The Edge Daily: Despite current economic difficulties, growth in the Islamic finance industry is expected to exceed Malaysia's economic growth rate, said International Centre for Education in Islamic Finance (INCEIF) chief academic officer Professor Datuk Dr Syed Othman Alhabshi.
"So far, the Islamic finance industry has been performing better than conventional finance. For example, the Islamic banking industry used to grow in the double-digit figures in the past, especially in the late-'90s and early-2000s, and at one time even went up to about 20%.
"Of course, we don't expect that rate this year. However, I don't expect it to be 5% either. It cannot be lower than the overall growth of the economy. It will be higher," he said.
The government has forecast a 3.5% real gross domestic product growth for this year.
Syed Othman was speaking here yesterday at a press conference organised by INCEIF to highlight their Chartered Islamic Finance Professional course as well as their collaboration with the University of Reading in a Masters in Islamic finance programme.
He said the two institutions had signed a memorandum of understanding and agreement that would see the University of Reading taking some modules from INCEIF to be taught in the university's Masters programme.
It will also see the students transferred from Reading to Malaysia during the final three months of the yearly course, with the first batch expected to arrive here in June.
On the role Islamic finance can play in the current financial crisis, director of the International Capital Market Association (ICMA) Centre in the University of Reading Professor John Board said: "What Islamic finance can do is reinforce things that western bankers have understood for 200 years, but have forgotten in the last 50, which is the benefits of conservatism, transparency, and ethics."
He added that given the inability to raise capital in current conditions, any vehicle that could raise capital, including Islamic finance, would be looked at with enthusiasm.
"What's related to that, the UK has also expressed interest in becoming the Islamic finance centre outside the Middle East and Malaysia, and those discussions are continuing even during the crisis. This shows that Islamic finance continues to be taken seriously," he said.
Syed added that education in Islamic finance was important even to those working in the industry, as many of them came from a conventional banking background.
"Although they work in Islamic banking, some of them don't understand fully what Islamic banking entails, especially the syariah aspect," he said.
Asked whether Malaysia should stop trading with the US in light of the Israeli-Palestinian conflict, Syed Othman said it was not a wise decision to do so.
"They are the biggest market, and I don't think we can stop people from trading. We know the US economy will bounce back in time - but if you stop trading with them, what about the future? When they bounce back they could say, well, the last time you didn't want us, now we don't want you," he said.
Thursday, January 8, 2009
Islamic finance growth will be better than the country's, says professor
Labels:Islamicfinance,Sharia compliants Islamic Finance Growth
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