MANAMA: The world is looking for sustainable, ethical and inclusive economic growth, thanks to the global financial crisis of 2007-8, according to CBB Chief.
“Islamic economics and finance, if practiced in the right spirit, provides an ideal alternative. The Global Islamic Investment Gateway facilitates greater accessibility to investors and asset managers for investment deals in the Islamic world. Better information exchange, greater transparency and closer interaction between potential investors and investees will hopefully accelerate the investment decision making process, which is the primary objective of this conference,” Rasheed Mohammed Al Maraj, Governor, Central Bank of Bahrain (CBB), told the audience in his keynote address at the Global Islamic Investment Gateway (GIIG).
“Islamic finance can play a central role in creating an alternative, more resilient economic and financial system. The core of Islamic finance is based on real economy transactions, rather than on speculative financial transactions or financial engineering. Due to the asset-backed nature of these transactions there is a one-to-one correlation between the real and the financial economy. This means that there are less chances of creation of asset bubbles and more opportunities to create jobs in the real economy. Additionally, the risk sharing nature of Islamic finance contracts, as opposed to risk transfer in conventional finance, leads to a more equitable, fair and balanced outcome for the stakeholders. As a result a system based on Islamic finance values and principles is likely to be inherently more resilient in times of crisis,” the CBB Governor explained.
“The world is changing rapidly before our eyes. This century is being called the century of Asia and emerging markets, where most of the Muslim countries belong.
“The Islamic finance industry has done quite well in terms of employment generation and a significant number of incremental jobs in the financial sector across the GCC over the last decade have been from the Islamic banking & finance sector. If the industry continues to grow at the current 15% annual rate over the next decade, many new jobs will be needed to sustain this growth.
“As a global Islamic finance hub Bahrain has been preparing itself to take advantage of these opportunities. We are home to Islamic finance bodies such as the Waqf Fund, Accounting and Auditing Organization for Islamic Financial Institutions, International Islamic Financial Market, General Council for Islamic Banks and Financial Institutions and International Islamic Rating Agency. Bahrain has a legal and regulatory framework which is being constantly updated to match the pace of global regulatory changes such as Basel III. We have taken several steps to improve the corporate governance of the financial sector in Bahrain. Given the importance of Shari’a governance for Islamic banks we are in the process of issuing a comprehensive Shari’a governance module which will further strengthen the governance of the Islamic finance industry. We have been investing in Islamic finance training, education and research through the platforms of the Waqf Fund, Bahrain Institute of Banking & Finance and University of Bahrain. We are always open to sharing our experience in Islamic finance with up and coming markets in Middle East, Africa, CIS and elsewhere. Just in the last 12 months we had the pleasure of hosting several delegations from these markets,” he added.