Governments often look to equipping an educated workforce, securing foreign direct investment, and strengthening innovation as a means of achieving economic growth. However, there is a factor that has as much relevance in the race to strengthen and grow an economy. One that will have growing significance in the years to come. 

Freedom of Religion and Belief (FoRB) is a relevant area of concern across the globe as more individuals experience restrictions to practice their faith. With current world demographic trends indicating a rapidly changing religious profile, it is highly likely that countries that continue placing restrictions on their citizens freedom to worship will lose out on such economic gains.  

But how does allowing someone the freedom to practice their faith convert to an increase in a nations GDP? This article will examine the correlation between religious freedom and a nation’s economy as a global trend. 

A combined study partnering Georgetown University and Brigham Young University identified Freedom of Religion or Belief (FoRB) as one of the vital factors that contribute to economic success. The study identified 143 countries during 2011 and observed their GDP while controlling for other theoretical, economic, political, social and demographic factors. The following are some of their findings: “…religious hostilities and restrictions create climates that can drive away local and foreign investment, undermine sustainable development, and disrupt huge sectors of economies.”

The findings echo a growing concern in countries with religious hostility that fail to break free from negative trends that directly impact the strength of their economy. 

The study furthers previous work in the field done including The Price of Freedom Denied (by Brian Grim and Roger Finke, Cambridge 2011). The research showed that religious freedom is a key ingredient to peace and stability, as measured by the absence of violent religious persecution and conflict. Businesses require stable environments. 

Where there is stability there exists more opportunities for investment and growth.  

Anti-Communal Riots causing damage to businesses. 

March 6th, 2018 saw a nationwide state of emergency imposed in Sri Lanka, a result of mob attacks against the minority Muslim population in the central district. The tense situation arose as a result of an incident where a Sinhalese truck driver was injured by a group of Muslim youth. The truck driver succumbed to his injuries which lead to mass protests which included Buddhist monks .The situation was so dire that mobs were on the road looking for Muslims and even checking in the buses that were passing through Sinhala villages. . The protests soon turned violent as a 27-year-old man, from the Muslim minority community, was trapped inside a burning house and later died of his injuries. The unrest led to dozens of businesses and houses being destroyed. Four mosques, 37 houses, 46 shops and 35 vehicles have been damaged, according to Hidayath Saththar, a member of the provincial council in Central Province, Kandy.   The lax approach taken by the police who were deployed to diffuse the situation was tweeted about by the deputy ministry of national policies and economic affairs, Harsha de Silva. The tweet reads “Enough! Please stop. Don’t escalate this incident to a race riot. Police, you better follow instructions and enforce the damn law.”  As the communal violence in Sri Lanka continued to take place, the Colombo stock market dropped by index points for three consecutive days. 

The anti – communal violence that took place in 2018, against the Muslim minority, wasn’t a one off event. In fact, religious violence has taken place on several other instances. In June 2014, three people were killed with 78 injured during riots between Buddhists and Muslims in the southwestern coastal town of Aluthgama in Sri Lanka.  The riots resulted in many shops, homes, many owned by Muslims, set ablaze and vandalised.  

The events listed above point towards an unaddressed religious hostility among communities that result in these acts of violence that often yield bloody consequences. With routine fake news spreading through media that pits one community as a danger/threat to society, it is no surprise that this very community continues to bear the consequences. 

Repeatedly targeting communities for their faith and maintaining widespread perceptions of the broader community posits unspoken hurdles that prevent a nation from progressing. What could be a thriving hub of communities laying aside their prejudices and collectively working towards progress, there lies in its place minority discrimination and a stifling economy. 

Religious Restrictions and GDP

An analysis of the recent Pew study that looked into how government restrictions on religion and social hostilities involving religion indicates that 56 countries (as of 2018) or 40% of the world’s countries have had ‘high’ or ‘very high levels of overall restrictions on religion.

The analysis goes on to find a strong association between authoritarianism and government restrictions on religion. Roughly two – third of these countries listed above are classified as authoritarian. But why is this relevant to us in this context? 

Past studies have found a link between the level of religious freedom in a nation and the GDP per capita. These studies have found that GDP per capita is higher in nations with higher levels of religious freedom or that countries with increasing levels of GD per capita have increasing levels of religious freedom. 

One such study, by Gregory Chase, published in the Journal of International Business Research and Marketing (Volume 1, Issue 5, July 2016), tested this phenomenon and confirms the notion. The study titled ‘Freedom of Religion, Religiosity, and GDP per Capita’ found that Iincreased levels of religiosity and private restrictions on religion resulted in lower levels of GDP per capita. 

So how does this happen? What are the ways in which religious freedom promotes economic growth? 

• Religious freedom encourages peace: violence and conflict are elements that disrupt normal economic activities. Consider shops being burned or company property being destroyed during such conflicts. Employees would be concerned about coming to work if such violence persisted. This would no doubt affect the monthly output of the business. Moreover, conflict greatly discourages foreign investment, which is necessary for economic growth, more so in developing nations. The discouragement stems from the inability of investors to trust in climate which lacks stability. An influx of money into an environment of constant conflict is a waste of resources as the investment won’t reach its desired potential. Religious freedom is a key to stability, and stability is key for local businesses. 

• Reduces corruption: The Pew research centre has found that nations with laws and policies that restrict religious liberty have higher levels of corruption. In fact, 9/10 most corrupt countries have high or very high governmental restrictions on religious liberty according to the economic forum. When business practice good ethics and inculcate honest morals in their business model, there would be far less corruption at play. In a study of 100 biggest companies in emerging markets, Transparency International, an anti – corruption watchdog, had this to say: “The information a company reports about its anti – corruption systems are an indicator of its awareness and commitment to combating corruption. While robust disclosure practices do not reduce all risk of corruption, they are a sign of the right tone from top management, reflecting an awareness of corruption risks and a commitment to manage them effectively that is essential for companies operating across borders”.  Allowing for religious freedom fosters businesses with better morals thus creating lesser corrupt business models. 

• Reduces harmful regulation: Certain religious regulations can create legal barriers to workers, thus directly affecting economic activity. Take for example a regulation banning headscarves which can easily discriminate against women in the workplace, or anti-blasphemy laws that have been used to attack business rivals and remove competition. This results in women of certain faiths not being allowed to enter the workforce or severely being restricted in the environment they can work in. This reduces the overall output of the economy thereby lessening it.  

• Promotes diversity: Freedom of religion encourages diversity – religious pluralism in all areas of society, and diversity has been shown to boost economic growth. For example, the inclusion and participation of minorities can boost economic innovation. According to the world economic forum, “the world’s 12 most religiously diverse countries each outpaces the world’s economic growth between 2008 and 2012 showing that religious freedom boosts economic growth.” 

Recommendations:

A nation that is welcoming of its diverse groups, provides for religious pluralism, has so much potential for developing at a far considerable rate than one that is bent on a nationalist perspective, supressing minorities. Wider communal healing and correcting misunderstandings are a few ways of bridging the gap between religious communities. 

• Governments and their institutions will adhere to International standards on FoRB. 

• Creating a board to formulate organisational policy on promoting freedom of religion or belief and creating a more inclusive work culture within organisations/companies.

• Creating a means of reporting religious freedom violations anonymously, and have those grievances handled. 

• Governments and companies ensuring wholistic development and growth while ensuring their employees are respected and protected.