KUALA LUMPUR, Nov 11 (Bernama) -- Prime Minister Datuk Seri Abdullah Ahmad Badawi Tuesday called on the Islamic financial community to prove to the global market that the Islamic financial system is truly a robust and viable alternative to the conventional system.
He said the current financial crisis provided the opportunity to demonstrate the uniqueness of the Islamic finance, thus the opportunity should be used wisely.
"Nevertheless, the Islamic finance community should not be complacent or unduly proud. We must continue to critically evaluate ourselves.
"For instance, have we truly established an alternative system or are we still very much mimicking the established conventional system?" he said when launching the International Shari'ah Research Academy For Islamic Finance.
Abdullah said: "As we continue our work towards establishing Islamic finance as a viable and competitive industry, we must also continue the work of clarifying and resolving some issues which still call out for meaningful solutions."
The text of his speech was read out by Minister in the Prime Minister's Department Datuk Seri Dr Ahmad Zahid Hamidi.
Abdullah said some of the Islamic finance products allowed in one Islamic country was considered dubious in another.
"Of course, Islam allows for differences in the interpretation of the shari'ah. However, there is clearly much more can be done to bring Islamic finance as it is being practised in various different jurisdictions into greater harmony," he said.
Another issue worth reviewing is the development and pricing of new Islamic financial products, as in Malaysia where conventional and Islamic financial systems run concurrently, the performance of conventional banking is still seen to be ahead.
He said obviously one must consider the "first mover advantage" enjoyed by the conventional banking system but taking this advantage into consideration, investigation must continue in the means of making the Islamic banking system more competitive compared to conventional.
As for the establishment of ISRA as a Centre for Research and Development For The Islamic Finance Industry, he said Malaysia reaffirmed its commitment towards the development of Islamic finance, especially in the area of knowledge creation and innovation.
As a full-fledged research organisation, he said, ISRA would foster collaboration between Muslim scholars in different countries to develop knowledge in areas of specific interest to the global Islamic finance community and in particular it would help find a middle ground for the standardisation of Islamic finance practices amongst Muslim countries.
Though new, ISRA has already been entrusted to undertake a number of critical research projects by both local and overseas-based organisations, including Malaysia-owned MNRB Holdings (formerly known as Malaysian National Re-Insurance Berhad) and Al-Awael Centre For Economic Consultations, Saudi Arabia.
"ISRA is now partnering itself with some highly reputable organisations, notably the Organisation of Islamic Conference (OIC), Majma' Fiqh and Bahrain Institute of Banking and Finance," he added.