Kuala Lumpur, 28 Feb 2017 – INCEIF is proud to have four of its faculty members contributing to the inaugural “Islamic Finance: A Catalyst for Shared Prosperity?” report, a project jointly undertaken by the Islamic Development Bank (IDB) and World Bank. This initiative is in line with INCEIF’s aim to be the knowledge leader in Islamic Finance (IF) and the reference point for industry players and policy makers. It is ideal for INCEIF to be working with a partner for this initiative to bring the spotlight on Islamic finance.
The main objective of the report is to exhibit how Islamic finance can promote inclusive growth and reduce income inequality. The report, prepared with a focus on the widening disparity of global wealth and how IF can help in enhancing shared prosperity, provides a commentary on the state of IF and desired policy interventions to get the full benefit to achieve sustainable development and shared prosperity.
The report is timely as world leaders have adopted the 2030 Agenda for Sustainable Development, which includes a set of Sustainable Development Goals (SDGs) to end poverty, fight inequality and injustice, and tackle climate change by 2030. IDB, in its 2016-25 Strategic Plan, gives priority to inclusive and sustainable socioeconomic development among member countries within its role in advancing IF globally. Besides imposing social and environmental costs, severe inequality adversely affects economic growth and wealth creation. The question that needs to be addressed is how to minimise the disparity in wealth and enhance shared prosperity. Given its potential role in economic development, IF can contribute toward achieving these objectives.
The report also provides a comprehensive overview of the existing status of various IF sectors and identifies major challenges hindering the growth of Islamic finance. It also identifies policy interventions and tools for policymakers to leverage the principles of Islamic finance in an effort to eradicate extreme poverty and work toward a more equitable distribution of wealth. The main message of the report is that IF, built on a foundation of social and economic justice, can contribute to shared prosperity through the principles of inclusive participation and risk sharing.
INCEIF First Holder of Islamic Finance Chair Prof Abas Mirakhor was part of the report’s Advisory Committee. Prof Obiyathulla Ismath Bacha, who is a Subject Matter Expert on capital markets, contributed for topics regarding Islamic Capital Market; Prof Rodney Wilson on Islamic banking and economic topics; and Dean of School of Professional Studies and Subject Matter Expert on takaful, Mr Ezamshah Ismail for topics on takaful.
The report can be downloaded here http://www.worldbank.org/en/news/feature/2017/02/21/new-report-outlines-actions-to-leverage-islamic-finance-for-development