العدد الحالي: تشرين 1/اكتوبر 2018       اختر عدد :
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كلمة المجلس العام

Abdelilah BELATIK

Secretary General of CIBAFI

Welcome to the 35th issue of the Global Islamic Economics Magazine (GIEM). We keep you updated with CIBAFI’s activities and initiatives in supporting the Islamic finance industry.

I am delighted to open this issue of GIEM with an overview of the Islamic finance industry development in the global arena. Many institutions in the international level have started putting their efforts in promoting Islamic finance in their top agenda as part of initiatives to achieve sustainability and resiliency of the global economic system. One of the topical issues is the initiative of G-20 group of major nations, accounting for 85% of the global economy, to include Islamic finance in its annual agenda. Turkey has officially held the G20 presidency starting from December 1, 2014 and announced its G20 Presidency Priorities for 2015. Specific to Islamic finance, the G-20 in its annual agenda has pointed out the role of Sukuk and small-to-medium enterprises (SMEs) financing, which is part of its investment initiative to unlock private sector investments both for infrastructure and SMEs. This has been supported by a strong presence of some Muslim-majority countries that have important economic policy positions at the G-20 group, such as Turkey as holding the presidency; Indonesia as co-chair of the G-20 investment and infrastructure working group; and Malaysia as a guest representing the ASEAN. Saudi Arabia is also a member of the G-20.

The inclusion of Sukuk as a tool for infrastructure financing and Islamic Finance on the agenda of the G20 summit, which will be held in Antalya, Turkey in November 2015, could be a potential major game changer for the Sukuk market.  Saudi Arabia, Indonesia and host Turkey, working closely with the IDB, are pushing the Sukuk agenda. In fact, Turkey hosted a meeting of G20 Finance Ministers and Central bank Governors in Istanbul in February during which extensive discussions took place on instruments such as equity financing and Sukuk.  The Meeting urged regulators to include Sukuk in their monetary policy frameworks. The emerging trend shows that much deeper pool of capital in the hand of private-sector Islamic investors, and hence the Islamic Development Bank put the efforts along with the G-20 to unlock the potential. As to SME financing, the focus is to tackle the bottlenecks impeding growth, with emphasis on great importance to non-traditional sources of lending such as equity-based financing.

In response to this initiative, the B-20 group as an influential platform bringing together business leaders from G20 economies has come up with the B-20 Financing Growth Taskforce with several key aims to improve and strengthen the current global financial architecture; increase and diversify the access to equity for SMEs; and improve the financing structure of the corporate world towards a better balance of debt and equity financing. The Taskforce has selected regulatory priorities for global market regulations and best practices to promote SME financing.

Along these lines, several multilateral institutions have put Islamic finance in its top agenda. The Interdepartmental Working Group on Islamic Finance (IDWGIF) of the International Monetary Funds (IMF) is currently studying the suitability of Sukuk as an asset-based and asset-backed financing instrument for infrastructure.  The IDB also has a cooperation agreement in place with the IMF for the latter to provide technical assistance to countries interested in developing Islamic financial services including Sukuk in their jurisdictions. Part of this, the seminar, jointly organized by G20 Presidency and the IMF, convened on 16 April 2015 sought an opportunity to exchange views on the role of asset-based financing (Islamic finance) towards the overarching objectives of inclusive growth, SME and infrastructure financing, and financial stability. On the other hand, the World Bank, which under its International Finance Facility for Immunisation Co. (IFFI), has launched an inaugural $500m Sukuk Al Murabaha – a 3-year floating rate note in December 2014. This debut issue by IFFI was done on a “big learning curve” as no-one at IFFI had experience with Islamic finance, while at the same timeSukuk investors were not familiar with the IFFI bond programme.

In line with the CIBAFI’s Strategic Objectives, the Council is active in promoting global Islamic finance industry development through a strong cooperation with other multilateral institutions. While CIBAFI has been the member of the IMF’s External Advisory Group in Islamic finance, the Council is also active in the B-20 Financing Growth Taskforce with respect to Islamic finance. CIBAFI focus and efforts are determined towards achieving its four key Strategic Objectives in order to strengthen its role as the global umbrella of Islamic financial institutions. Other initiatives are being planned in all four Strategic Objectives. Stay tuned.