2. Expert Insights

The slides "The Islamic economic challenge" presented by presented by Prof. Datuk Dr. Syed Othman Alhabshi at the International Seminar of Managing Global Economy.

The slides "An overview of Islamic finance from a regulator perspective" presented by Prof. Datuk Dr. Syed Othman Alhabshi at a Special Presentation to Board of Directors & Top Management of Qatar Financial Centre Regulatory Authority, Doha, Qatar.

Evolution of Islamic finance in the last decade. This decade has seen the rapid evolution of Islamic Finance resulting in the dramatic transformation of the industry. From being focused on retail financing to providing an extensive spectrum of financial products and services. From being focused on Muslim community to having an extended reach that serves the non-Muslim community.

Islamic finance today started with Islamic banking about 48 years ago. Twenty years later takaful became the second important Islamic finance institution. Asset management is another important area of progress which helped banks, takaful companies and non-bank financial institutions. Money and capital market is the most recent addition.

Finance used to be widely treated as part of economics which also encompasses personal, public and corporate finance. It is also considered as the science of fund management, spending, saving and budgeting. Hence it includes stocks, capital and money markets, unit trusts, asset management, etc. However, Islamic finance as is widely used today encompasses all of the above plus banking, takaful, wealth planning, capital and money markets and all activities related to them as well.

Leaders are needed everywhere. They are at all levels, have different roles at different places and times, always portray their potentials at the right time. They do not have the same style all the time and may or may not be successful.

Masalah paling penting: sistem kewangan berdasarkan riba telah menguasai dunia selama lebih lima abad semenjak bermulanya ekonomi perdagangan dan perbankan pada abad ke-16. Hakikatnya ialah ribatelah menjadi tajuk perdebatan selama lebih 3,000 tahun Aristotle, ahli falsafah dan pemikir berbangsa Greek, dalam bukunya "Politics" telah membantah amalan riba sekeras-kerasnya. Aristotle menulis, "Of the two sorts of money-making; one is a part of household management, the other is retail trade: the former necessary and honourable, the latter a kind of exchange which is justly censured; for it is unnatural, and a mode by which men gain from one another."

It is exactly a decade after the East-Asian Financial crisis of 1997-98 that the world is saddled with yet a much bigger and deeper financial and economic turmoil. The East-Asian Financial crisis was mainly due to the serious structural weaknesses of the East Asian economies where rapid economic growth for over seven years was not supported by genuine growth engine. Rather it was fuelled by rapid monetary growth, current account deficits, negative Savings-Investment gaps and short term capital inflows. The vulnerability was further enhanced by overvalued exchange rate and reduction in foreign capital inflow.

The Quran relates the story of Prophet Joseph who was a master in interpreting dreams. When the King of Egypt saw in his dream that there were seven lean cows eating seven fat cows and that there were seven green ears of corn and seven others that withered, Prophet Joseph said there will be seven years of prosperity to be followed by seven years of famine. What was mentioned in the Quran which happened thousands of years ago, is still being repeated until the present day. What is obvious is that each recession was more severe than the previous one.

The question we hope to answer is what are the preconditions needed to embrace Islamic Finance? The term Islamic Finance must be underlined by Shariah, otherwise there is no Islamic Finance. It encompasses banking, insurance (takaful) wealth planning, capital and money markets. In fact, it includes also the personal, public and corporate finance. In fact, it also includes international finance. Shariah is essentially the Islamic law that covers all aspects of life for Muslims. Its main objective is to provide what is good and beneficial to society and prevents what is harmful and bad for society. This is only achievable by commanding what is good and forbidding what is evil. It is to create a just and fair environment for all. Justice and fair dealings is the ultimate objective.

Tujuan syarikat ditubuhkan adalah untuk melakukan sesuatu kegiatan yang berfaedah kepada pemiliknya, pekerjanya, pengurusannya, pelanggannya. Pengurusan merancang, melaksana, mengurus dan memanta. Pekerja melakukan segala kegiatan bagi mencapai tujuan penubuhan syarikat dibawah pengawasan pengurusan. Pemiliksyarikat (dalam hal ini Negeri Kedah Darulaman) telah mengeluarkan modal yang besar dengan harapan syarikat itu maju. Kerajaan Negeri melantik Pengurus Besar dll untuk melaksanakan kegiatan syarikat. Kerajaan Negeri melan.tik Ahli Lembaga Pengarah untuk mengawal, memantau, menentukan strategi, dasar, peraturan, budaya kerja, dll supaya syarikat maju

Ekonomi merupakan asas hidup yang amat penting dan bermakna. Masalah ekonomi boleh menjelma dalam berbagai cara. Ketidak seimbangan ekonomi menonjolkan perasaan negatif antara mereka yang berada dan yang tidak berada. Paras harga yang tinggi juga boleh menjadi masalah besar. Inflasi boleh menghakis pendapatan terutama mereka yang berpendapatan rendah. Pengangguran juga akan membawa akibat yang buruk kepada negara. Yang paling penting ialah kadar kemiskinan yang semakin meninggi boleh menjajaskan kesetabilan sosial dan politik negara.

