Economic synergy in Muslim world

Malaysia's prime minister Dato' Sri Mohd Najib Tun Abdul Razak (R) with Indonesia's president Dr Susilo Bambang Yudhoyono (L) at the formal opening of the World Islamic Economic Forum (WIEF) at the Kuala Lumpur Convention Centre in Kuala Lumpur yesterday.

Thursday, May 20, 2010

Leaders discuss greater cooperation at WIEF

LEADERS of the Muslim world yesterday talked about greater cooperation on the economic front to improve chances of reaping the fruits of an economic resurgence.

In a keynote speech at the opening of the Sixth World Islamic Economic Forum (WIEF), Malaysia's Prime Minister Dato' Sri Mohd Najib Tun Abdul Razak suggested that a new economic model for the region that is designed to meet the specific needs of the Muslim world is necessary.

At the same time, Indonesia's President Dr Susilo Bambang Yudhoyono said Muslim nations must work together to make their economies attractive to all investors, Muslims and non-Muslims alike.

Dato' Sri Mohd Najib said that an economic model should be planned as an entire "ecosystem" in line with the concept of "Gearing for Economic Resurgence", the theme of this year's forum.

"We need to think anew and move beyond our conventional frameworks. Such a model, underpinned by a theoretical framework, should not only be inclusive and progressive, but also practical in respect for policy formulation and implementation. Most importantly, it will need broad support, taking into account the requirements of the Organisation of Islamic Conference (OIC) countries," Dato' Sri Mohd Najib said.

He said it is time to consider holding an OIC Economic Summit in collaboration with the Islamic Summit Conference.

"The OIC currently has its own Islamic Summit. This conference, under its present form and structure should continue, but I believe it is time to hold one in collaboration with the other," he said.

If this happens, Dato' Sri Mohd Najib said that everyone can focus on pressing economic issues and ways to expedite decisions and actions on behalf of the Muslim world. "A dedicated, issue-orientated summit of this type would breathe new life and meaning into the OIC and overcome any cynicism towards it," he added.

He said there is no doubt that challenges faced by Muslim nations are daunting and some will see goals as unattainable. "But we cannot afford to be bystanders. We must begin with small steps and if we get it right, these small steps will drive an economic revolution that can ultimately achieve a remarkable transformation in our countries and throughout the Muslim world," he said.

Dato' Sri Mohd Najib said that it is now a period of great uncertainty for the global community and some challenges include climate change, environmental degradation and human tragedies at every corner of the globe.

"Also, there is now a growing gap between rich and poor that leads to poverty and social unrest, new challenges to national and international security and a global economic environment where the recovery is uneven and the risks of a double-dip recession for some regions are very real," he said.

Dr Yudhoyono said, "The financial crisis was a loud wake-up call for us, to address the economic imbalances between and within nations. It compelled us to work harder, to achieve the kind of growth that is sustainable, inclusive and equitable which in turn, will put ourselves in a better position to ensure social and political stability."

The president said that at the same time, the world community turned crisis into an opportunity through reforms of the international financial architecture and to design a more equitable global economic decision-making process.

"Last year, with the financial crisis still simmering, investor confidence surged in the Sukuk market, resulting in sales totaling US$17.3 billion ($25 billion) by November. Islamic banking assets rose by almost 29 per cent to US$822 billion ($1,151 billion), compared to 6.8 per cent in traditional banking assets," he said.

He also said Muslim countries must continue to play a leading role in transforming the Islamic finance sector from being considered a niche banking into something that is widely accepted as central to long-term economic stability around the world.

"The right conditions need to be put into place," he added. "These include an appropriate regulatory framework and an infrastructure and architecture to promote Islamic capital markets."

Islamic finance and banking must be systematically put in place, he added. "The time is right for this," he said. "We see positive trends prevailing for the development of Islamic finance. In some countries, growth is as much as 10 to 15 per cent annually which is encouraging."

Dr Yudhoyono went on to say that every Muslim nation has its own strength and unique capability and "we can pool these together and achieve synergy and prosper together". "For that to be possible, we need to build real and total connectivity. That not only means physical infrastructure, but connectivity in terms of ideas, attitudes, goodwill and willingness to help one another," he said.The Brunei Times