Muscat: Oman and Malaysia should embark on joint initiatives to develop a pool of professionals to drive the innovation and growth of the Islamic finance industry, said Raja Nazrin Shah, crown prince of Perak, Malaysia, and financial ambassador of the Malaysian International Islamic Financial Centre.
As the keynote speaker at the Oman Islamic Forum held here yesterday, Shah observed, "There is great potential for the Sultanate of Oman and Malaysia to harness their collective resources and forge a mutually beneficial relationship in these areas. Such collaborative arrangements are critical for spurring further development and innovation and for addressing global issues and challenges facing the Islamic finance industry. A potential area for collaboration is the development of human capital."
"The strong growth in Islamic finance has placed increasing pressure on the supply of suitably qualified professionals, especially those with cutting-edge knowledge of mainstream financial markets coupled with in-depth knowledge of the Sharia principles that underlie Islamic financial transactions. Malaysia looks forward to sharing its experiences with Oman," he added.
Focusing on the Malaysian Islamic finance scene, Shah noted, "Malaysia has taken an approach that effectively places Islamic finance at par with its conventional counterpart. In the areas of regulation and supervision, the overall philosophy is to ensure that investors and consumers of Islamic financial products and services enjoy the same level of protection, clarity, consistency, governance, and other best practices as those that apply in the conventional financial market."
He added, "The Malaysian Islamic capital market has also registered tremendous progress. The issuance of the world's first Malaysian Ringgit corporate sukuk in 1990 by a Malaysian subsidiary of the Shell Group, the launch of the first Sharia-compliant unit trust fund in 1993, and the introduction of the screening methodology of Sharia-compliant stocks in 1997 are some of our early milestones."
He stated, "Malaysia's Islamic banking assets reached $164.9 billion, as of December 2012, with an average growth rate of 18–20 per cent annually."
Talking about the global finance industry, Shah said, "The Islamic finance industry has registered a highly impressive annualised growth rate of almost 15 per cent over the past 10–15 years to reach a value of some $1.3 trillion, globally.
The value of all Islamic financial assets is forecast to reach $1.8 trillion by 2016, while cross-border financing and investment activities are expected to accelerate, especially in the Islamic capital market, as emerging economies embark on infrastructure spending."
He added, "Malaysia's commitment towards global Islamic finance is reflected in part through the implementation of the Malaysia International Islamic Financial initiative, which aims to position Malaysia as an international hub for Islamic financial activities."
Hamood Sangour Al Zadjali, executive president of the Central Bank of Oman, remarked, "The local market is expecting the Islamic banks to stimulate the country's economy. It is also expected that Islamic banks will provide financial support to the SME sector in Oman." Prof. Humayon Dar, chairman of Edbiz Consulting, released the Global Islamic Finance Report 2013, which revealed that Islamic finance is moving beyond financial intermediation and is being linked with the trillion-dollar halal industry.
Dar handed over copies of the report to Raja Nazrin Shah and Dr Yahya Mahfoodh Al Manthri, chairman of the State Council.
The Oman Islamic Economic Forum 2013 (OIEF 2013) is a gathering of policy-makers, scholars, and practitioners who are committed to the promotion of Islamic finance in Oman and in international markets. Following the success of OIEF 2011, this year's conference is expected to be a pivotal event for the industry as Islamic banks begin operations in the Sultanate.
Critical issues that will be explored include the centrality and importance of Islamic venture capital in improving R&D in the Muslim world; ways in which Islamic education must adapt to the modern age; ways in which collegiate institutions can develop curriculums that create dynamic individuals working with Islamic principles in the commercial world; failures in producing a robust human-resource pool; ways to develop employment opportunities and entrepreneurship in the Sultanate and beyond; the role of philanthropy and social responsibility in international development; developments in the Islamic banking and finance industry in the Sultanate; the role of zakat, waqf, and microfinance in Islamic finance and in developing corporate social responsibility and Islamic banking as a tool for economic reform.