In this critical chapter, Professor Dr. Abul Hasan M. Sadeq tackles one of the most complex issues for developing Muslim nations: securing external capital without compromising Shari'ah principles. While mainstream economics relies heavily on interest-bearing foreign debt, Professor Sadeq proposes an alternative paradigm centered on Equity-based Finance and Risk-sharing.

The research identifies several viable external sources, including:

• Foreign Direct Investment (FDI): Encouraged as a primary source, as it involves real production and shared risk rather than fixed-interest obligations.
• Joint Ventures (Musharakah): Facilitating international cooperation where capital and expertise are pooled, and profits/losses are distributed equitably.
• International Trade Financing (Murabaha): Using cost-plus-profit arrangements to facilitate the import of essential capital goods.
• Qard al-Hasan (Interest-free Loans): Proposing a model for inter-governmental aid between resource-rich and resource-poor Muslim nations based on brotherhood rather than exploitation.

Professor Sadeq warns against the "debt trap" inherent in conventional external borrowing, arguing that Islamic external finance promotes more stable, long-term economic growth by linking financial returns directly to the success of real-sector projects. This work provides a vital theoretical foundation for what is now known as the "Islamic Capital Market."

Core Concepts: External Finance, Foreign Direct Investment (FDI), Equity Financing, Risk-Sharing, Debt Trap, International Trade, Musharakah, AUB.