Leader in Islamic Finance!

By Paul McNamara

Asia should be the leader in Islamic finance
Islamic finance has taken off in two main regions across the globe – in the Gulf countries of the Middle East and in Malaysia. Brunei has been a game contender and has launched a number of interesting initiatives in this area – but could do even more.
The truth is that Malaysia has been rather disappointing in trying to internationalise the Islamic finance industry – preferring to focus on the domestic market and issue only ringgit denominated instruments like Sukuk.
Here is where the rest of Asia can step in a do a much better job than Malaysia.
Singapore, for instance, is more of a financial centre than KL will ever be – and has a government that is prepared to back Islamic finance to the hilt.
Then there is Indonesia – that has battled through changing its capital markets legislation to make itself Shariah compliant.
And of course Pakistan which is a natural haven for Islamic finance across the entire subcontinent.
And now we see Australia getting into the act and changing their legislation to be able to accommodate Islamic finance.
But please do not underestimate plucky little Brunei: issuer of Sukuk and much more. Brunei had never issued conventional debt instruments in the past – but leapfrogged this stage and straight into Islamic debt instruments. That makes Brunei unique in the world – and a real icon for other nations to follow.
The short story is that Asia has everything to play for in this one $1,000 billion dollar industry.
But one of the core lessons that Brunei should take on board is that it must INCLUDE women in the mix. Women have not been well represented in this industry – and here is a chance to right that wrong. Women make up half the population of the earth and have a central role to play. Let’s hope that Asia can show the rest of the world some true leadership style on this front.

Paul McNamara is one of the leading Islamic finance journalists in the world, author or many books and regular feature on the conference circuit from London to Melbourne via Tatarstan, Doha, Dubai, Singapore and Bahrain.