Document Type


Publication Date

Spring 2015


The Organization of the Islamic Conference (OIC) is the second largest inter- governmental organization after the United Nations Organization (UNO) with its 57 members. But until now, the OIC has not focused on economic integration as a whole. Several OIC countries members initiate to build the D-8 which consists of Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan, and Turkey, and try to develop a more intense economic cooperation. Therefore, this research will explore the possibility of D-8 economic integration as well as to identify the macroeconomics conditions that would support the existence of such economic integration. Several techniques are employed in the analysis. Johansen cointegration technique is used to estimate the G-PPP model. Panel data analysis and Vector Autoregression (VAR) is employed to analysis macroeconomic condition in D-8. The study found several significant findings in the D-8 economic cooperation. The first finding is based on the G-PPP and the output correlation suggests that the D-8 has great prospects for continued cooperation is more intensive. Second, countries belonging to the D-8 have a similarity of patterns such as trade openness, financial sector growth, and stability of the exchange rate which is the initial condition necessary to build stronger economic cooperation.