Islamic finance could transform global health — if we put it to work

Global health financing is at an inflection point. Traditional development assistance is shrinking, domestic budgets are under pressure and health needs are rising everywhere, driven by emergencies, demographic change and the growing burden of noncommunicable diseases. For countries across the Eastern Mediterranean region and the wider Global South, these pressures are particularly acute.

For many years, the World Health Organization has worked with governments to prioritize health in public spending and government budgets, strengthen public financial management, improve efficiency through strategic purchasing and advocate for predictable, pooled financing — including in fragile and conflict-affected settings. The objective has been to build resilient, equitable health systems capable of delivering universal health coverage and ensuring health security.

But the context has changed. External assistance for health has declined by about 40 percent globally, even as demand for services continues to grow. This is forcing countries to rethink how they expand fiscal space for health — not by replacing public financing but by complementing and reinforcing it.

This new reality calls for a broader approach to health financing: one that looks beyond traditional sources to innovative mechanisms capable of mobilizing new capital while strengthening equitable pooling to ensure financial protection for all.

External assistance for health has declined by about 40 percent globally, even as demand for services continues to grow

Dr. Hanan Balkhy

In this context, Islamic finance stands out as one of the most credible and values-aligned opportunities available to our region. With assets exceeding $4 trillion — much of it concentrated in the Gulf and the 57 member states of the Organization of Islamic Cooperation — Islamic finance is grounded in principles that closely mirror those of universal health coverage: solidarity, fairness, shared responsibility and investment in the real economy. Yet, despite its scale, its contribution to health systems remains modest and fragmented.

Experience across OIC and WHO member states shows that Islamic finance delivers results when three conditions are met. First, it must be anchored in nationally defined health priorities. Second, it must be governed with transparency and accountability. And third, it must be designed around measurable health impact.

Where these conditions are in place, Islamic instruments are already making a difference. Zakat and waqf funds have subsidized health insurance for low-income households, financed primary care facilities and expanded access to treatment for vulnerable populations. Sukuk and blended Islamic financing mechanisms have supported primary healthcare, infectious disease control and preparedness in lower-income settings. These are proven approaches that can be scaled.

What Islamic finance is not — and should never be portrayed as — is a substitute for strong public financing. Public budgets remain the backbone of every health system. But Islamic finance can play a powerful complementary role: helping governments close critical gaps, mobilize ethical and predictable capital, and de-risk innovation at a time of tightening global resources.

Strengthening public financing for health is not always about mobilizing more money. It is also about using resources better — more fairly, more efficiently and more sustainably. Islamic finance aligns naturally with this trajectory. When deployed coherently, it reinforces public systems rather than fragmenting them.

The goal should be clear proof that Islamic finance can systematically strengthen health systems as smart, values-driven investment

Dr. Hanan Balkhy

This week in Riyadh, the WHO and its partners took a concrete step forward with the launch of a Coalition on Islamic Financing for Global Health. The coalition brings together ministries of health and finance, the Islamic Development Bank, the OIC, philanthropies and private sector partners. Its goal is practical: to help countries turn health priorities into investable projects and connect Islamic capital directly to health system needs.

The challenge now is execution. The focus must be on using existing tools — sukuk, waqf, zakat, sadaqah and takaful — more systematically and at scale, in line with national plans.

There is also a major opportunity for innovation. Across the Gulf, digital payments, fintech platforms and new transparency tools are reshaping Islamic finance. These technologies can help track every riyal or dollar and link funding to clear health outcomes. A results-linked sukuk for health, for example, could ensure money is tied directly to services delivered and lives improved.

The next 12 months will be critical. Pilot countries must be selected. Joint investment programs must be launched. Results must be measured and shared. By the time of the Islamic Development Bank annual meeting in 2026, the goal should be clear proof that Islamic finance can systematically strengthen health systems as smart, values-driven investment.

Islamic finance and public health share the same values: compassion, justice, solidarity and human dignity. If we put Islamic finance to work — with focus and accountability — it can become a powerful force for global health at a moment when the world urgently needs new solutions.

• Dr. Hanan Balkhy is the World Health Organization’s Regional Director for the Eastern Mediterranean.