Mukhriz: Develop Islamic finances

SPEECH BY

YB DATO’ MUKHRIZ MAHATHIR

DEPUTY MINISTER OF INTERNATIONAL TRADE AND INDUSTRY

 

 

MALAYSIA – ARAB BUSINESS FORUM

 

 

30 NOVEMBER 2009

 

JW MARRIOTT HOTEL,

KUALA LUMPUR 

 

Assalamualaikum W.B.T, Good Morning and Salam 1Malaysia.

 

1.           It is indeed a great pleasure to be here today at the Malaysia-Arab Business Forum. I am delighted to be addressing this gathering of eminent business people and political leaders from both Malaysia and the GCC member countries. This is a positive step in our continuing efforts to strengthen our longstanding bilateral and economic relations.

 2.           I would like to extend a warm welcome in particular to the GCC delegation which I am made to understand comprises diverse representatives – all of whom are keen to further explore investment and trade opportunities in this region.

 3.           The past 16 months have been very challenging for the global economy. We are now seeing signs of recovery and all bets seem to be on Asia leading the recovery. But even as we get data coming out of China, Korea, Japan, Taiwan and India that point in this direction we are confronted with news of the Dubai debt crisis. The world has crossed its fingers yet again and is holding its breadth, so to speak, hoping that this will not stymie global economic recovery.

  4.           Are the developments that we are experiencing part of the boom and busts that economists talk about? Nobel Laureate Professor Joseph Stiglitz asked “Is boom and bust a permanent feature of the capitalist order? Do global markets need global regulation – and are today’s supranational institutions the right ones to provide it? Is the dream of a Third Way between today’s global capitalism and yesterday’s discredited socialism still alive?”

 5.           In my opinion, a Third Way is not a dream but in fact an option that is available but has not given its due recognition.

 6.           I am talking about the promise of Islamic banking, the potential of the halal industry and the viability of the Gold Dinar. In essence I am referring to the noble principles of the Islamic faith, the practicality of its commandments and the strength in unity of the Ummah.

 7.           Allow me to elaborate. Firstly, the sub-prime crisis in the United States which imploded and was transformed into a full blown international economic crisis has drawn attention to Islamic banking as a viable and attractive alternative to the conventional system. Indeed the official newspaper of the Vatican – ‘Osservatore Romano’ published an article affirming the ethical principles on which Islamic finance is based on and that such noble principles reflect the true spirit which should mark every financial service. In addition, we see several countries, including France, UK and Singapore, vying to be the “capital of Islamic finance”. Thus, in view of these developments – Malaysia and the GCC member countries must seriously take up the challenge to develop and lead the world in Islamic banking and finance.

 8.           For your information, the Malaysian Government has introduced various measures and tax incentives to create a modern and efficient international Islamic financial centre. These measures include the following:  

  • Stamp duty exemption of 20 per cent on Islamic financing instruments;  
  • Tax exemption on banking profits derived from overseas operations; 
  • Tax exemption of insurance and takaful companies derived from overseas operations;  
  • Permitting foreign financial institutions to conduct Islamic banking activities in international currencies; and 
  • Permitting greater flexibility to Labuan Offshore Financial Centre entities that offer Islamic financial services to operate anywhere in Malaysia.

 9.           As a result of these and other measures, Malaysia is gearing up towards being a premier international Islamic financial centre for the origination, distribution and trading of Islamic capital market products, including treasury instruments such as sukuk. In this context, I would like to invite interested parties within the GCC that are seeking Islamic financing facilities to take advantage of the wide range of syariah-compliant services available in Malaysia. I would also like to invite our brothers and sisters in the GCC to work with Malaysia to develop the Islamic banking industry to our mutual benefit. Without unity of purpose we will perhaps short change ourselves and undermine the Ummah. Let us work to jointly develop standardised Islamic financial products, structures and systems. 

 10.       Moving on to my next point about the burgeoning halal industry. Allow me to talk about some of the Malaysian Government’s initiatives as announced by our Honourable Prime Minister at the Malaysia International Halal Showcase (MIHAS) in May this year. He emphasized the Malaysian Government’s commitment to developing Malaysia as the global halal hub. He urged Malaysian companies to invest in the production and export of halal products and services.

 11.       We are also encouraging our private sector to establish strategic alliances with domestic and international players and leverage on each others’ strengths in the supply of raw materials, ingredients, technology and branding in this regard.

 12.       To ensure a more coordinated development of the Malaysian halal sector, the Government has now placed the Halal Development Corporation (HDC) under the Ministry of International Trade and Industry.

