I spent a few days last week at a conference looking at the role of Asia in the World Economy and the role that Islamic Finance could play in not only assisting in a Global Recovery, but also playing an important role in the drive for Financial Inclusion. The debate and discussion were detailed with many different points of view covered. However, there appeared to be one important item that was not agreed upon. That was “who is going to drive the programme?”
There was much agreement on the need for standards, the importance of differentiating the value proposition of Islamic finance and differences of sharia ’a interpretation and variations between different countries’ operating structures, were considered to be of minor significance.
However, there was no clear agreement on who should be picking up the ball of Global Coordination and running with it. Ideas regarding the OIC, IDB and IFSB were put forward. Suggestions that Malaysia should take the lead were mooted. Consideration was given to the development of Islamic Megabanks and the role that they might play. The discussion was helpful in some ways, but it also demonstrated that there is a considerable way to go before IF truly gets on to the world stage and starts to provide a viable alternative to the conventional system.
The opportunity is undoubtedly there to make an appealing case for Islamic Finance. However, there is much work to be done on the coordination front. For the time being I see a number of initiatives being taken at individual, institution and country level. A few at regional level…..but hardly any at a global level. While I would continue to encourage the initiatives, I do have a strong sense that we need to translate the debate into concerted and focused action. If we do not, then I fear that the opportunity may pass us by.
There is always much to do and not a moment to lose.
- Islamic finance to gain from global economic turmoil (albawaba.com)