BRUNEI Darussalam is striving to develop a strong Islamic financial sector not only domestically but also to serve the regional and global markets amid brighter prospects for the world economy.

“I am very encouraged to see our Islamic financial sector expanding and gaining strength by innovating new products and services to meet our market demands,” His Royal Highness Prince Haji Al-Muhtadee Billah, the Crown Prince and Senior Minister at the Prime Minister’s Office, said in a sabda to officiate the opening of the Islamic Investment Summit 2013 at The Empire Hotel & Country Club yesterday.

According to the most recent World Economic Outlook issued by the International Monetary Fund (IMF) in April 2013, the forecast for world output growth rate is to reach 3.75 per cent this year and four per cent in 2014, His Royal Highness said.

And in the Asian region, after a subdued economic performance last year, economic growth is expected to accelerate steadily from 2013 onwards and to remain as an important engine of growth of global economy.

As a whole, Asia is expected to grow around 5.75 per cent this year largely as a result of recovering external demand and continued solid domestic demand. And closer to home, Asean economies are expected to remain strong with six per cent average growth this year.

His Royal Highness said, “Similarly, the Global Financial Stability Report (GSFR) issued by IMF stated that the financial stability has also improved. The financial markets have rallied on a broad front. Equity prices in advanced and emerging markets have risen by some 15 per cent.

“These favourable developments in the financial markets reflect the more positive sentiment and growing confidence in the world economic recovery.

“The resumption of economic dynamism and growth, particularly in Asia, means that opportunities are abound in the region, the area of investment in particular.”

And it is through such opportunities that His Royal Highness believes that Islamic finance can expand its brand of financial services and gain a further foothold in the global financial marketplace.

“I am pleased to note that for the last two decades, Islamic finance has recorded a remarkable growth and dynamic evolution, providing a broad spectrum of financial solutions to the global economy.”

His Royal Highness said that Islamic finance has established itself not only as a viable option but also an important component of the international financial system.

“By being based upon principles of equity and fairness, social responsibility and the prohibition of speculation, Islamic finance offers a unique blend of clarity and security in a market faced with uncertainty.”

Islamic finance, in the midst of the global financial turmoil, has proven to be a stable system, shielded from the undesirable effect of market speculation and manipulation. Over the last few decades, it has diversified from providing banking services to offering Takaful, project finance, asset management, private equities as well as Sukuk insurance.

The total global size of Islamic financial assets has exceeded one trillion US dollars with more than 600 Islamic financial institutions operating in more than 70 countries, as indicated in recent reports, His Royal Highness said.

Brunei Darussalam too has experienced impressive growth and penetration of Islamic financial services where as an Islamic nation upholding the national Malay, Muslim Monarchy (MIB) philosophy, the Sultanate aspires to develop a strong Islamic financial sector not only domestically but also to serve the regional and global markets, His Royal Highness said.

On the development of a genuine and effective Islamic financial system that requires a sound legal and regulatory framework based on Syariah principles as well as Syariah-compliant financial products, His Royal Highness noted that it is vital that appropriate measures are taken to provide adequate support to the Islamic financial industry in three areas.

The first area is the development of Syariah-based and Syariah-compliant products and services, which need to be continuously developed, while the capabilities and expertise in Islamic finance need to be strengthened.

Secondly is the human resource development where in a rapidly progressing industry, confronted with the challenge of a dynamic and competitive financial landscape, building adequate human capacity in terms of experience and expertise is also vital.

Thirdly is networking amongst all the stakeholders both domestically and internationally as the demand for a broader range of Islamic financial products and services, necessitates greater market research and innovation in the financial services industry, to develop new Islamic products and financial solutions and further stimulate growth.

Another area His Royal Highness believes that Islamic finance can play a more active role and make positive and meaningful contribution to the socio-economic development and economic growth of the country is to undertake viable projects under the umbrella of the Private-Public-Partnership (PPP). - Borneo Bulletin (19 June 2013)