Economic Environment Will Improve

Malaysia believes that with further collaboration with the Gulf states it can share knowledge and expertise in Islamic finance to help improve the current economic environment.

As such, Prime Minister Datuk Seri Najib Tun Razak has called for closer cooperation between the Gulf states and Malaysia to promote the Islamic financial system for a more holistic approach to long-term economic development.

"The states, with their financial resources, and Malaysia, with the knowledge and expertise in Islamic finance, provide a natural match and synergy for closer cooperation.

"We must use the opportunities available to us, even in these difficult times, to strengthen our economies and emerge stronger when the global economic environment improves.

"I am very confident that it will surely improve, just as the sun will rise again tomorrow," he said in his article on "Playing Our Part in Building a Safer, Prosperous World" published by the Egyptian Gazette newspaper Wednesday.

The prime minister is here to attend the 15th Non-Aligned Movement (NAM) summit which was officially opened by Egyptian President Hosni Mubarak Wednesday.

Najib, who is also finance minister, said that in the wake of the current crisis and the failure of the conventional banking system, there was increased interest in Islamic finance.

He said Malaysia, a leader in this area with some 60 per cent of the world's issuance of 'sukuk' (Islamic bonds) originating from Malaysia last year, was prepared to share its expertise for the greater and common good of the Muslim world.

He said the Securities Commission (SC) and the Dubai Financial Services Authority (DFSA) had agreed to allow cross-border distribution and marketing of Islamic funds between Malaysia and the Dubai International Financial Centre (DIFC).

Najib said it could be strengthened with the establishment of an economic council between the Gulf states and Malaysia.

He said it would offer far-reaching benefits to members as well as other countries in the two regions -- Southeast Asia and the Gulf region -- and between Asean and the Gulf Cooperation Council.

"One of the most important lessons to be learned from the ongoing economic crisis is that we must never be boxed in by orthodoxy in economic matters, but focus more on what works, what is needed and what will best serve the long-term needs of our people," he said.

He said that in Malaysia, there have been criticisms from those who wanted to defend the status quo or ignore the different times we lived in.

"But without these policies, Malaysia would be left behind, ill-equipped to compete in the high-value economic sectors of the future that will propel Malaysia into the higher income group," he said.

On NAM, he said that though the organisation was set up under a very different political and economic environment, the challenges it faced today were no less important.

"The Cold War may be over but we are confronted with the most severe economic crisis in decades, new international security threats that strain relationships and questions about shifts in economic power across regions and between peoples," he said.