6th World Islamic Economic Forum

By Wednesday May 19th, 2010 No Comments

Assalamualaikum Warahmatullahi Wabarakatuhand Good morning.

HM Sultan Hassanal Bolkiah;
Sultan and the Yang Di-Pertuan of Brunei Darussalam,

H.E. Abdoulaye Wade;
President of the Republic of Senegal,

H.E. Dr. Susilo Bambang Yudhoyono;
President of the Republic of Indonesia,

H.E. Dr. Fatmir Sejdiu;
President of the Republic of Kosonovo,

H.E. Mohamed Nasheed;
President of the Republic of Maldives,

H.E. Sheikh Hasina;
Prime Minister of the People’s Republic of Bangladesh,

H.E. Mohmammad Reza Rahimi;
First Vice President of the Islamic Republic of Iran,

The Hon. Tun Abdullah Ahmad Badawi;
Founder Patron of the WIEF,

The Hon. Dato’ Sri Anifah Aman;
Minister of Foreign Affairs, Malaysia,

The Hon. Tun Musa Hitam;
Chairman of The WIEF Foundation,


Distinguished guests,

Ladies and gentlemen,

1. I’d like to begin by extending a warm welcome to our honoured Heads of State and Government present. We are delighted you could participate in this – the inaugural session of the 6th World Islamic Economic Forum.

2. My sincere greetings also go to our guests and forum delegates.

3. I want to take this opportunity to thank the WIEF Foundation, under the Chairmanship of Tun Musa Hitam, for selecting Kuala Lumpur as the location for this important event.

4. This annual forum provides an unparalleled platform for productive discourse and collaboration, as we work to enhance the economic well-being of the Muslim business community.

His Majesty, Excellencies, Ladies and Gentlemen,

5. We are gathered here in a period of great uncertainty for the global community:

* issues, such as climate change, environmental degradation and human tragedies affect almost every corner of the globe, with natural disasters becoming more prevalent.
* a growing gap between the rich and the poor that leads to poverty and often social unrest.
* new challenges to national and international security.
* and a global economic environment where the recovery is uneven and the risks of a double-dip recession for some regions of the world are very real.

6. So, today I’d like to touch on a few areas that I believe are central to our collective efforts to build strong, sustainable economies and fair and just societies.

7. On the economic front, while some countries, including Malaysia, are experiencing a return to strong levels of economic growth, others are still grappling with excessive debt burdens and significant financial pressures. Progress is being made at different speeds in different regions of the world, but we should be clear that the recovery is fragile at the moment. The economies that succeed will be those that act prudently, make wise decisions for the long-term and to initiate bold reforms that will make them competitive in a new global economic order. Indeed, now is not a time for the faint hearted to recede or return to the old status quo. What the Muslim world needs now and indeed the whole world needs now is more effective government.

8. That is why I recently set out the principles of a new economic model for Malaysia that aims to:

· Use capital more effectively to increase productivity, stimulate innovation and enhance the skills of the Malaysian workforce;
· We seek to end an over reliance on a few dominant sectors, when what we need is strength across many sectors and industries, particularly areas of high value growth such as technology, financial services and energy;
· To build a more merit-based, more globalised education system to reward excellence and help us develop the skills of our children and retain the skills in the country that our economy need;
· We want to rebalance the relationship between the private and public sectors, where we recognise the role of the government to empower and enable wealth creation in the private sector, across all groups and income levels; and
· Implement fiscal reforms that broaden the tax base, and gradually phase out broad-based subsidies that distort the market and lessen our competitiveness.

9. We will act to address these issues because our goal for Malaysia’s economy is no less than one that seeks to achieve high-income economy, inclusive and sustainable where all Malaysians share in growing prosperity. A strong economy and a fair society going hand-in-hand

Ladies and gentlemen,

10. Among many Muslim countries, the need to address economic inequity is also real. Muslims around the world are dealing with extreme poverty, illiteracy, malnutrition and a widening gap between the rich and the poor, especially in developing OIC countries. The top 20 countries in the Organisation of The Islamic Conference contribute 90 percent of the OIC’s GDP, totaling 4.5 trillion US dollars. The remaining 37 countries contribute only 10 percent. OIC member countries have not escaped the global financial crisis. Many have been seriously affected by the deterioration of current account balances and the sudden drying-up of capital inflows. The financial crisis has increased food prices, which has reduced resources available for basic social services like education, healthcare and housing.

11. The key issue of food security was discussed during the 5th WIEF in Jakarta. It is indeed a shame to see parts of the Muslim world today unable to feed itself or to assist fellow Muslim countries in ensuring an adequate supply of basic foods. Some have become totally dependent on non-Muslim countries after natural disasters. It is time that the utmost priority be given to food security through the support and involvement of both governments and the private sector. This is an overarching prerequisite before we can commit ourselves to economic resurgence.

12. One area of opportunity is the burgeoning halal market. Its assets are estimated to be worth more than 1 trillion US dollars, which bodes well for the development of various halal hubs worldwide. This is indeed a positive development, as no single halal hub can cater to the global needs of the Muslim Ummah. To achieve this, linkages must be established between regional hubs to ensure coordination and standardization of halal products. Such linkages would enable efficient sourcing and deployment of halal products by donor countries and non-government organisations when Muslim communities face natural disasters.

13. The subject of energy security is also pertinent today. We need to make the green agenda central to policy making. The current reality must be recognized: we all stand accused of doing too little too late. Otherwise we need to do more to develop alternative energy sources that address growing requirements and prevent further degradation of the environment. More intergovernmental collaboration is required to formulate policies and initiate programmes that promote renewable energy options such as biofuels.

