Islamic finance to expand role, presence in Asia

Islamic finance is uniquely positioned to expand its role and presence amid Asia's new phase of growth, with huge opportunities for Muslim nations to boost trade with each other.

Perak regent Raja Dr Nazrin Shah said Asia is entering a new phase of growth, with increasing significance of the E7 emerging economies, of which four are in Asia.

He said while world trade has expanded by an average of 10 per cent, trade between the Middle East and the rest of Asia rose at the average of 25 per cent.

"Despite this, enormous opportunities remain for Muslim nations to increase trade with each other, given that intra-OIC (Organisation of Islamic Conference) trade currently accounts for only between 10 per cent and 13 per cent of the OIC's global trade," he said in a keynote address at a luncheon in conjunction with the Malaysian International Islamic Financial Centre (MIFC) roadshow here yesterday.

The luncheon was co-hosted by MIFC and Standard Chartered.

Raja Nazrin, who is MIFC financial ambassador, said Islamic finance, with its well-established regulatory and legal frameworks, also opens up prospects for developed economies to forge stronger financial linkages with Asian and the Middle Eastern countries.

"In the aftermath of the global financial crisis, there has been a heightened interest in Islamic finance as an alternative to conventional finance," he said.

Speaking to some 150 people from business and investment community in the UAE, in addition to some 50 delegates from Malaysia, Raja Nazrin said Malaysia is committed to expand the outreach of Islamic finance.

He elaborated the steps taken by the country to grow all aspects of Islamic finance, including human capital development.

Raja Nazrin also highlighted the reform measures under the New Economic Model, which will unlock investments, increase labour productivity and boost efficiency to life the real growth rates to an average of 6.5 per cent per year between 2011 and 2020.

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