Bandar Seri Begawan - His Royal Highness Prince Haji Al-Muhtadee Billah, the Crown Prince and Senior Minister at the Prime Minister's Office in a sabda called the Islamic banking sector in the country to be more "entrepreneur-friendly" through the provision of various "Syariah-compliant" financing instruments.
The Crown Prince believed that this will provide more opportunities for Muslim entrepreneurs to be active in their respective entrepreneurial interests.
HRH believed that the inclination towards that effort also ran in sync with the aspiration of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam to improve the 'ease of doing business' in the nation.
HRH delivered a sabda at the officiating ceremony of the three-day International Conference on Islamic Finance 2012 (ICiF) and 6th Regional Syariah Scholarships' Dialogue (MCSN) at the Rizqun International Hotel in Gadong yesterday.
HRH also praised the thriving Islamic banking sector at a time when the conventional banking sector was rocked by a credit crisis which globally jeopardised many prominent banking and financial institutions, leaving some to collapse. "It has threatened the confidence of investors and caused a direct impact on global stock markets and finance. More worrying. the crisis which was instigated by the finance sector has spread to the 'global real economy', which has forced many countries to dive into a recession, causing retrenchments, hence loss of income." HRH said.
Although many initiatives were implemented to restore the confidence level of the global financial system, HRH said until today, economic growth and people's confidence in the system remains to be weak.
HRH said the economic crisis has taught us a valuable lesson. "In my view, it has dearly uncovered the conventional financial systems' flaws in various aspects; from its business model, governance or rules and regulatory aspects which need to be addressed and improved."
Hence, in comprehending with this situation, HRH said Islamic scholars are keen to highlight the Islamic economy and financial system that is built upon religious principles and norms well-suited to be developed as an alternative that can guarantee a holistic solution to troubles faced by the conventional system. However, to achieve this aspiration is not easy and is challenging," HRH added.
Meanwhile, HRH said it is good to note the encouraging levels of expansion rate and growing acceptance of Islamic finance.
HRH quoted information extracted from the Financial Times recently which stated that the Islamic finance industry is growing at a fast pace, recording total assets valued at US$1.1 trillion. "Reuters also reported that Islamic finance has recorded an average annual growth rate of 15 to 20 per cent since the last few years and forecasted that Islamic finance assets will reach $2 trillion in the next three to five years."
HRH said it should be acknowledged that one of the main reasons of growth is the rapid economic development and increased prosperity of Islamic countries in the last few years.
The organising of the conference yesterday, HRH added, comes timely as Islamic finance institutions and industries are experiencing rapid development "This considerable progress has brought together many intellectuals and scholars with economic and Islamic finance background to come up with innovative ideas as an endeavour to strengthen the Islamic finance systems' position globally"
HRH said, "In our endeavour to develop the Islamic finance industry, we must ensure its strong position, making it capable of handling any crisis or challenges ahead. It should also be expanded in keeping up with the tide of time."
HRH added that the Islamic finance industry should be driven on methods and instruments that are genuinely Syariah compliant and competitive if compared to the conventional finance system in offering benefits to its clients, whether asset-owners or entrepreneurs and sectors that need financing.
At the same time, HRH said it is crucial to establish comprehensive laws and regulations to uphold the Islamic finance industry.
Touching further on the conference yesterday, HRH hoped that it would draw attention to new ideas that would contribute to a more rigid framework for the existing Islamic finance system, and also hoped that it would resolve current issues faced by the global Islamic finance system.
"This includes the assessment towards resolving main issues linked with inherent ambiguity and doubt on Islamic finances' goals, methods, operation and products offered, by shedding more light on the aspirations of Islamic finance to avoid any misconceptions on it," HRH said.
HRH added that such issues, if not handled wisely and convincing enough, would impede the expansion of the Islamic finance system if various negative perceptions and reactions deduced by community groups that liken the Islamic finance system to that of a conventional finance system (that practises capitalism, riba and is profit-driven) continue.
In his view, HRH said. "The solution to this problem lies at how far our methods of managing finances are in terms of sincerity and earnest efforts in fulfilling 'Masaqid Syariah', which is upholding the religion, life, intellect lineage and property
"In other words, a resilient Islamic finance system ought to genuinely embrace the Islamic religion, in practising faith and in complying with Islamic Laws to obtain blessings from Allah the Almighty and should not be established with a main purpose of earning profit only," HRH added.--Courtesy of Borneo Bulletin