INDONESIA - EVENTS - High level conference - RAJA NAZRIN: Indonesian and Malaysian financial centers can look into products for lower income groups

JAKARTA, July 18 (Bernama) – The Indonesian and Malaysian Islamic financial centres can look into developing productive Syariah-based instruments such as micro-financing tools, incorporating Qardhul Hassan (or benevolent loans), Zakat and Sadaqah to channel financing to and facilitating the economic participation of the lower income groups, said the Raja Muda of Perak, Raja Dr Nazrin Shah. (source)

"The Indonesian and Malaysian Islamic financial centres can come together to

explore ways to promote greater economic inclusiveness. The fruits of

development need to be spread more widely and equitably," said Raja Nazrin who

is the Ambassador for Malaysia International Islamic Finance Centre (MIFC).

He said Islamic finance, founded upon the principles of social justice,

would be able to a great deal to particularly serve the needs of lower-income

groups.

In the face of rapid economic development and urbanisation, those in the

lower-income groups would have to struggle with rapidly rising food and property

prices, he said.

According to Raja Nazrin, there were several mutually beneficial ways in

which the Islamic financial centres of both countries could cooperate.

"Because Islamic finance presently represents just a small percentage of our

financial markets, it has the potential to shoulder a bigger portion of the

financial intermediation to support the robust trade and investment flows

between our two countries," he said.

He also said that there was a need to create a deep pool of human capital to

support and inform the ever-evolving industry, whether in the form of

collaborative programmes or in the form of discourse among scholars and

practitioners.

"Both our countries, and indeed the global Islamic finance industry stand to

gain from collaboration in talent development. Malaysia has developed the

International Shariah Research Academy (ISRA) and the International Centre for

Education in Islamic Finance (INCEIF).

"INCEIF has been receiving tremendous support from Indonesia, where

Indonesian students represent the majority of its foreign student body," he said

at the Joint High Level Conference on Islamic Finance by Bank Negara Malaysia &

Bank Indonesia: Enhancing Financial Linkages towards Economic Prosperity, here,

today.

He also said that Islamic finance presented viable and competitive funding

options for the countries’ economic development programmes.

In Malaysia, he said, a total funding of over US$450 billion would be

required for the economic transformation planned to take place over the next

decade, aimed to elevate the country to high-income status.

Indonesia’s recently unveiled Economic Master Plan for the next 15 years

also requires investments in excess of US$900 billion and this is expected to

turn Indonesia into one of the world’s ten largest economies by 2030, he said.

Given these transformation plans, he added that Islamic finance was well

suited to fulfilling the unmet demand for productive capital.

"A strong relationship between our financial centres will enhance our

capacity to deliver products, services and value beyond the reach of each

country individually. There is especially the need for capital to support and

encourage entrepreneurship.

"In the Indonesian Economic Master Plan, the agricultural, fisheries,

natural resources and manufacturing sectors feature strongly as drivers of

growth. These sectors, involved with real production and real assets, provide a

natural collateral base for Islamic financing," he said.–-BERNAMA

Source :  http://sg.news.yahoo.com/raja-nazrin-indonesian-malaysian-financial-centres-look-products-100834386.html - July 18, 2011