Contributed by Gregory Das and Fahri Azzat
The first session on Islamic international finance at the International Malaysia Law Conference 2012 attracted a large and highly-interested audience. Mr. Jal Othman moderated the session, which included a reputable panel of speakers from the fields of academia and commerce.
The three panelists shared the view that Islamic finance has grown at a prodigious rate internationally and commended Malaysia for being globally recognised as a global leader in this area.
The first speaker was the amiable Professor Andrew White of the Singapore Management University. Professor White said one would be hard-pressed to identify another industry that has endured as much consistent growth internationally as Islamic finance over the past few years. In some jurisdictions the industry has experienced a 20-40% growth. He advised any lawyer intending to enter the field of Islamic Finance to be conversant in the core areas of law such as insurance law and commercial law.
The second speaker was Mr. Daud Vicary Abdullah who is the President and CEO of the International Centre for Education in Islamic Finance (“INCEIF”). He claims that one of the main advantage of Islamic Finance was that it promoted financial inclusion worldwide and ensured that most people around the world have easy access to financial services. Mr. Daud said that good ethics are firmly embedded in Islamic Finance. He claimed that was why the industry appeared attractive to both developing and mature economies. In concluding his presentation, he described Malaysia as having an enviable reputation as a “global leader in Islamic Finance”.
The final speaker was Mr. Mohamed Rafe bin Mohamed Haneef, the CEO of HSBC Amanah. Mr. Rafe commenced his segment by underscoring the similarities between Islamic Finance Law and the common law. He cited the frequent application of the doctrine of promissory estoppel within the legal principles of Islamic Finance as an example. He predicts that by the year 2020, Islamic Finance would see a more equitable distribution of wealth and greater equality in the sharing of risks amongst the consumers of its services. He described the present market as being predominantly risk averse although he expects a gradual transformation of the Islamic Finance industry in the years to come.
The session concluded with a question and answer session which saw members of the audience accede to Mr. Jal Othman’s earlier request to “slice and dice” the panelists with penetrating questions. During the session, Professor White and Mr. Daud agreed that the reason for Malaysia’s success in the field of Islamic Finance was the political will to develop the industry domestically, which was driven by Bank Negara.
Professor White and Mr. Rafe both said that there was a need to dispel the perception that only those steeped in Islamic Law were best suited to enter the field of Islamic Law.
All the panelists assured the audience that the industry was well suited for those with a good grounding in the conventional areas of the law because of the commonalities between the common law and Islamic Finance Law.
In response to a question on Malaysia’s achievements in this area, Mr. Rafe said that Malaysia still could do more to entrench itself as a leader in the field. He suggested that Malaysia should take the opportunity to establish its presence overseas as there are currently only a few lawyers and banks that are branching out beyond the local borders.