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Wednesday November 28, 2012

Zeti: Malaysia wants steady growth, it is necessary to sustain and improve economy

Zeti officiating at the opening of the 2nd ISRA Colloquium 2012 in Kuala Lumpur. Looking on are INCEIF governing council chairman Dr Rozali Mohamed Ali (centre) and ISRA executive director Assoc-Prof Mohamad Akram Laldin. Zeti officiating at the opening of the 2nd ISRA Colloquium 2012 in Kuala Lumpur. Looking on are INCEIF governing council chairman Dr Rozali Mohamed Ali (centre) and ISRA executive director Assoc-Prof Mohamad Akram Laldin.

KUALA LUMPUR: Malaysia wants to have steady growth that will allow it to sustain and improve its economic position, Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said.

She said the country did not want high growth in one year and a very low one the following year.

Zeti said this on the sideline of the 2nd International Shariah Research Academy for Islamic Finance (ISRA) Colloquium 2012 here. She was asked whether the country could sustain strong growth next year.

She said the domestic economy was still strong and resilient.

She said one of the factors supporting this growth was the surge in investment activities apart from strong consumption coupled with the Government's infrastructure projects.

Gross domestic product (GDP) for the third quarter ended Sept 30 expanded 5.2% year-on-year, supported by domestic demand and investment activities. The central bank expects GDP growth for the entire year to be at least 5%.

On the global economy, she said it could stabilise and potentially recover if the structural problems in the economy and financial system, among others, were addressed.

Zeti added that Malaysia was in a good economic position from its initiatives and reforms over the last decade after the Asian financial crisis. Nevertheless, she said it would have to do much more to prepare for future disruptions that might be experienced by international financial markets and possible economic slowdown in different economies of the world.

In her opening address, she said there were three key imperatives in addition to the efforts to ensure financial stability for the Islamic finance industry and to the continued development of the financial system.

First, she said, was the need to highlight with greater clarity the value proposition of Islamic finance to ensure it remained a form of financial intermediation that served the real economy and continued to benefit society.

This required the development of financial products and services that manifest the value propositions of Islamic finance, and that such products were marketed with simplicity to facilitate a greater understanding of the main benefits of the products, she noted.

Zeti said Islamic finance presented significant appeal to the growing socially responsible investment (SRI), sustainable investments and ethical finance.

The SRI market was also fast growing, she said, adding that it was expected to become a mainstream asset class by 2015, reaching a projected total of more than US$26 trillion of assets-under-management, accounting for 15% to 20% of the global market.

The second imperative, she said, was for the outreach of Islamic finance to be inclusive and to be accessible to all, particularly the lower income groups and small businesses.

The third, according to Zeti, is for the effective dissemination of information to facilitate the standardisation and harmonisation process in Islamic finance.

Also launched was the Islamic Financial Knowledge Repository Portal by ISRA which would serve as an important source of reference and guidance for syariah and industry practitioners, policy makers, researchers and academicians.

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