Australia Sees Rescue in Islamic Finance

Grappling with a chocking financial meltdown, Australia is eyeing a share of the booming Islamic finance market to beat a growing recession and create more jobs.

Grappling with a chocking financial meltdown, Australia is eyeing a share of the booming Islamic finance market to beat a growing recession and create more jobs. "I think there's great opportunities such as Islamic finance," Chris Bowen, Minister for Financial Services, Superannuation and Corporate Law, told the Sydney Morning Herald on Monday, June 8. He said Sydney is seeking to take a portion of the booming Islamic finance market from Asia. "The majority of the world's Islamic population lives in Asia, and Singapore and Kuala Lumpur are trying to corner this market for themselves," he explained."I think Australia can play a role." Islamic finance is one of the fastest growing sectors in the global financial industry. The Islamic banking industry, which began almost three decades ago, has made substantial growth and attracted the attention of investors and bankers across the world. Currently, there are nearly 300 Islamic banks and financial institutions worldwide with assets predicted to grow to $1 trillion by 2013. Islam forbids Muslims from usury, receiving or paying interest on loans. Islamic banks and finance institutions cannot receive or provide funds for anything involving alcohol, gambling, pornography, tobacco, weapons or pork. Recession Beater Bowen, who was formerly the assistant treasurer, said luring Islamic finance would help rejuvenate the Australian economy and create more jobs. "Even if we only take a small percentage of the market it could generate a lot of wealth and a lot of jobs in Australia." A global financial crisis has swept the US and the world since September and knocked down Australian markets. Thanks to its transactions that don't deal in toxic assets or pay interests, Islamic finance institutions have managed to largely survive the crisis. Minister Bowen regretted that Australia has not yet passed a law allowing the operation of Islamic finance institutions. "This is just one example of the untapped opportunities out there for Australia." There are no Islamic banks incorporated in Australia. The country launched its first Shari`ah-compliant real estate fund in May in Bahrain with the aim of luring Muslim investors looking for opportunities in alternative investments and in new markets. "We are very good at managing money, and in superannuation we have the fourth-largest pool of funds under management in the world," Bowen said. "We've developed really good skills but we don't export those skills." Link: http://www.cibafi.org/NewsCenter/English/Details.aspx?Id=3714&Cat=0