ISLAMIC FINANCE ECOSYSTEM NEEDS TO EVOLVE PROGRESSIVELY - PM ANWAR

KUALA LUMPUR, May 28 (Bernama) -- Islamic finance ecosystem needs to evolve progressively, placing greater emphasis on value-based finance, transcending the profit-driven motives or embracing a higher purpose where wealth is not just accumulated among the few but circulated to uplift communities, and investment carries a balanced promise of prosperity, said Prime Minister Datuk Seri Anwar Ibrahim. 

Addressing the Global Forum on Islamic Economics and Finance (GFIEF) here today, he said in light of this, everyone must work together to address common challenges and create opportunities for economic participation and upward mobility.

“By promoting micro, small and medium business development as well as access to finance for underserved and unserved populations, we can reduce disparities and foster shared prosperity.

“Through global integration and effective use of Islamic social finance instruments, we can bridge the gap between the haves and the have-nots and promote shared societal cohesion,” said Anwar, who is also the Finance Minister.

The Prime Minister also pointed out that the principles of Islamic economics and finance remain even more relevant to resolving the core conundrums which the world is facing during post-normal times.

He said these include lifting abject poverty, ensuring food security and enabling equal opportunity to comprehensive education. 

“This is why we have to embark on a holistic ‘islah’, a reform agenda for positive change and a force for good in the global economy,” he said.

He stressed that it is time to graduate from the conventional view of what is halal industry, what is riba’ free, Shariah compliance banking and financial instruments, to transcend it to become more in line with the ultimate higher objective of the Shariah.

“This would involve the principles of justice of equity, helping to resolve the problem of abject poverty and inequities, and require greater participation from the masses,” he said. 

According to Anwar, through global integration and effective use of Islamic social finance instruments, the government could bridge the gap between the haves and the have-nots and promote shared societal cohesion.

“This must be an effective alternative. It is not just introducing instruments introduced under a flawed, unbridled capitalist system, where progress is achieved, development is seen, but inequality persists and worsens,” he said. 

Anwar noted that half of the world’s 75 most vulnerable countries are becoming poorer compared to the wealthiest economies.

“This stark finding must compel the international community, especially the international Islamic organisations and development partners, to act swiftly and collectively.

“We must work together to enhance international cooperation with concerted, holistic and harmonised economic growth strategies including removing structural barriers, improving infrastructure, enhancing trade practices and fostering good governance in reducing economic disparities,” he said. 

In Malaysia, he said with the MADANI Economic Framework, the government attempts to focus on civilisational development.

“Beginning with the issue of governance, one of the flaws I observe is poor governance in our societies, tolerance to corruption and abuse of power, enriching those elites in power, and depriving the masses of what is their rightful place in society. 

“So we have taken measures under the MADANI Economic Framework and I must thank all the players, Bank Negara Malaysia which is pivotal in this, the Securities Commission Malaysia, and our allies, which must take the lead in promoting this new economic framework based on justice and equity,” he added.

-- BERNAMA