Banks keep only the required reserves and lend out or invest the rest of the deposits made by the depositors. In a fractional-reserve banking system, the loan of one bank becomes the deposit of another bank. This will allow the second bank to lend out all the deposits less the required reserves. In this way, the total money created is the reverse of the reserve ratio. If the reserve requirement is 10%, then the total money created will be 10 times the deposit.

The term "Family Takaful" means "guarantee the family" which is more apt than the term "Life insurance", simply because no one can guarantee his own life, what more other people's life. What an individual participates in when he takes up a family takaful is to ensure that when he is indisposed, his immediate family will receive the benefits of the takaful that he has participated in. The benefits will be in three different forms, the accumulated contribution that he has made over the years, the profit that the accumulated contributions have earned and the takaful coverage that he has pledged to participate in.

Bahasa Kebangsaan digunapakai di setiap sektor kerajaan semenjak Bahasa Melayu dijadikan Bahasa Kebangsaan kerana ia adalah dasar negara. Sektor kerajaan termasuklah dalam semua bidang pentadbiran dan pendidikan. Bahkan, untuk mengendalikan program pendidikan didalam Bahasa lain daripada Bahasa Kebangsaan perlukan kelulusan Menteri.

An abstract is written in Arabic.

In the last few years, SMEs have witnessed a marked improvement in their performance. Real Gross Domestic Product (GDP) of SMEs has consistently outperformed that of the overall economy, expanding at an average annual growth rate of 6.8% versus 4.9% for the overall economic growth in the period 2004 - 2010.

The basic five rules of Islamic finance are: no riba, superior clarity, backed by real assets, risk sharing propositions, and nor haram activities.

Islamic venture capital is a strategic tool to enhance cooperation in the Muslim world. This is because it helps form smart partnership among the members of OIC countries. Venture capital is an investment in highly risky projects in return for potential high return focusing mainly on technology. For more than a decade, the trend has shown tremendous changes; hence venture capital investment records increasing interest of the investors in other sectors such as agricultural production, medical instruments and others. Islamic venture capital has been running in parallel with the mainstream in Malaysia. There are several reasons supporting the emergence of Islamic venture capital namely, attraction of Middle East investors and underutilisation of surplus in the Muslim world. This paper traces the development of Islamic venture capital in Malaysia, identifies the regulatory bodies, and the policy initiatives, and the pioneer corporations. In conclusion, it examines three phases of the development of Islamic venture capital in Malaysia namely, the evolutionary process, the degree of incorporation and developmental patterns. The applied Shariah mechanisms are hybrid of musharakah, mudarabah, and wakalah. It suggests that the balance between supply side and demand side, public friendly regulation may actualise the Malaysian industrialisation dream. In addition, refocusing long-term investment, reorientation of SMEs towards venture capital investment, establishment of private-oriented venture capital industries, creation of cash waqf and/or Islamic social bank are some suggested solutions in promoting Islamic venture capital in Malaysia. They may also be of help to other jurisdictions.

Islam has encouraged the early Muslims to spend out of whatever they have for charity. When the verse 92 of Surah Ali Imran was revealed, there was not a single Muslim who did not part with whatever they have so as to belong to the category of "birr" or good. The fact that all wealth belongs to Allah means that whatever we give away in His cause is nothing compared to what He has given us. The most important implication is that waqf allows accumulation of capital infinitely as long as more and more capital are being made waqf.

The doctrine of judicial precedent plays an empirical role in common law, but it has only persuasive value in European continent countries which are practicing civil law system.It has not been recognised as having binding force in Islamic judicial system. In Islam, each case has to be decided based on its own merit and previous decisions can only be considered as guidance for the future cases. This position is still being maintained by some countries such as Malaysia and Saudi Arabia. In Pakistan and Nigeria the doctrine of judicial precedent is applied in deciding cases. Due to this contradiction among Islamic judicial system in various countries, a question arises relating to the feasibility of the application of the doctrine of judicial precedent in Shariah courts. Accordingly, in this paper, the factual nature of the judicial precedents in Islamic judicial systems have been examined comparatively in some details with reference to some selected countries such as Malaysia, Nigeria and Pakistan. This paper points out that the doctrine of stare decisis and judicial precedent can be applied in Shariah courts as guiding precedents but not as binding since there is no express prohibition in Shariah to take judicial guidance from previous decisions.