ISLAMIC FINANCE SUMMIT
Trials and triumphs March 14th 2019 Kuala Lumpur
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ISLAMIC FINANCE SUMMIT
Trials and triumphs
Islamic finance, meaning financial and investment services that are compliant with sharia law, has enjoyed exponential growth in the last decade. The World Bank estimates that there is a total of $2 trillion in sharia-compliant assets today, mostly sitting with Islamic banks. There still is room for further expansion both in relatively unbanked Muslim countries in the developing world, such as Indonesia, and in the West. Major recent issuances of sukuk, or Islamic bonds, have caused a spike in capital. Experts and industry commentators speculate that the sector could grow by another $1 trillion by the end of 2018. Yet global growth in the industry is under threat. Islamic banks have been slow to adopt emerging technologies and could miss the spread of financial inclusion in the Islamic world, which has a large unbanked population. Governments have been too cautious in their efforts to create regulatory environments that nurture start-ups and are attractive to foreign investors. Fractured scholarly definitions of what is and is not sharia-compliant dampen the industry’s cross-border potential. Continuous geopolitical strife in the Middle East threatens to undermine foreign investment, and Islamic finance desperately needs global standards. The Economist Events’ Islamic Finance Summit will convene regulators, leaders from regional and international financial institutions, Islamic-finance scholars, investors and entrepreneurs to assess the trajectory of Islamic finance, determine a framework for global standards, and discuss how the industry can be brought into the mainstream. Moderators: SIMON COX, emerging markets editor, The Economist islamicfinance.economist.com @EconomistEvents #EconIF
PROGRAMME AGENDA 8.00 am
Registration opens
9.00 am
Chair’s opening remarks
9.15 am
Opening keynote interview ELLIOTT HARRIS, assistant secretary-general and chief economist, United Nations
9.30 am
Panel: Geopolitics in the Middle East The geopolitical situation in the Middle East is bleak. In May 2018, President Donald Trump decided to withdraw the United States from the Joint Comprehensive Plan of Action, a deal designed to curb Iran’s nuclear ambitions, and reimposed sanctions on the country. Wars still rage in Syria and Yemen, pulling in regional and global powers, and the Arab states’ continuing boycott of Qatar threatens to push it further into Iran’s sphere of influence. What is the geopolitical outlook for the Middle East, and how will it affect the growth of Islamic finance? MOHAMED DAMAK, senior director and global head of Islamic Finance, financial services research, S&P Global Ratings
10.00 am
Keynote interview: Islamic finance in the Middle East ABDULLA MOHAMMED AL AWAR, chief executive, Dubai Islamic Economy Development Centre
10.30 am
Networking coffee break
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PROGRAMME AGENDA 11.00 am
Panel: Regulation and standardisation Different definitions of what is sharia-compliant make it difficult to regulate Islamic financial instruments. Rulings in the Middle East differ from those in South-East Asia. Flimsy regulations have allowed the private sector to take advantage-Dana Gas, headquartered in the United Arab Emirates, recently said it would not redeem a sukuk on its maturity, worrying investors in the Islamic bond market. For the industry to grow, central banks and international regulatory bodies, such as the International Islamic Liquidity Management Corporation, must put in place frameworks for cross-border co-operation. But with such fractured ideas about the fundamentals of Islamic finance, how can this be achieved? OMAR MUSTAFA ANSARI, acting secretary-general, Accounting and Auditing Organization for Islamic Financial Institutions AISHATH MUNEEZA, associate professor, INCEIF ENGKU RABIAH ADAWIAH ENGKU ALI, professor of law, International Islamic University Malaysia TALIYA MINULLINA, chief executive, Tatarstan Investment Development Agency
11.45 pm
Spotlight on Indonesia: Frontier finance The assets of Indonesia’s Islamic banks are small but growing rapidly. According to Indonesia’s Financial Services Authority (OJK), assets rose by 19% last year. The government is supportive; in 2017, PresidentJoko Widodo set up a committee to promote Islamic finance and establish the country as a hub for the industry. But opaque capital regulations are stemming growth, and Islamic finance only represents 5.8% of the sector as a whole. How can the industry achieve the scale needed for substantial growth? How can technology help to bring the country’s unbanked into the formal Islamic economy? To what extent will Islamic finance benefit from the government’s infrastructure splurges? And how can Islamic banks compete with Asia’s tech firms and conventional banks as they vie to serve Indonesia’s emerging middle class?
