@ Halal | May-June . 2024

Anwar ’ s announcement of significant investments and reforms is poised to promote economic growth and ensure long-term sustainability

BY ZAFIRAH ZAFRUDDIN

In his keynote speech , he announced several initiatives to promote Shariah-compliant investments , enhance social finance , and innovate Islamic finance .

MAJOR INVESTMENT THROUGH DANA PEMACU

The Retirement Fund Incorporated ( KWAP ) will allocate up to RM3 billion to Shariahcompliant investments . This investment aims to support high-growth local companies and boost the venture investment ecosystem .

Anwar explained that this will be accomplished through ‘ Dana Pemacu ’, a private equity investment strategy that aims to accelerate the growth of high-potential local companies .

This initiative will focus on vital sectors essential to Malaysia ’ s economic development . These sectors may include food security , education , silver economy and healthcare , digital economy , financial inclusion , and energy transition .

Dana Pemacu will also focus on other areas with significant social or environmental impacts . Most importantly , this investment plan aligns with the MADANI Economy framework a comprehensive approach emphasising responsible investment practices and sustainable development .

It suggested that Dana Pemacu ’ s capacity to build a sustainable economy would be maximised if it followed the MADANI Economy framework .

MALAYSIA ’ S FIRST SOCIAL EXCHANGE

In related news , the Securities Commission ( SC ) plans to establish Malaysia ’ s first Social Exchange ( SE ).

The SE will serve as a hub where private investors can fund projects with positive social impacts . Non-governmental organisations ( NGOs ), social enterprises , and state Islamic religious councils will be the primary beneficiaries of this innovative funding mechanism .

The SC will establish and enforce standards and regulations to oversee the SE ’ s management and operation . These measures guarantee high transparency , accountability , and efficiency in using funds .

Establishing the SE and other initiatives underscores the government ’ s unwavering commitment to a holistic development approach . This strategy should reassure the audience about the comprehensive nature of Malaysia ’ s nation-building efforts .

INNOVATING SUKUK

Malaysia is discussing adding innovation and advanced features to its sukuk issuance . This move is expected to enhance Malaysia ’ s global Islamic finance industry competitiveness .

Sukuk ’, also known as Islamic bonds , are essential in Islamic finance . They adhere to Shariah and serve as an alternative to conventional bonds , playing a crucial role in the industry ’ s financial ecosystem .

Anwar also underlined Malaysia ’ s determination to innovate sukuk structures to address requirements and challenges associated with climate and energy transition .

Developments will be made to ensure compliance with Islamic finance principles while also integrating modern financial solutions .

By aligning Islamic finance with global sustainability goals , Malaysia has the potential to solidify further its reputation as a forwardthinking financial hub . This prospect should instil a sense of pride and confidence in the country ’ s financial sector among the audience .

And with that , the government hopes to complete the development and structuring of this new sukuk by next year .

“ We plan to finalise this sukuk by 2025 as we work to complete all required arrangements and preparations ,” said Anwar .

The new sukuk structures will be designed to fund projects related to climate change and the transition towards renewable energy sources .

That said , sukuk could be utilised to finance green projects . For instance , installations of renewable energy , enhancements in energy efficiency , or other environmentally sustainable projects .

Malaysia seeks to differentiate its sukuk offering from other markets by incorporating cutting-edge technology and unique structures .

DEVELOPING EXPERTISE

Malaysia plans to spearhead a global Islamic economics expert development programme .

Anwar stressed cultivating regional expertise . The goal is to produce professionals who are well-educated and knowledgeable . In addition , they should be innovative and capable of addressing contemporary global issues .

According to Anwar , the multi-track programme could provide participants with professional development opportunities . This would include leadership training , real-world research , and working internships .

These opportunities will ensure participants gain both theoretical knowledge and practical experience . Being well-equipped with both will allow them to tackle challenges effectively .

By leading this initiative , Malaysia demonstrates its ambition to be at the forefront of Islamic finance . This commitment to innovation in the field sets a strong example for other countries to follow suit .

MALAYSIA ’ S COMMITMENT

The Global Forum on Islamic Economics and Finance ( GFIEF ), a two-day event organised by Bank Negara Malaysia alongside the SC and other organisations , serves as a crucial platform for global leaders , policymakers , and industry experts to discuss and shape the future of Islamic finance .

Under the theme of ‘ Shaping a Resilient Global Islamic Economy Through Valuebased Reforms ’, GFIEF brought together key international figures . They exchanged ideas on using Islamic economics to promote equity and prosperity among everyone .

Malaysia ’ s commitment to leading advances in Islamic finance is evident through various initiatives unveiled at the event . These involved an RM3 billion investment through Dana Pemacu , the proposal to establish the SE , innovations in Malaysia ’ s sukuk issuance , and an emphasis on professional training .

Through these initiatives , Malaysia is setting itself up for long-term industrial success . –