Monday, 24 November 2008

The Second Islamic Finance and Trade Conference in London

The Second Islamic Finance and
Trade Conference in London

Dr. Mozammel Haque

The Two-days Second Islamic Finance and Trade Conference (IFTC), sponsored by International Holdings, Jadwa Bank, MAIC, UEM and Islam Channel and supported by the Organisation of the Islamic Conference, the Islamic Development Bank, the City of London, the Department of UK Trade & Investment and the World Islamic Economic Forum, was held at Park Plaza Victoria, London on 28 and 29 October 2008.

Secretary of State for Justice, Jack Straw, M.P.
Lord Chancellor and Secretary of State for Justice, Jack Straw, M.P. said, “I represent a constituency with a very large Muslim community – one third of the population of Blackburn, in fact, are followers of the Islamic faith. It is also a great pleasure to speak to such an illustrious group of people – leading figures across the worlds of finance, business and academia – and to support a conference which is furthering the important aim of making the United Kingdom “the gateway to Islamic finance and trade”.

Speaking about the relationship between Islam and Britain, Lord Chancellor said, “The relationship between Islam and Britain is not a new one; this country has been greatly enriched over the course of centuries by the Muslim history and heritage and by its learned and vibrant culture. Chaucer refers to Islamic scholars and physicians in the prologue to his Canterbury Tales as early as 1386:

“With us there was a doctor of physic;In all this world was none like him to pickFor talk of medicine and surgery; …
Well read was he in Esculapius,And Deiscorides, and in Rufus,Hippocrates, and Hali, and Galen,Serapion, Rhazes, and Avicen, …”

“But an even earlier connection – with a financial connotation – between Islam and Britain exists in the form of a gold coin displayed not far from here in the British Museum. The coin dates back to the 8th century and to the reign of King Offa of Mercia. Because of what were believed to be good trade relations between this country and the Islamic nations of the East, the coin contains both the mark of England – “There is no deity but God, without partners” – and an Arabic inscription of the shahadah – the first pillar of Islam,” mentioned the Secretary of State for Justice.

Speaking about the Islamic faith in Britain, Lord Chancellor said, “The Islamic faith is also now a vital and established part of British life. Islam is the second largest and the fastest growing religion in the UK, and British people are, more than ever before, enjoying and experiencing its religious and cultural traditions.”

Speaking about the contribution of the British Muslim community, the Secretary of State for Justice said, “One of the most important contributions of the Muslim community – indeed, to the tune of over £31 billion each year, by some estimates – is to our financial sector and economy.”

“This Government is proud to have supported the development of the Islamic finance sector ever since 2003, when we first began to work towards establishing a level tax and regulatory playing field between conventional and Islamic finance. That same year, Howard Davies – then chair of the newly created Financial Services Authority – invited an audience of Middle East bankers to discuss the establishment of an Islamic bank in this country. As a result of this and the hard work of some in the audience, the first branch of the Islamic Bank of Britain opened in 2004 in Birmingham,” mentioned Jack Straw, M.P.

Lord Chancellor also said, “We have made significant progress since then; most obviously with the fundamental reform of stamp duty to facilitate Islamic mortgages and the extension of relief on those mortgages to companies as well as individuals. But also by introducing measures to remove barriers for other Sharia-compliant products and by addressing tax and regulatory issues so as to encourage the issuance of sukuk.”

Mentioning about the effects, the Secretary of State for justice said, “Islamic finance is now one of the most innovative financial service sectors in the UK. There are now five standalone Islamic banks, and over 20 conventional banks with Sharia compliant windows. A number of sukuk have been listed on the London Stock Exchange. And London has established itself as a major global hub for Islamic finance and the key centre in the Western world.”

Speaking about the Islamic Finance and Trade in the United Kingdom, Straw, M.P. said, “We, as a Government are committed to developing still further Islamic trade and finance in the United Kingdom. This is partly – of course – because we want this country to benefit from the many opportunities Islamic trade and finance afford. We see much to gain from this – for London, in reinforcing its reputation as the leading financial centre in the world, and for the United Kingdom as a whole, in making our economy stronger and our financial services more competitive.”

Speaking about the contribution Islamic finance world has to make, Jack Straw, M.P. said, “I was talking just before with colleagues about the important contribution the Islamic finance world has to make in redeveloping our institutions – to ensure that our financial instruments are asset based. But benefit to the economy – enormously important though it is, particularly in the prevailing economic circumstances – is not the sole basis for our commitment to Islamic finance and trade. It is also because we consider that everyone in the UK ought to have access to financial services which suit their faith, regardless of their faith.”

The Secretary of State for Justice said that there are “something worth repeating: British and Muslim are complementary not contradictory. The most eloquent, living proof of this is in the people that are here this afternoon – and in those who will shortly be accepting the esteemed Islamic Finance Awards. British Muslims are where Britain and Islam intersect. Celebrating their success is the best way of showing that these two identities can and do thrive in the same place, in the same person, in the same country.”

“I have spoken about Sharia compliant products. I now want to say a word about Sharia more widely. Because the same thinking which underpins our approach to both. Of course those who live in this country will always be governed by English law and will be subject to the jurisdiction of English or Scottish courts,” the Lord Chancellor said and added, “But given the fact that speculation abounds on this point, let me say once again: There is nothing whatever in English law that prevents people abiding by Sharia principles if they wish to, provided they do not come into conflict with English law. There is no question about that. But English law will always remain supreme, and religious councils subservient to it.”

While concluding his speech, the Secretary of State for Justice, said, “It is the very diversity of Britain – and the opportunities afforded to everyone – which underpins our success, our dynamism and what makes so many individuals and families want to settle here. Our policies in relation to Islamic finance and trade, like our policies across the board, must continue to promote that diversity.”