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PROGRAMME AGENDA 12.05 pm
Networking lunch break
1.10pm
Panel: Islamic finance disrupted Technological disruption could play a major role in the development of Islamic finance. According to the Global Findex Database, a market research firm, 71% of Muslims don’t have a bank account. The Global Islamic Economy Report in 2017 estimates that the world’s young Muslim population is expected to reach 2.2 billion by 2030. Governments are catching on to the challenge and the opportunity: Dubai’s FinTech Hive is investing in start-ups that deal in takaful, or Islamic insurance, and Malaysia is spurring investment in fintech. But Islamic financial institutions are falling behind. Their traditional conservatism is at times at odds with technological innovation. If they are to compete with conventional financial institutions, governments must create regulatory frameworks that encourage start-ups. Entrepreneurs must find the secrets to scale. And lessons must be learned from the successes of Chinese and Indian fintech behemoths. STELLA COX, managing director, DDCAP Group THASLIMA BEGUM, founder, TEEK TAKA VIOLA LLEWELLYN, co-founder and president, Ovamba
1.55 pm
Innovation competition Three fintech entrepreneurs will pitch their business models to a panel of judges, describing their growth potential, feasibility and social impact. The judges will then decide which one would be worthy of investment. Each presentation will end with an audience-led questionand-answer session. May the most nimble start-up win.
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PROGRAMME AGENDA 2.35 pm
Spotlight on India: Politics preventing progress? India has all the attributes needed to become a global Islamic financial hub. There are over 180m Muslims in the country, and many of them don’t have bank accounts. It has a young and increasingly tech-savvy population and a proven track record of leapfrogging countries with more sophisticated financial systems. Yet the ruling Bharatiya Janata Party has been accused of stoking Hindu nationalist sentiments, and last year the Reserve Bank of India (RBI) decided against introducing Islamic finance in the country. This session will examine the politics behind the RBl’s decision and assess the future of Islamic finance in the world’s second-most-populous country.
2.50 pm
Networking coffee break
3.20 pm
Oxford debate: This house believes that Islamic finance is no longer Islamic In this session, two scholars, one conservative and one liberal, will debate what it means to be sharia-compliant, and whether Islamic banks and financial institutions around the world are prioritising profits over compliance to Islamic law.
4.10 pm
Spotlight on Malaysia: The world’s Islamic finance capital Malaysia has some of the world’s most sophisticated and integrated Islamic financial products and services. It accounted for more than 50% of global issuances of sukuk in 2016. It launched the first green sukuk in 2017. And the country has the biggest socially responsible investment funds in Asia. How can Malaysian financial institutions use their robust domestic footing to expand internationally? And how can they use their influence to create a global set of standards? DAUD VICARY ABDULLAH, managing director, DVA Consulting
4.40 pm
Closing keynote interview: Islamic finance, going global
4.55 pm
Closing remarks
5.00 pm
Close of conference
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CONFIRMED SPEAKERS OMAR MUSTAFA ANSARI Acting secretary-general Accounting and Auditing Organization for Islamic Financial Institutions
ABDULLA MOHAMMED AL AWAR Chief executive Dubai Islamic Economy Development Centre
DAUD VICARY ABDULLAH Managing director DVA Consulting
THASLIMA BEGUM Founder and chief executive Teek Taka
STELLA COX Managing director DDCAP Group
MOHAMED DAMAK Senior director and global head of Islamic Finance, financial services research S&P Global Ratings
ENGKU RABIAH ADAWIAH ENGKU ALI Professor of law International Islamic University Malaysia
ELLIOTT HARRIS Assistant secretarygeneral for economic development and chief economist United Nations
VIOLA LLEWELLYN Co-founder and president Ovamba
TALIYA MINULLINA Chief executive Tatarstan Investment Development Agency
AISHATH MUNEEZA Associate professor INCEIF
SIMON COX Emerging markets editor The Economist
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