 13.       The Government also provides various incentives to promote this industry, such as:

 

  • Double deduction for expenses to obtain halal certification and quality systems and standards certification; 
  • Matching grants for development and promotion of halal products;
    import duty exemption on raw materials/ components;
     
  • Import duty / sales tax exemption on machinery and equipment;
    reinvestment incentives in food processing activities; and
     
  • Incentives for companies providing cold chain facilities and services for food products.

 14.       This sector offers much potential for Malaysia and the GCC business community to collaborate and leverage on our respective strengths to expand our reach not just in our respective markets but beyond.

 15.       Last but not least, the proposition for the Gold Dinar. My friends, this idea is not new. I believe that in light of the decline of the U.S. Dollar as the world’s sole reserve currency, gold prices on the rise and the entire dismal global economic predicament – the viability of the Gold Dinar speaks for itself. Perhaps this is an idea whose time has come.

 16.       Malaysia and the GCC member countries have much to gain from expanded trade and investment. The potential exists not just in our markets but in the wider reach that each of us has through our trade and economic linkages with the rest of the world, namely Malaysia within ASEAN and the various Free Trade Agreements that we have concluded and likewise the GCC with your trading partners. It is for this reason that the Malaysian Government is interested in engaging more deeply with members of the GCC in a Free Trade Agreement. There have been some exchanges in this regard and we look forward to beginning negotiations in the near future.

 17.       At present Malaysia’s economic linkages with the GCC and members of the OIC is mainly with Saudi Arabia and the UAE. From 2008 to September 2009, investments from these two countries totalled RM92.9 billion. And Malaysian companies have a fairly strong presence in these two countries as well. We believe that there is so much potential that we have yet to explore with the other member countries.

 18.       One area of potential is in the services sector. For your information, the Malaysian Government has through its agency, MATRADE, organised the Malaysia Service Exhibition 2009, MSE 2010, earlier this year at the Dubai International Convention & Exhibition Centre, UAE. Given the success and overwhelming response to that exhibition, we will be organising MSE 2010 from the 13th – 15th of April 2010, at the same venue.  Please do mark down these dates in your diary and join us then. You could also get in touch with my officers for further information.

 19.       I must thank you for your attention and the opportunity given to me to share my thoughts with you this morning. I also want to thank you all for your presence and support to this Forum. I hope you will find it a useful platform to network and do business.

 20.       On that note, I am pleased to declare open the Malaysia-Arab Business Forum and I wish you success in your deliberations.

 

Wassalamualaikum W.B.T and Thank you.

Published in: on November 30, 2009 at 12:25  Comments (23)  

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23 CommentsLeave a comment

  1. “Islamic Banking” should NOT exist in the substratum of fiat paper money and riba-based World bank, IMF and foreign exchange monetary system.

    These are works and ideas of modern professional muslim bankers, financiers, economists etc who do NOT know their basic Fiqh and fundamental Islamic Worldview.

    so sad.

    • May be so. Do you have a perfect Islamic Banking model that we can share? Can muslim banking systems exist in isolation, stand alone?

      If not it is just a lot of emotional hot air.

      mohamed

      • Well said, Sir. It is indeed pretty useless pointing at something without any intelligence at all. Come on mate, share some..!!!!!

      • Just out of pure curiosity, we don’t really hear islamic scholar of the fiqh doing any of these islamic finance thing, do we? I wonder why? Being not of any islamic studies background academically, do these things, the islamic jurisprudence and finance/business have a seperate way to it? I would appreciate it if arguments on this be presented with knowledge and somewhat academical.

      • I too am exasperated at people who give a few lines of opinions without justifying them. Sounding high and mighty but without any facts or valid arguments.

        Come on, Mr Fiqh and fundamental Islamic Worldview expert, Monopolymath. Put facts and arguments where your mouth is. Let’s hear them.

  2. Big Dog,

    It is so interesting that a “trade” minister talks about islamic banking and gold dinar becuase he does nothave his trade fundamentals right and he wants to talk about islamic banking system. Most of the current crop minister dont even know how the current financial system works much less islamic financial sytem. Graduates that come out of university with degree in banking don’t even know the difference between simple interest and monthly interest so DO NOT even dream that you can get people together to do anything about the gold dinar. Especially the political masters….Not in your best interest to allow the mass control the money especially in the physical form isn’t it?

    It may sound for the uniniated I am talking in riddles. Hey bankers out there…. you know as well as I do that you create money out of thin air through book entries……BTW ex-banker here….

    Keturunan Jebat

    • “Graduates … with degree in banking don’t even know the difference between simple interest and monthly interest…”?

      Would you come out with the facts – give details, names, where graduated from, where employed etc – so that we could take it up with the Universities and/or Ministry concerned for having graduated them? At least 1-2 of those fellows.

