The role of venture capital in the Middle East as a catalyst of socio-economic transformation: A post 9/11 analysis

Abstract

Although the occurrence of disasters (either man-made or natural) has an impact on the economy, the impact of 9/11 was completely different from any other man-made disaster, especially in the global venture capital (VC) arena. This article analyzes the impact of man-made disasters from a historical perspective and the impact of 9/11 on the emergence of Islamic venture capital (IVC) in the Middle Eastern region. What makes VC and its variants, including IVC, more attractive in the present situation of financial crisis is that VC has inherent potential to transform the economy, which is the reason VC is preferred as an alternative financial instrument. An overview of the present scenario of IVC grants some insights on the future potential of the Middle Eastern region to become economically self-sustainable and the possibility of becoming an economic giant in the near future. And if in the Middle East, the problem of unemployment slowly dissipates the mind-set of younger generations may change positively, transforming their economy into a welfare economy rather than a warfare economy.