World Islamic Economic Forum WIEF Eyes New Heights In S. Korea

PYEONGCHANG (South Korea): The 2014 World Islamic Economic Forum (WIEF) Foundation Roundtable is set to charter new heights with the emphasis on strengthening Islamic economic sectors of interest between Muslim countries and Northeast Asia.

Attended by about 300 business leaders from 19 countries, the participants at the roundtable zeroed in on the need for tax and government policy reforms to pave the way for Islamic finance to gain a foothold in South Korea.

World Islamic Economic Forum (WIEF) Foundation chairman Tun Musa Hitam said it was impossible to ignore the tremendous growth of Islamic finance and the burgeoning halal industry, which are valued at US$1.6 trillion (RM5.6 trillion) and US$2.3 trillion, respectively.

“Although the Republic of Korea has only a small percentage of Muslims, its vision is not only to cater to Korean Muslims but also the ever-increasing number of Muslim tourists and businesses that enter the country every year, as well as the huge trade potential and investments in related products.

“Today, the Republic of Korea stands to gain tremendously from the huge economies of scale and traction achieved in Islamic
finance and the halal industry globally. “I am sure that the Republic of Korea, due to its solid financial infrastructure and strong agrifood industry, is poised to be a strong player in Islamic finance and the halal industry,” Musa added.

CIMB Islamic Bank chief executive officer Badlishah Abdul Ghani said for Islamic finance to truly make its presence felt in South Korea, several issues such as tax reforms and governmental regulatory changes needed to be ironed out. “Some crucial questions need to be asked: What is Islamic finance? Why the need for Islamic finance since the conventional financial systems are already in place? How to implement Islamic finance and incorporate it into the existing financial system?

“The need for Islamic banking is simply because there is demand for Islamic finance. “From the government’s perspective, it is our role to provide the choice to our consumers and give financial solutions for the 140,000 Muslims in South Korea.” He added that it was necessary for the government or regulators to introduce changes to the legislation or regulation that can facilitate Islamic financial transactions.

“Islamic finance is the intermediation between the haves and the have-nots in a manner that is consistent with the syariah that fulfil all consumer needs for financial solutions in capital markets, banking sector and other non-banking activities such as takaful, wealth management, will writing and others.

“The mechanics of Islamic finance are relatively similar to conventional banking. “The difference lies in how financial transactions are undertaken,” he said in the first session of the Roundtable, here, yesterday. On the economic relationship between investors and issuers of both conventional and Islamic banking, Badlishah said it was exactly the same irrespective of the contract used, where there is indebtedness that is owed to the investor by the issuer.

“Both the conventional and Islamic finance co-exist in the same market space, fulfilling the needs of the consumers and investors in a slightly different way,” he added.

Originally published on www.nst.com.my