Determinants of success in Islamic public-private partnership projects (PPPs) in the context of SDGs

Abstract

Public Private Partnerships (PPPs) should not be assumed as a panacea in development finance since regardless of decades of infrastructure development by Multilateral Development Banks (MDBs) and local governments, human misery in the form of poverty and hunger persists on earth. Given the persistence of such stalemate in the development arena, the main aim of this paper is to bring the ignored aspects of infrastructure PPPs into the light, propose guidance based on the priorities of Islamic economics and finance and initiate a discussion on the success factors of infrastructure PPPs. As a methodology, qualitative technical review for stock-taking of real-life examples is employed. The analysis focuses on Islamic-finance perspective. The major finding of the research is that putting infrastructure PPPs within priorities of Islamic finance as a method can illuminate the path to success in achieving sustainable development goals. While identifying the three pillars for success: maqasid al-shari'ah, shari'ah compliance, and resource mobilization from Islamic capital markets, a framework table is proposed to signal the likelihood of success in Islamic PPPs as a result of such systematic evaluation. Traditional risk issues are well addressed in PPPs with vast real-life experience and have been subject of many academic studies, hence, this paper dwells on Islamic finance aspects alone.