INVESTORS URGED TO USE MALAYSIA AS BASE FOR ISLAMIC FINANCE

Manama (Bahrain), Oct 16 (Bernama) -- In line with efforts to promote
Malaysia as an Islamic financial centre, investors are being encouraged to use
the country as a gateway for investment and base for financial activities.

"Let's jointly promote Islamic finance in the international market and the
mutual acceptance of each others financial products while marketing them
together," the Crown Prince of northern state of Perak, Raja Dr Nazrin Shah
Sultan Azlan Shah, urged in an interview here.

He pointed out that Malaysia is generally a business friendly place and
there are lots of attractive policies in place for foreign investors, wanting to
invest in the country.

Raja Dr Nazrin Shah, who is also the financial ambassador of the Malaysia
International Islamic Financial Centre (MIFC), led a roadshow delegation
comprising regulators and industry players to Qatar and Bahrain from Oct 10-15.

Tracing the development of Islamic finance in Malaysia, he said in 1983, the
first Islamic bank was established in the country and in the 90s, banks were
invited to open windows within their system to start trading in Islamic
products.

He said the MIFC intiative was established in 2006 to establish Malaysia as
the centre for Islamic finance and to integrate the country within the Islamic
financial community.

"We (Malaysia) now have an Islamic capital market and are the largest
producer of Sukuk (Islamic bonds).

"I think 60 percent of Sukuk originates from Malaysia. We have Islamic
insurance, re-insurance and asset management, developed over the last few
years," he explained.

According to Raja Dr Nazrin Shah, the underlying principle of Islamic
finance is basically to prohibit accessive risk taking and speculative
activities while it is also sound finance.

He said non-Muslims are also beginning to use Islamic products, especially
in Malaysia.

"I think we have progressed much and Malaysia is the centre for Islamic
finance," he said, when asked how far had Malaysia come as an international
Islamic financial base.

He also said there was a need for greater collaboration and dialogue to
promote Islamic finance in international markets.

"These are the basic pillars that have to be considered on a continuous
basis in order to promote Islamic finance, he added.

"In 1997, Malaysia went through a financial crisis and that was a wake
up for us. Since 1997, we have strengthened our financial system while putting
in place stronger regulatory and supervisory considerations, for greater
corporate governance and best practices.

"Because of these reforms, it has put us in good stead in withstanding the
present economic crisis," he said.

He said Malaysia like many other countries had been affected by the economic
crisis.

"Basically,there has been a contraction in demand for our exports.But the
financial system remains strong as our banks are very well capitalised," he
highlighted.

Raja Dr Nazrin Shah said Malaysia is a very open economy and its growth has
been export driven.

In the present situation, he said, demand in the developed economies and
Europe is low and it might take some time for them recover from the crisis.

He stated that countries like Malaysia, which traditionally depend on
exports, now have to look to alternative markets as in South East Asia and boost
domestic demand.
-- BERNAMA