Islamic banking takes the stage
Mr Nail Aykan from the Muslim Community Cooperative Australia speaks with delegates between symposium sessions.
Senator Sherry addresses the audience.
Islamic banking and finance, while not completely immune from global financial turmoil, offers lessons the convention financial system ‘would do well to learn’. It also provides international and domestic opportunities for Australia’s finance industry. These comments came from Assistant Federal Treasurer, Senator Nick Sherry, when he opened the Islamic Banking and Finance Symposium in Melbourne in July.
The symposium – the largest ever on the subject in Australia – was organised by Associate Professor Ishaq Bhatti from the School of Economics and Finance.
Senator Sherry said ‘These are exciting times for this area of finance, with growing demand for expertise evident by La Trobe University’s launch of its Masters of Islamic Banking and Finance course.’
Addressing more than 220 international and local delegates including Saudi and Omani consulate officials and former Leader of the Liberal Party, Dr John Hewson, Senator Sherry said there were more than 340,000 Muslims in Australia.
Islamic finance, he said, presented new commercial opportunities and could contribute to social inclusion. It enabled Muslims access to products consistent with their beliefs while also widening choice for non-Muslims. The UK already had five licensed Islamic banks and the first in France was expected to be licensed soon.
‘With around 1.5 billion Muslims worldwide – a quarter of the world’s population from some of the most growth-hungry countries – the opportunities are world wide,’ the Senator added. ‘Islamic finance cannot be ignored in our efforts to promote Australia as a regional financial services hub.’
He said Australia’s geography provided an ‘important window into the Islamic finance sector. Our closest neighbour, Indonesia, had more than 207 million Muslims, with a further 40 million in other parts of South East Asia’.
However, Senator Sherry said because Islamic financial products had different structures from conventional products, their use in Australia raised regulatory and taxation questions. He invited the symposium to consider these questions and come forward with recommendations.
A keynote speaker, former Liberal leader now chairman of Global DC, Dr John Hewson said its was likely Australia would have at least one Islamic bank within five years if those regulatory hurdles could be overcome, and agreed that Australia could become a dominant Islamic financial centre in the Asia Pacific region.
He said Australia needed major infrastructure projects and wealth from the Middle East and Asia could help fund such projects if they were run in a Shari’ah compliant manner.
Cutting edge course
Vice-Chancellor, Professor Paul Johnson said it was important to provide opportunities to train professionals for this new and growing area. ‘This degree – the first of its kind in Australasia – is truly cutting edge and will train people in the expertise and technical skills demanded by global Islamic banking, Islamic insurance and Islamic capital markets,’ he said.
‘It also recognises the potential importance to Australia of two of our largest neighbours, the Islamic republics of Indonesia and Malaysia.
‘We have a huge amount of trade and interchange with those countries. Prime Minister Rudd has been forthright in saying Australia must become more focused on its Asian neighbours and more capable of engaging with them. He placed emphasis on Asian languages, but financial literacy and literacy in Shari’ah based financial structures is also very important.’
Symposium organiser and head of the new course, Dr Bhatti, said the global Islamic Banking and Finance market was estimated at USD$1 trillion and had been relatively resilient in global financial crisis. Its annual growth rate over the last ten years has been estimated at 15-25 per cent. He said KPMG reports that within the next ten years, fifty per cent of the Muslim world will be involved with Islamic banking and finance.
Dr Bhatti said the new La Trobe Masters program will appeal to international students from Asia who want Islamic financial training in English, and to local graduates keen to enter the sector in Australia.
The proceedings of the symposium and news about the La Trobe course attracted considerable Australian and overseas coverage, especially in financial media.
A non-financial refection
An interesting observation came from one participant and volunteer organiser. She is Maria Bhatti, Dr Bhatti’s daughter, a postgraduate student at the University of Melbourne and member of the Muslim Women’s Council of Victoria. Writing about the symposium from the perspective of an Australian Muslim woman, she reflected on the negative, often destructive stereotyping faced by Muslims and the need to improve intercultural attitudes.
She was critical of men ‘be it Muslim men such as Sheikh Hilali or the French President’ choosing to speak on behalf of women, ‘especially in regards to their choice of clothing,’ she said.
‘Will I ever be able to witness a world in which Islam is understood for its depth and scholarship, rather than items of clothing which only touch the surface of what Islam truly means?
‘Thankfully, Islamic finance saved the day. It finally made me proud to see the community focusing on more significant issues, such as the global financial crisis rather than revitalizing old and tiresome debates about Muslim women’s clothing.’
The conference was co-hosted by La Trobe University, National Australia Bank and the Muslim Community Co-operative of Australia.