The advancements the Islamic finance industry has made in the last decade have resulted in wide-ranging new opportunities. However the globalization of the Islamic finance industry needs to enhance the economic well-being of countries where it is widely prevalent, affirmed Dr. Zeti Akhtar Aziz, Governor of Bank Negara Malaysia (BNM), in her acceptance speech of the prestigious Islamic Development Bank (IDB) Prize in Islamic Banking and Finance for 2012 at an award ceremony held on 3 April 2012 during the 37th Annual Meeting of the IDB Board of Governors in Khartoum, Sudan.
“While the international dimension of Islamic finance will enhance the connectivity of our economy,” emphasized Dr. Zeti, “our resolve, conviction and compassion will be needed to ensure that the greater interlinkages and thus increased interdependence will enhance economic well being. The benefits that it yields will be mutually reinforcing for our economies.”
In his citation, Dr Ahmad Mohamed Ali, President of the IDB Group, commended Dr. Zeti for “her notable accomplishments and her valuable contribution, dedication and leadership in the development of the Islamic banking and finance industry, Takaful infrastructure and Shariah governance framework in and outside Malaysia; and her invaluable services in supporting the Islamic Financial Services Board (IFSB), the creation of International Centre for Education in Islamic Finance (INCEIF) and International Shariah Research Academy for Islamic Finance (ISRA), the establishment of the Malaysia International Islamic Financial Centre (MIFC), and lately the founding of the International Islamic Liquidity Management Corporation (IILM) in Kuala Lumpur”.
Dr. Zeti stressed that in this more recent decade Islamic finance has presented a new phase of development as the industry shifts from being domestic in orientation into becoming increasingly internationalized. This shift has facilitated increased connectivity between the economies where Islamic finance is practiced, including greater movement of funds across borders from jurisdictions with surplus funds to regions with investment opportunities thus facilitating increased growth and development.
Malaysia has called on the Islamic Development Bank Group (IDB) to launch “a timely, targeted and temporary fiscal assistance or at least a multilateral sovereign-quality guarantee mechanism” to help Member Countries cope with the impact of the global financial crisis and the resultant systemic shocks.
In his statement as a member of the Board of Governors of the IDB at its 37th Annual Meeting held on 3 – 4 April in Khartoum, Sudan, Malaysian Minister of Finance II, Ahmad Husni Hanadzlah, warned that the world’s multilateral financial institutions cannot ignore the consequences of these shocks. “The multilateral financial institutions (including the IDB) must begin to think of ways and means to overcome the impact of systemic shocks on their respective member countries, not caused by deficient domestic policies but due to external shocks” he explained.