      Now, now, don’t say you don’t want to compromise yourself – you don’t have to reveal your name even here.

      The University(ies) and the Ministry are nonsense if what you say is true. If not, you are saying is nonsense.

      As an “ex-banker” you need to be responsible in your statements and should back up what you say, irrespective of your keturunan.

      • BANYAK GRADUAN YG KELAUR TERUS MENGANGGUR. NAK CAKAP OMPUTEH PUN TAK PANDAI. BUKAN MACAM CHAIRMAN KAGA, AKU IS SPEAKING VERY GOODS.
        HE HE HE HE
        DULU TUN WENGER DAH KERJAKAN PENCACAI DOKTORS MAHADEYS DENGAN MENGEMUKAKAN PELBAGAI HUJAH DAN DATA . TAK PAYAH NAK SELALU MINTAK DATAS DATAS – BUANG MASA JE.

  3. Gold Dinar is nothing but a pipe dream. Arab nations are not even united.

  4. some of your commenters act macam pandai.
    making comment like -this is what a 5 year old explained to his mother.

    so is yb mukrij . would your pandai commenter
    do the honour of telling the good yb-

    this is what a 5 yr old would tell his father

    i am waiting man , se if you got the bollacks

    • sdr zuhri hj zubir

      you wrote

      “so is yb mukrij . would your pandai commenter
      do the honour of telling the good yb-”

      I think I have to oblige. It is not that I pandai

      If you think YB Mukriz is speaking like “this is what a 5 yr old would tell his father” as per my comment about Nik Aziz excuses for appointing his own son-in-law, I can’t.

      It is because YB Mukriz does not behave like that. He is a resposible person.He has intergrity.

      mohamed

      • HE HE HE
        KELAKAR SUNGGUH
        KALU GITU KENAPE ANAK MADEYS MENAJA BLOG PAPRUKARI YANG KUAT FITNAH CARUT DAN MAKI HAMUN ORANG.

    • Apa hang dok teriak nih zuhri, tak paham aku satu pun. Apa ilmu disebalik apa yang hang kasi komen nih? YB Mukrij nih sapa? bollacks nih pa dia?

      Hang pi la belajar mengeja dulu, lepaih tu baru komen pasai orang lain tak bijak mcm hang la.

      Memang tak dinafikan orang komen dalam blog nih tak semuanya cerdik, tapi mana yang ada ilmu tu, memang eloklah kongsi. Hang kata lagak pandai kat orang, hang nih? Apa pandainya, komen yang hang dok tulis nih? Ke hang nih tulis pasal diri hang sendiri?

  5. Sdr dollah

    It is raining and miserable now. You made me broke into smile.

    I wish i am as good as you.

    Thanks my friends

    mohamed

    • Hahaha… Tuan Mohamed, saya nih ingin yang baik, tu saya belajar kalau tak tahu, mohon diajar dan tiada masalah berbincang demi segala yang membawa kebaikan. Nih orang2 yang tau nak komen ja, tak tahu apa nak buat pun, semua dok salahkan umno la, bn la, kerajaan la… tang kebodohan dan kegagalan diri sendiri tak mau lihat. Seronok la kata orang lain salah. Kalau salah kita kata salah, walau kecil macamana pun. Tapi menuduh biaq dengan bukti, dengan ilmu dan kebijaksanaan. Komen macam orang melepas batuk di tangga, susah la, tak gitu Tuan? Dari mana2 pihak pun kita mau yang baik, demi masa depan bangsa, agama dan negara.

      Tuan, harapnya komen2 tak berilmu nih, janganlah melemahkan semangat kita nih. Saya nih pun dok mencelah kata2 Tuan saja, hahahaha…. takda la sebaik mana pun…

      Si kaga nih dah mula dah… mana2 saja la hang nih takda kerja lain ka… Madeys nih sapa dia? Kalau graduan semua mcm hang, padan la tak dapat kerja….

      • Sungguh na, Cek Dollah. Kaga kerusi ni tak pernah kata yang baik. Mencaci semata. 1-2 ayyat, tak ada bukti, tak ada penjelasan.

        Dia graduan belajaq bawah pokok kot. Nun diIpoh depa mesyuarat pun bawah pokok. Depa saja nak belain dari orang biasa. Semua nak kutuk. Depa saja yang betui konon.

        Depa mau porak perandakan negara. Itu cara depa nak kuasa. Depa tu anti-nasional. Ada yang maukan komunis Chin Peng yang keras kepala masih komunis, tak mau minta ma’af dengan ikhlas sikit pun. Baguih la, DS Najib tak mau jumpa dia pun. Buat apa layan dia, nanti rakyat berontak. Biaq dia mampuih di hutan Siam nun.

