Speech by The Hon. Tun Musa Hitam

2011

Oct  18th

SPEECH BY THE HON. TUN MUSA HITAM

Location Johannesburg, South Africa

  • The Hon. Ebrahim Ismail Ebrahim, Deputy Minister of International Relations and Cooperation, South Africa,
  • Distinguished panelists and guests,
  • Members of the media,
  • Ladies and Gentlemen,
  • All protocol observed.

It is indeed a pleasure to be back here in Africa. In fact these days I visit this beautiful continent quite a lot. So I know more about this region than what you find in the popular press. It is an area which is undergoing huge transformation. We at the WIEF Foundation are aware of the amazing things that are happening here and want to be part of that transformation process. We want to connect with countries and with people that the world is traditionally inclined to reject.

The WIEF first made its presence felt during our Road show here on 29th January 2011 at the Hilton Sandton. We are back here again today on 18th October 2011. A lot has been achieved during this time and we want to do more in this part of the world, in Africa.

Today, we are part of the making of the history of the global economy. We are witnessing a seismic shift in the demographics of global economics. We are witnessing, after centuries of passivity, a resurrection of the silk route. A resurrection not only of increased trade connection between different regions such as Southeast Asia, the Middle East, Africa and Central Asia, but a coming together of its peoples, and with it, a greater understanding of cultures and various traditions. We are indeed at the crossroads of history, and we are proud to cross it.

The topics that will be discussed today are hugely relevant. Africa is on the cusp of resurgence having gone through a tumultuous period in its history. The path it decides to take will either further pull it down into poverty, unemployment and environmental damage or bring long awaited growth, improved living conditions and prosperity.

The WIEF sees business partnerships as a way to that growth, improved living conditions and prosperity. Successful business partnerships and economic cooperation would enhance the quality of life of people in Africa and contribute to sustainable economic development. It is through sustained development and growth that the lives of the poor can be uplifted and poverty eradicated poverty in our respective countries.

In order to create viable businesses, Muslim countries need to upgrade their knowledge and technological skills and acquire new ideas and strategies to develop their communities and countries. It is important that investments in education and human capital development are given priority as this will ensure that we have the right expertise and manpower for our countries.

I believe the WIEF can play a useful and catalytic role in stimulating new ideas and thinking on business creation, collaboration and cooperation not only among Muslims but also between Muslims and non-Muslims.

The WIEF is different because we uphold the business agenda, and only business. We make it a point to provide solutions strictly through economic means. By its very nature, the WIEF can be an important platform for entrepreneurs and companies to gather under a common agenda of business, and in so doing, it opens its doors to each other, particularly amongst Muslim countries in Africa and the whole world in general.

The other area that will be touched upon today is the prospects for growth of Islamic trade finance in Africa. Islamic banking and finance is now reaching far and wide with participation from conventional players competing to service the global community. I can only imagine that the whole world is literally looking for a system to cope with problems related to the experiences gained from the ongoing financial crisis. Islamic banking and finance which embodies the universal principles of ethical finance and socially responsible investment has inbuilt mechanisms to protects itself from extreme shocks.

Apart from its role in contributing to global financial stability Islamic banking and finance also has the potential to support overall global economic growth. Islamic trade finance involving financial flows between the Muslim and non-Muslim world has revived and revitalized economic ties that generate mutually reinforcing growth prospects.

The right conditions need to be put into place. These include an appropriate regulatory framework and an infrastructure and architecture that promote Islamic capital markets. Islamic finance and banking must be systematically put in place, with the involvement of all stakeholders. It will require getting a higher level of acceptance of banking with the necessary ingredients of ‚Äúresponsibility, transparency and accountability‚ÄĚ as a norm in modern day banking.

Sure there is profit to be made and the Islamic bankers are no angels in disguise. But I would say that they are less averse to risks. They conduct more due diligence. They are more wary. In other words they practice safe banking.

The time is right for this. We see positive trends prevailing for the development of Islamic banking and finance. In some countries, growth is as much as 10-15 percent annually. This is indeed most encouraging and deserves full government support within the OIC countries.

Islamic trade finance can play an important role in facilitating trade transaction between global parties as a form of short term banking facility that help them manage their cash flow. Islamic trade finance can be the catalyst for growth in trade within OIC member countries and between OIC member countries and the rest of the world.

The internationalization of Islamic finance offers potential for it to become a further means by which cross-border financial flows are intermediated between economies worldwide. Moreover, Islamic finance as an increasingly important component of the international financial system could be leveraged to facilitate surplus funds to be intermediated to economies that present new opportunities.

I am sure the roundtable will stimulate a lot of discussions which will help us move forward in the areas of challenges of development in Africa and prospects for growth of Islamic trade finance in Africa. I would like to thank the participants for attending the roundtable, the organizers who have put in a lot of effort to make this event a success and last but not least our gracious host, Mr. Ebrahim Patel, here in Johannesburg, South Africa.