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Trade

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The Islamic World: Past and Present What is This? Accessible coverage of Islam from the seventh century to the twenty-first century

    Trade

    Trade has always played a significant role in the Muslim world. A well-organized trade system existed in the Middle East and Central and South Asia long before the founding of Islam. During the early Middle Ages, merchant caravans carried spices from southern Arabia to markets in the Byzantine Empire. As a young adult, Muhammad participated in this trade.

    Captains of Industry.

    The establishment of Islam greatly expanded commerce in the Muslim world. The growth of the Muslim empire led to a corresponding increase in trade in the 600s and 700s. The Islamic caliphate ruled a vast area from Spain and Morocco to India and Central Asia. Uniting so many regions under one government stretched overland trade links to unprecedented distances. Arab armies, moreover, gathered large quantities of gold and silver during their conquests. The acquisition of precious metals further stimulated commerce in the Muslim world.

    Baghdad became the capital of an extensive trade empire in the 800s. An intricate network of caravan routes arose across the Middle East. Muslims imported paper, silk, rubies, ebony, and coconuts from China and India, and papyrus, cloth, donkeys, and hawks from Egypt and North Africa. They exported such goods as carpets, glassware, dates, and grains. Urban marketplaces across the empire boomed with activity, and Muslim merchants helped spread the faith.

    Muslims adopted several measures to boost commerce. Merchants developed loan procedures by which a borrower wrote a note promising to pay back money owed within a set period of time. They also formed partnerships that allowed individuals to combine their resources to fund large business ventures. Each partner shared the risks and rewards. Muslim traders introduced many banking practices used today, including modern checking.

    After 1000 , warfare and European economic development led to a shift in trading activity. The eastern Mediterranean became the focal point of commerce, and Egypt emerged as the leading center of trade. Egyptian merchants sold flax and linen in the West and bought silk and metals from Europe. They continued to profit from their role as link between Asia and the West in the spice trade.Muslim traders thrived during the Middle Ages. The following centuries, however, were a period of decline for Muslim commerce. European merchants established sea routes to Asia that allowed them to avoid Islamic markets. Muslim merchant income dropped in the 1500s, and the military defeats of the Ottoman Empire in the 1600s and 1700s brought further economic decline. In the 1800s, Western nations assumed control over much of Africa, Asia, and the Middle East. Colonial powers dominated Islamic economies. Europeans forced the leaders of Muslim countries to sign trade agreements that favored the West.

    Western Influence and Beyond.

    Colonialism continued to shape Islamic commercial patterns in the 1900s. Each Muslim country traded primarily with the European power that occupied it. India, for example, traded with Great Britain, and Algeria did business with France. For the most part, Muslim countries exported natural products and raw materials, including wheat, barley, silks, animal skins, and fruits. The Islamic world bought machinery and manufactured items from the West. These trade patterns continued in the postcolonial era, with Muslim countries exporting crude oil and importing European and American technology. Decades of European dominance left many Muslim countries economically underdeveloped, and the dominance of the oil industry hindered growth in other areas. Some Islamic leaders continue to import manufactured goods rather than encouraging scientific development and industry within their states.

    Following independence, Islamic governments made efforts to improve their trade situation. In 1969 Muslim nations created the Organization of the Islamic Conference (OIC) to promote economic cooperation among member nations. The OIC established other agencies, such as the Islamic Development Bank, to boost development. Several Muslim nations joined the Organization of Petroleum Exporting Countries (OPEC) to increase oil revenue.

    Muslim efforts at cooperation had only a modest impact on commerce, however. OPEC increased oil income in the 1970s and 1980s, but prices and production fell in the 1990s. The OIC has had little success in increasing trade among Islamic nations. Its members concerned themselves more with political unity than with economic cooperation. Moreover, Muslim leaders were reluctant to halt trade with former colonial powers because of the economic costs.

    Several Islamic nations have taken steps sought to boost trade. Turkey, for example, enacted a series of reforms to increase commerce and industrial output. Initially, the program succeeded in both goals. Turkey's volume of foreign trade increased threefold in the 1980s. By 1993 , however, political and economic problems created a trade imbalance. Recent commercial agreements with Europe led to slight improvements. Elsewhere in the Middle East, free trade agreements in Jordan and other areas offer the hope of increasing economic activity. See also Economics; International Meetings and Organizations.

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