IslamicFinance.de

In this comic the University of Queensland’s Mamiza Haq explains the foundations of Islamic fincance and the Dana Gas sukuk case.

The Malaysian government has announced plans to transform the country’s capital Kuala Lumpur into a major financial centre in a bid to raise its profile and spark greater international trade and investment. The proposed new financial district, covering 70 acres and featuring 11 new buildings with 25 or more floors, is known as the Tun Razak Exchange (TRX). In order to achieve the goal of becoming a financial superpower, TRX must turn to a more niche approach and build on the country’s established strength in the rapidly growing Islamic financial marketplace. Malaysia must leverage its status as an established Islamic finance hub. And it must address the challenges associated with the supply of high quality human capital.

Due to rapid growth and expansion of the Islamic financing sector, Germany is about to follow the example of some other European countries and launch an Islamic bank. Similar plans are discussed in Ireland as well. One of the reasons for the expansion is the growing demand for a more ethical financial system. However, the question remains whether Islamic finance can offer suitable solutions which reach beyond the Muslim world. Even though it is based on Muslim religious principles, it has some advantages like the lack of speculative activities and a possibility to create a more equitable financial system.