Experts highlight sukuk as important Islamic finance tool

Minister of Finance Mohammad Abu Hammour on Saturday called for intensifying efforts among Islamic states to achieve high-level cooperation and set up joint plans to address current economic challenges. Deputising for His Majesty King Abdullah, Abu Hammour inaugurated the International Conference on Investment in Islamic States which opened yesterday in Amman. He stressed that Islamic states should set up joint economic strategies and work on implementing all the agreements of the Organisation of the Islamic Conference (OIC) related to boosting economic and trade ties among member states. In addition, Abu Hamour emphasised that there is an urgent need to increase investment and trade exchange among members of the OIC, saying that Islamic states should work on drafting the necessary legislations and offer all forms of incentives to investors wishing to invest in these states. Islamic Chamber of Commerce and Industry (ICCI) President Saleh Kamel said unemployment is the basic drive behind the demonstrations, revolutions and protests in several Arab and Islamic countries, indicating that it is the responsibility of the business community to create job opportunities and increase investments. During the opening session of the conference, which was organised by the Jordan Chamber of Commerce and the ICCI, Khawlah Nobani, an expert in Islamic finance, said Islamic sukuk can be used to finance major projects, and indicated that Jordan has “pioneering plans” to issue Islamic sukuk for attracting financing to implement the Red Sea-Dead Sea Water Conveyance Project, the national railway network project and renewable energy schemes. Nobani pointed out that the value of Islamic sukuk issued during the first quarter of 2011 stood at $26 billion in the international market, noting that around 50 per cent of these sukuk were issued in Malaysia with a value of $13 billion. Muhsen Abu Awad, head of the mega-companies department at the Arab Islamic Bank, said Islamic sukuk can contribute to stimulating economy and can help governments and companies obtain finance for their enterprises. He added that after the international financial crisis, Islamic sukuk emerged as one of the most important investment tools and that experts in Islamic economy estimate the value of Islamic sukuk to reach $3 trillion by 2015. Abu Awad also called for classifying Islamic sukuk by internationally accredited agencies to reduce risks and offer an Islamic product with the least risk rates.