      • Sdr dollah

        komen yang panjang2 orang boring nak baca. Yang ini biar kita serah pada Big Dog
        dan pahlawan cyber yang lain.

        Yang saya harap sangat anak muda kita dapat menghayati dan menilai siapa Nik Aziz dan Anuar Ibrahim ni. Apa jasa mereka kepada bangsa dan negara kita, berbanding dengan jasa pemimpin2 UMNO dulu dan sekarang.

        Saya ingat jasa Nik Aziz + jasa Anuar Ibrahim baru ditahap janji nak buat, belum lagi ditunaikan. Tetapi jasa pemimpin2 UMNO kepada orang Melayu telah terasa dan terbukti.

        Tak dapat nak bertanding dalam perkara bakti dan jasa, mereka aleh pandangan kita kepada dua isu lain: satu isu corupsi dan satu lagi kafir dan syurga.

        Anuar gunakan isu korupsi seolah2 dia tu tak corrupt. Betulka? ini kita kena fikir sendiri.

        Memang ada pemimpin UMNO yang corrupt,itu lumrah manusia. (Mereka ini mesti diadil dan jika bersabit mesti dihukum.) Tapi takkanlah kerana ini UMNO nak ditumbangkan. Diumpamakan kita sendiri membuat salah besar, patut kah keluarga kita juga dimusnahkan sama? Tak patut.

        Kalau kaum Yahudi memang mereka buat macam ni, telah terbukti di bumi Palastin.

        Guru Anuar orang Yahudi kot!!

        Adakah Nik Aziz saja yang dapat menentukan status keislaman orang Islam?

        Ramai Ulama lain yang tidak senang dengan Nik Aziz. Adakah mereka itu ulama upahan semata-mata. Fikirlah.

        mohamed

  6. Mr. Wan

    with all due respect..I was writing from experience and my company take practical students every semester from both the IPTA and IPTS and the said IPTA student was from the University that was recently highlighted in the MSM for coming out with poor quality (skill sets and knowledge) and for Employers who recently went to the the workshop organized by the said University agree that we would not want to hire 80% of their graduate.

    It has also been agreed by the Employers in the said workshop that there has been too much inbreeding of the academician that they are all “syok sendiri” in coming out with the curriculum instead of studying what are the competencies (attitude, knowledge & skills) required for the industry (job market).

    Try, taking in practical students from the different and local universities and test their knowledge and see if “you” have the patience to train some of the ingrates. Dahlah tak pandai…kaki melawan. Tulis surat 3 perenggan pun berjam-jam. Bila tegur… merajuk terus tak datang…. Inilah dia bodoh sombong. Saya berani cakap sebab dah tiga tahun ambil budak praktikal….

    Kes graduan keluar dengan “skill sets” kerani bukannya baru, dah berbuih majikan komplen terutama sekali megenai graduan tempatan. Kalau tidak tak masakan budak melayu namanya graduate tapi ramai yang mengganggur. Pergilah check dengan JTK.

    Kita komen bukan sebarang komenlah brother…. Kita bukan saja setakat ex-banker kita dulu buat internal audit….. bukannya kita tak tahu mak nenek yang bernanah kat dalam industri perbankan. Kebanyakan kat luar dari industri ni tak tahu pun macam mana orang kat dalam main duit. Tu sebab kita tinggalkan industri perbankan buat benda lain….

    Pak Menteri tu yang you patut tanya… kalau dia nak sangat nak buat sistem kewangan islam mana dia framework dari segi perundangan untuk sistem kewangannya? Sekarang ni pun kalau ada masalah perundangan terutama sekali kalau nak buat “enforcement” brother ingat dia pakai sistem perundangan apa? Sekular lah… peninggalan sistem jajahan…. Kontrak tandatangan ikut “syariah” Bila ada pelanggaran kontrak pergi balik kat mahakamah syariah ke?

    Keturunan Jebat…and proud of it. (Anak Melaka)

    • HE HE HE HE
      BACALAH PENCACAI DOKTORS MADEY
      ORANG DAH BENCI DENGAN PERANGAI BODOH SOMBONG KAO
      MUAHHAHAHAHAHAH
      HIDUP PARPUKARI!

    • Sdr Keturunan Jebat

      “Employers who recently went to the the workshop organized by the said University agree that we would not want to hire 80% of their graduate.”

      You are prepared to hire 20%? This is dam good, man. Bearing in mind that a University cannot cater for you and your group alone. There other organization too !

      If you want more to meet your requirements, create your own university.