14. Here in Malaysia, we have taken a number of actions. We established a Ministry of Energy, Green Technology and Water that’s dedicated to addressing environmental issues. At the policy level, we have formulated a National Biotechnology Policy and a National Biofuel Policy to leverage the natural strengths of Malaysia, such as our nation’s vast biodiversity, abundance of rainwater and sunshine for energy generation. At the practical level, we have introduced the Small Renewable Energy Programme. An example is the Suria 1000 Programme which offers incentives for corporations to invest in green energy.

15. As clean energy is being pursued by governments and security of energy supply is becoming a priority for countries with few, if any, hydrocarbon resources, there is tremendous potential for the development of alternative energy sources. In this regard, I would like to propose that a “Clean Energy Development Bank” be established to accelerate the development of clean energy-related industries for the benefit of developing OIC countries. Malaysia is prepared to spearhead this initiative which I hope can be discussed during the Forum’s Special Leadership Dialogue Session on Climate Change.

16. Much has also been said about Islamic finance and banking as key to our futures. Muslim countries must continue to play a leading role in transforming this sector from being considered niche banking into something that’s widely accepted as central to long-term economic stability around the world. 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 “ethical banking” as a norm in modern day banking.

17. The time is right for this. We see positive trends prevailing for the development of Islamic 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. Here in Malaysia, we have spent 30 years developing Islamic finance. I am pleased to say we have successfully developed it in parallel with our conventional banking system. It’s clear that Islamic finance can co-exist and thrive alongside conventional banking system, and it should be promoted further.

18. Economic empowerment of the Ummah is critical to achieving our goal of stability through prosperity. Access to funding is needed for economic growth. Fortunately, Islamic financing can serve all – from small entrepreneurs through micro-financing to large corporations through sophisticated instruments from Islamic capital markets. Malaysia is prepared to share our experiences and expertise to spur development of Islamic finance on a worldwide basis.

19. Clearly, Muslim countries are well endowed with resources needed for economic growth – in areas of agriculture, energy, mining arable land, and other natural resources. We need to capitalize on these strengths in order to spur growth of new emerging economies. However, nothing can be achieved without adequate capital. Effective capital deployment is required to spur growth and productivity and to support the development of the Muslim Ummah. In this regard, I urge the private sector to take the initiative to mobilize capital through Islamic Equity initiatives from regional and global sources and to deploy this capital productively to ensure an appropriate return for investors.

20. We also need to strengthen our efforts in human resource development, especially in education and training which are far from satisfactory. No Muslim country can aspire to be a leader and to transform the country without investing heavily in education. This requires talking less and doing more to provide educational opportunities for all our children. This can no longer be seen as a privilege for a few segments of the population.

21. One important dimension of education that should be prioritised is the application of technology. This would enable the construction of a global curriculum that can transform national classrooms into an international education system, based on universal values. These values can be manifested in all learning situations by adopting what I call a “values across the curriculum” approach. It would be based on one set of values, shared by all countries, which will support mutual growth and development.

22. Since education funding is crucial, Specialised Development Funds could be established to develop an educational infrastructure and support teacher training and academic research. Properly structured, managed and utilised, such funds can help reduce the educational gap that exists between the Muslim and non-Muslim world.

23. There is no doubt that the issues we face are daunting, and some will see our goals as unattainable. But we cannot afford to be bystanders. We must begin even with small steps. If we get it right, these small steps will snowball into an economic revolution that can ultimately achieve a remarkable change in our countries and throughout the Muslim world.

24. I believe that we should look to the future with confidence and there is a strong basis for that. As nations we have weathered economic storms and emerged determined to build for the long-term. As a Muslim world we have remarkable competitive advantages and opportunities. And we have shown a commitment to proactively address the challenges confronting us and working together to create a stronger future. Indeed, our collective efforts must be devoted to finding more innovative approaches and more ideas to foster the positive change we want to see in the Muslim world.

25. In line with the concept – “Gearing for Economic Resurgence” which is the theme of this forum – I propose that we plan an entire ecosystem. We need to think and think anew and move beyond our conventional frameworks and conventional wisdom. This may require a new economic model for the region, if necessary, that is designed to meet the specific needs of the Muslim world. Such a model, underpinned by a theoretical framework, should not only be inclusive and progressive but also practical in respect of policy formulation and implementation. Most importantly, it will need broad support, taking into account the requirements of the OIC countries.

Ladies and Gentlemen,

26. We are well aware, the OIC currently has its own Islamic Summit. This conference, under its present form and structure, should continue. But, I believe the time has come for us to consider holding an OIC Economic Summit, in collaboration with the Islamic Summit Conference. In this way, we can focus on pressing economic issues and ways to expedite decisions and actions on behalf of the Muslim world. A dedicated, issue-oriented summit of this type would breathe new life and meaning into the OIC and overcome any cynicism towards it.

27. I believe that all these issues and opportunities can be effectively addressed by the 6th WIEF. It can serve as a platform for ideas for the consideration by OIC countries. I look forward to receiving the recommendations that come from these sessions.

28. In closing, I wish the Forum every success. And I want to reaffirm the whole hearted support of the Malaysian government and of course material support to the WIEF Foundation in its noble endeavours.

His Majesty, Excellencies, Ladies and Gentlemen,

29. With these words and with Bismillahirrahmanirrahim, it gives me great pleasure to officially declare open the 6th WIEF.

Thank you.

Wabillahi Taufiq Walhidayah Wassalamualaikum Warahmatullahi Wabarakatuh.

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