.
The D-8 countries collectively have a $5 trillion economy with a variety of strengths in the basic, secondary, tertiary, and quaternary sectors, according to Sheikh Fazle Fahim, president of the D-8 CCI (D-8 Chamber of Commerce and Industries). There is $70 billion in trade between the D-8 nations. If the nations are able to use their potential, they might reach $500 billion in the following five years.
The D-8 CCI is creating a strategic roadmap for PTA (Preferential Trade Agreement) ratification and engagement in value chain integration across the agricultural, manufacturing, tertiary, and quaternary sectors as a response to economic uncertainties and risks caused by the aftermath of the Covid-19 pandemic and significant global developments.
Currency devaluation or volatility can be addressed through alternative trade financing. Bartering—exchanging goods for other goods—and currency swaps among the D-8 nations can be ways to achieve this. With three nations, Indonesia has already begun this currency exchange.
Employing value chain integration in the long run to mitigate supply chain volatility with pegged price guarantees and ensure secured livelihood, employment and investment, unified standardization and harmonisation of processes to address non-tariff barriers, Blue Economy can be launchpads for closer interaction between D-8 countries.
As the world is on the cusp of a new cold war, D-8 has all the potentials to play a crucial role in an emergent multi-polar world order. Mutual strengthening of partnerships across trade, currency swaps, energy security and connectivity will strengthen the footing of D-8. At the same time, the countries will need to employ realpolitik to avert fallout from significant global crises. In this aspect, D-8 needs to employ its resources to emerge as a major bloc like SCO, BRICS, EAEU, and look to broaden D-8 to D-8+.