Straw, M.P. also said, “This Government’s commitment to embracing Islamic finance and trade also derives from the fact that it is a way of forging links between countries and building relationships between peoples across the world. A way of reminding us that there is far, far more that unites than divides us.”

“I would like to finish where I began, by paying tribute to the vital contribution of Muslims to life in the United Kingdom, not least in terms of Islamic trade and finance. I am enormously admiring of your achievements, your successes, and of the way you use your talent and your time in service of the broader community,” concluded the Secretary of State for Justice.

Stephen Timms, M.P.
The Labour M.P. for East Ham, Stephen Timms, made some points from his standpoint as a Minister in the Treasury at the Muslim Council of Britain’s Second Islamic Finance and Trade Conference. “At the first conference, when he was Chancellor of the Exchequer, Gordon Brown underlined his goal that London should be the world centre for Islamic finance – and we have made good progress since then. It is a goal which is even more important in a period of turbulence in the world economy like the one we are in at the moment,” Stephen Timms mentioned.

The Labour M.P. for East Ham said, “We are already the West’s major centre for Islamic finance. 18 sukuk have been listed in London, worth some $13 billion between them. We have five dedicated Islamic banks, and over twenty conventional banks that offer Islamic financial services. There are more banks in Britain offering Islamic finance than in the whole of the rest of Western Europe put together. Around the world, Islamic finance assets have been growing at a rate of almost 20% per year since 2000 – and are now worth perhaps $700 billion worldwide.”

“Over the past five years we have made a series of reforms to establish a level playing field – in tax and regulation – between conventional and Islamic finance. There has been real progress, enabling development of genuinely competitive Sharia’ compliant mortgages, Individual Savings Accounts and Child Trust Funds,” Timms, M.P. said and added, “We have been looking at the potential of the Government offering its own, sterling-denominated, sovereign sukuk. We will be providing an update on progress at the Pre-Budget Report in a few weeks time.”

The Labour M.P. for East Ham also mentioned, “Before the end of the year, arising from our work with the Islamic Finance Experts Group, we will be publishing a document with UK Trade and Investment, setting out clearly the UK Government’s future approach to Islamic finance, and focusing attention on what needs to be done to make further progress. We have in Britain community and commitment; skills and scale; expertise and connections around the world. It’s an opportunity that we want to see realised for the benefit of Britain as a whole – strengthening London’s position as – not just one of the world’s leading financial centres – but as the world centre.”

Sir Iqbal Sacranie
Earlier, while opening the Islamic Finance and Trade Conference, Sir Iqbal Sacranie, the chair of the Advisory Group for the Islamic Finance and Trade Conference, said, “ The IFTC was launched in 2006 when the then Chancellor of the Exchequer and present Prime Minister, Gordon Brown, M.P. set a challenge to make Britain the gateway to Islamic Finance and Trade. This has remained at the heart of our aims and objectives for this initiative.”

Speaking about the purpose of the IFTC, Sir Iqbal said, “The primary purpose of this platform is to promote, enhance and expand the trading relationships between the UK and Muslim countries. We do this in order to attract inward investment for Britain whilst creating business opportunities for our trading partners in Muslim countries. The result of which, we believe, will be to generate prosperity for both. Seeking international solutions to the current financial crisis, “This requires a global framework for managing our economies and setting up international rules and regulations for finance and trade. It is only right that British Muslims be offered an opportunity to contribute to the establishment of such frameworks.”

“We believe that cross-fertilisation of ideas of people of diverse backgrounds and experiences offer us the best chance of discovering the most effective solutions to the challenges we face today. With a growth rate of 15% per annum, Islamic finance has been attracting some of the best minds and leading experts from the financial and banking community in the last few years,” said Sir Iqbal and added, “This conference will debate how we can build a more stable world economy. We call upon all delegates to contribute to this exciting agenda and help face the challenges of the future.”

Sir Iqbal also said, “The Islamic principles that govern trade and finance seek to promote investment and unlock cash flow. As a result of recent rise in oil prices there has been a significant increase in the liquidity of many Muslim countries.”

“London, with its unique reputation and unrivalled expertise in structuring customized financial transactions for a diverse range of clients has the ability to unlock the potential of this increased liquidity through Islamic finance. The IFTC is not a place to only talk business but to do business,” noted Sir Iqbal.

Dr. Muhammad Abdul Bari
Mentioning about the contribution of two million strong British Muslim community, Dr. Muhammad Abdul Bari, the Secretary General of the Muslim Council of Britain (MCB), said, “The IFTC is but another demonstration of what Muslims are doing to contribute to the wellbeing of our nation. In this gathering of investment bankers, lawyers, policy makers and business people we hope to create new partnerships and strengthen existing ones between the UK and Muslim countries.”

Dr. AbdulBari hopes the Second IFTC (Islamic Finance & Trade Conference) “will serve to rekindle interest in the nascent Islamic finance provision which has started in this country over the last few years. The government has pledged to provide a level playing field for Islamic financial products and the emerging framework for their provision in the UK will serve as a solid starting point.”

Referring to the 2012 Olympic Games in London, Dr. AbdulBari expressed his happiness that “The IFTC organizers have found areas where Islamic financial products can potentially be utilised to help actualize the 2012 Games, despite the credit crunch.”

“I am confident that this initiative will serve us all well. I am also hopeful that the broader debate on Islamic finance and trade during the two days of the IFTC will be followed up by meaningful co-operation by participants to help us chart our way out of the present financial crisis,” concluded Dr. AbdulBari.

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