      I believe “industrial attachment” should not be like learning the nitty-gritty of that company: like drafting a letter. He is not on probation or a form of cheap labor.

      Being an undergraduate it will be more like for him to understand the functions of the various units with in the company. And the system they applied to mold them into one strong organisation.

      If he thinks he can fit in , please advice him what he needs to do further.

      Any I don’t blame the kids for turning their back on your former company, it appears you dont like it either.

      mohamed

  7. Dear Mr. Mohamed,

    Thank you for your reply….I am going to ask you this question because it is pretty obvious that you have no inkling of what is going on….

    We have very specific curriculum or skill sets whenever practical students are attached to our organization and the only reason why our company took them is basically they are “MELAYU” By the time they leave us they would come out a little bit more “celik” if nothing else.

    I have lots of Chinese and Indians graduates more than happy to come into my practicum program and the reason why I refuse to do so…. sentimental reason nak tolong ANAK MELAYU.

    Our company is a knowledge based company and very few MELAYU company is in this category and no I have no interest in taking in anymore because it is too tiring and like I said before ungrateful brats… pergilah buat practical kat company yang bagi you buat photocopy 3 bulan….atau pun data entry 3 bulan… Kita nak ajar buat cash flow, financial planning, strategic planning, financial systems Kalau tak nak boleh blah..

    Siapa yang rugi….. ANAK MELAYU…. tu sebab saya kata bodoh sombong….. Tu sebab bila keluar sebagai graduan (tak semua ya…) will become glorified typing or filing clerk at executive pay. That is why we are losing at the international field. High cost of production and doing business that does not commensurate with output.

    Most people are too narrow in their perspective and the only reason I am complaining is because why should I (if I were MNC) pay any Malaysian graduate executive that is going to give me the value of a clerk whilst I can go to another country that for the same pay will give me quality of graduate… in terms of output?

    Tu sebab saya kata…letih tak reti bahasa.. Kalau tidak takkan we are so screwed allowing our economy to be controlled by bukan Melayu? Tak pedulilah local atau bangsa asing. Itu pun I agree with the first commentator…. kalau cakap pasal fiat money bukannya orang faham…. It boil down to our attitude as the adult…. Kita kan ada pepatah Melayu : Bapa borek anak rintik…. Tak payah lah salahkan sesiapa. Kena macam saya ni cakap lebih sikit orang dah menyampah…

    Tolong bangun lah….tak usahlah mimpi di siang hari. Hakikatnya kita sebagai orang Melayu tak nak embrace realiti…tu sebab saya dah cakap pergilah periksa sendiri data dan statistik yang sedia ada dan buatlah analisa sendiri. Takkan yang itu pun nak kena suap? Macam kawan saya yang jadi pensyarah kat universiti… Nota exam pun telah dikerah untuk diberi kepada pelajar oleh pihak pengurusan supaya semuanya “lulus” Inilah dia…mentaliti kena suap.

    Enough said….

    Keturunan Jebat

    • HE HE HE
      PENCACAI TEGAR NI KENA TEMBAK LAGI
      ORANG TEGUR KERANA DIA TU BERPENGALAMAN. DAH BACA ORANG TAU DI TU PANDAI. KAO SENANG2 KEMUKAKAN LOGIK PASAR CERITE KAKI LIMA. MACAM NILAH ORANG MELAYU AKAN TETAP DIPERBODOHKAN KERANA HANYA MELAYU BODOH YANG MENYOKONG MATLAMAT KAO NIE. AKU MUNGKIN TAK DAPAT KERJA BESAQ2 DI KOLOMPO TETAPI AKU NI SIKIT2 BOLEH PAHAMLAH SIAPA TU IKHLAS DAN SIAPA SETAKAT PENCACAI TEPI JALAN.
      HMMM. KENAPA GOLONGAN TU BANYAK SOKONG ANAK DOKTOR MADEY? TANYA JE

    • Sdr Jebat

      You said “because it is pretty obvious that you have no inkling of what is going on….”

      Yes, if you are talking about your former bank and your present organization yes I have no right to comment.

      But if you talk about Practical or “industrial attachment” for students, I think I have an idea.

      Actually I know what I am talking about. My students are potential maintenance engineers. Part of their curicullam is to complete their industrial assignment succesfully. If not they would not graduate.

      They are attached to an appropriate company or organisation. Here they are suppose to see and understand the application side of what they have learn. Most students find it useful.

      There are of course a few who did not.

      Sometimes I wonder why you want to take in these students in the first place.

      It is funny really, you started with the idea to help them but it ends with you hating them.

      I believe not every body can become teachers or mentors

      Thank you

      mohamed


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