Kuala Lumpur, October 25-27, 2010 – The Fifth ISSF Forum was held at the Nikko Hotel in Kuala Lumpur, Malaysia, from 18 to 19 Dhu al-Qadah, 1431 (25 to 27 October, 2010). It was organized in a partnership between the International Shari’ah Research Academy for Islamic Finance (ISRA) of Malaysia and the Islamic Research and Training Institute (IRTI). The Fifth Forum represented the fruits of systematic planning and focused efforts, building upon the experience gained in the four previous conferences.

This conference focused on the theme of exploring tomorrow’s opportunities for Islamic finance in an attempt to break through the barrier formed by imitation and to expand its horizons. The ultimate goal is to enhance the progress of Islamic finance and contribute to overcoming the obstacles before it. Holding the conference in Malaysia highlighted its position as a leader in the Islamic finance industry and its ability to play a major role in the development of the Islamic venture capital industry.

Venture capital is an important element in the financing of companies for it will increase the range and diversity of services provided by the Islamic financial market.The success of the conference was a result of good planning and execution, the subjects addressed, and the expertise of the participating scholars. It has become an event that attracts experts, scholars, investors and practitioners from both the public and private sectors. They have been looking forward to the resolutions of this and similar conferences-especially after the failure of the conventional finance system in dealing with the global financial crisis and its minimal effect on Islamic finance-to provide the broad parameters that will help prepare for the next phase and keep abreast of developments and global trends that have an impact in the planning and structuring of Islamic investment in this region.

Among the prominent scholars who participated in this year’s forum were:

• Dr. Abdul Rahman al-Atram
• Dr. Misfer al-Qahtani
• Dr. Abdul Bari Meshal
• Dr. Sami Suwailem
• Dr. Said Bouheraoua
• Dr. Mohamad Akram Laldin
• Dr. Juma’ah Rokaybi
• Dr. Abdul Sattar Abu Guddah
• Dr. Muhammad Ali Elgari
• Dr. Muhammad ibn Ibrahim al-Suhaibani
• Dr. Muhammad Abdul-Razzaq al-Tabtabae
• Dr. Engku Rabia Adawiya
• Dr. al-Ayashi Faddad
• Dr. Muhammad Daud Bakar
• Dr. Aznan Hassan
• Dr. Ashraf Hashim

The conference opened with a recitation from the Holy Qur’an, followed by an address by Assoc. Prof. Dr. Mohamad Akram Laldin, executive director of ISRA, in which he welcomed the eminent scholars in attendance. He also called attention to the opportunity for the scholars and researchers to become better acquainted with one another and to cooperate in providing answers to the questions posed by the theme of this year?s conference.

Dr. Abdul Rahman al-Atram, Director of the Muslim World League’s Islamic International Foundation for Economics and Finance, gave a brief speech in which he stressed how important it is for the Islamic finance industry to have a vision for the future. Following this, former Prime Minister Tun Dr. Mahathir gave the keynote address of the forum, in which he reviewed the reasons for the global financial crisis, analyzed the reality of Islamic finance, and cautioned the key players in Islamic finance about leading the industry into similar crises. After that, he graciously launched the publication of ISRA’s Compendium of Islamic Finance Terms and the ISRA International Journal of Islamic Finance.
The activities of the first day were rounded out with two sessions. The first focused on the role of maqasid al-Shari‘ah (the objectives of Islamic law) in contributing to the development of the institutions and products of the Islamic finance industry. The second session addressed the role of Shari’ah committees, ways to develop them further and the mechanisms by which they provide oversight of their institutions.

Dr. Muhammad Ali Elgari opened the activities of the second day with a speech in which he explained the challenges currently facing the practice of Islamic finance as well as its future prospects. This was followed by two academic sessions. The first focused on the future of Islamic financial products with respect to the current challenges; the second on the role of corporate governance in Islamic financial institutions and ways to improve it. The last session was an open discussion in which leading Shari’ah scholars and Islamic banking experts affirmed the importance of planning and continued growth for the Islamic finance industry in order for it to be able to successfully compete and confront the challenges facing it. Each scholar and expert gave his opinions as to the measures most needed for the successful future growth of the Islamic finance industry, a future that many observers believe will be bright indeed.

Then Dr. Sami Al-Suwailem read out the recommendations and resolutions of the conference, which focused on the important role of academic research in the development of the Islamic finance industry and its tools and mechanisms.

The most important findings and recommendations of the conference are as follows:

1. The importance was stressed of forming specialized committees of economists, Shari’ah scholars and practitioners to develop Shari’ah-compliant products.
2. The importance of academic research as a tool for the development of the Islamic banking industry was affirmed.
3. There is a need to create a plan for the future with clear milestones for the development of Islamic banking.
4. There is a need to develop various aspects of the banking industry such as human capital and marketing.
5. There is a need to develop a comprehensive theory of Islamic banking that combines the various efforts found in the literature.
6. There is a need to develop means by which economists and Shari’ah scholars can complement one another’s areas of expertise.

Finally, participants suggested a range of projects and action plans as follows:

• A project to develop specific mechanisms and methods for improving Shari’ah supervision in Islamic banks.
• A project to “explore the prospects for the Islamic finance industry in light of maqasid al-Shari’ah (the objectives of Islamic Law)”.
• A project on the future prospects of Islamic financial products.

Conference Papers