Academic Proceeding

This paper compares the transactions costs in two economies, one conventional, the other Islamic. The conventional economy is characterized by borrowing to finance some current purchases, while the Islamic economy disallows interest-based lending and operates on the basis of universal banking that mixes commerce and commercial and investment banking. To finance current purchases, it provides customers with credit purchase agreements, which entail that the bank buy the commodities and assets from suppliers and resell them on credit to customers satisfying conditions of creditworthiness similar to those that conventional banks require for borrowers. The paper uses simple calculations to compare transactions costs in both economies. It argues that under competitive competition, credit purchase arrangements occasion lower transactions costs than borrow-and-purchase arrangements in the conventional economy. The most important implication is that a policy that lifts entry barriers in the Islamic banking market and allows banks to combine commerce with banking activities contributes to social welfare. The paper concludes with suggestions for further points of research.

The paper "A proposed framework for human capital development in the Islamic financial services industry" presented at Knowledge Economy and Management Congress, Istanbul, Turkey.

For Muslims zakat is obligatory and different jurisdictions in the world have different mechanisms to administer it. Maldives is a hundred percent Muslim country and zakat administration in the country is unique. As such the objective of the paper is to discuss the zakat administration in Maldives with special reference to zakat al mal and to discuss the challenges facing the existing way of zakat administration. The paper also includes ways to overcome the challenges. No literature on this area in Maldives could be found and as such reference to primary materials such as unpublished statistics, reports, brochures have been made. It is hoped that this paper will encourage further research on this area in Maldives.

There has been a tremendous growth in the number of empirical research on happiness by economists in the past decade. The present study is in the right direction as it explores a relatively intriguing area of research on the 'economics of happiness'. The purpose of this study is to find the existence of linkages between happiness and several economic variables. A cross-sectional econometric analysis is employed to examine the impact of the economic variables of income (Gross Domestic Product per capita), health care expenditure and pollution (proxies by CO2 emissions) on happiness across 42 countries in 2006. The findings indicate that a significantly positive relationship exists between happiness and income while pollution has a negative impact on a nation's well being. The level of health care expenditure however, does not have a significant impact on happiness. The study concludes with an examination of policy implications of the findings.

In view of the heightened interest in Islamic Finance (IF) of some of the countries in the Middle East, in particular Morocco, which is currently initiating the promulgation of new laws on IF, it is thought to be timely to present in this paper the model of Cooperative Finance (CF) based on the system of mutual investment that is in line with Shariah. It is hoped that this model can be considered for integration within the new Moroccan legal framework. This approach provides alternatives to banking credit or financing that are in strict compliance with the legal Islamic Finance principles. Moreover it encourages solidarity within civil society or between groups of people demonstrating generosity because of the employment of the philosophy that is essentially based on cooperative principle. Of course, implementing economic structures to embrace the efforts of people with Islamic ethics and sensitivity to finance goods and services based on the cooperative spirit is a real challenge in IF. However, models relying on CF solutions have been implemented, in small scales, for nearly 25 years worldwide (Ansar-UK, Lariba-USA, Qurtuba Canada, etc.). It would make sense to integrate and develop such solutions in a significant industrial scale in Morocco. The purpose of this paper is to articulate the experience of ANSAR-UK as one of intermediate or transient solution before the implementation of monetary policy along the principles of Islamic finance. Specifically, we will present two types of financial products used by AFG structure: (i) Interest free credit facility (Qard Hasan) and (ii) Mutual housing finance model which can be studied for implementation in Morocco. The challenge is to bring out the principles of mutual aid and solidarity which lies at the heart of the IF system that meets with the requirements of the existing Moroccan legal and legislative system. Like ANSAR-UK, we hope this model can be extended to other products such as financing educational products, SMEs, SMIs, business services, etc. based on ethical principles and sharing of profits and losses at a certain level of risk.

The interest rate has been a major issue worldwide, as well as in ASEAN countries. It shifts almost every minute driven by lots of factors. The main goal of this research is to look at the relationship between lending interest rate with the macroeconomic variables related to economic activities including during crisis periods and to forecast the rate in 2020. Approaches used in the study include line charts, multiple linear regression model and the ARIMA model. The paper utilized annual data period between 1971 and 2019 in Malaysia which includes three crisis periods while forecasting into the fourth crisis as we currently face the COVID-19 period. The result shows that the lending interest rate has somewhat negative correlation with the macroeconomic variables throughout three major financial crises in Malaysia. The GDP growth and manufacturing are found to have significant effect on the lending interest rate via multiple linear regression. However, the industry and the agriculture have no significant impact on the lending interest rate. As COVID-19 fractured world economies and led countries to great depression, worldwide central banks decided to take action to lower interest rates to significantly boost consumer spending and cash flow. Due to this reason, the findings revealed the actual value of lending interest rate in 2020 is 3.51 while as the projected value of lending interest rate in 2020 is 4.85 which indicates that the actual value is slightly smaller compared to the forecasted value.

Ever since the success of GoFundMe, an American charity- or donation-based online crowdfunding launched in 2010, this platform has become popular among not-for-profit organizations to raise funds to support their social activities and projects. However, the use of this online platform within the Islamic social finance domain, particularly by the government bodies is very limited. Hence, this paper provides a case study of Asnaf Care, a charity crowdfunding platform that was launched by a state zakat authority in Malaysia, i.e., Lembaga Zakat Negeri Kedah (LZNK) to specifically assist eligible beneficiaries who are affected by the global pandemic of coronavirus (COVID-19). The case study aims to assess the effectiveness of this platform in raising funds to cushion the impact of COVID-19 on the affected zakat recipients. In this discourse, key features of Asnaf Care, its campaigns or projects, and the total collected funds since its launch in March 2020 until December 2020 are highlighted. The case study is hoped to pave the way for any zakat authorities in Malaysia or worldwide in exploring an alternative digital platform to raise additional funds during financial crises due to pandemics, calamities, or natural disasters.

This paper is aimed to examine the impact of bail-out policy carried out following the financial crisis which hit the Malaysian economy some years ago. Using panel estimation methods, this study tries to analyze the relationship between firms‟ investments and their cash flows before and after the crisis period. Theoretically, the relationship becomes tight due to the crisis. This tight relationship indicates the existence of severe financial constraints faced by existing firms. Such relationship is on the contrast to the loose relationship prior the crisis when the financial market was liberalized through various deregulations including the interest rates deregulation. However, to combat the crisis Malaysia carried out a variety of counter-crisis measures. The measures are packaged under the bail-out policy implementation. If the bail-out policy was a success, it can be measured through the easiness of financial constraints the firms faced. Using annual financial data of unbalanced panel of 1988-2005, the results found are in favor of the bail-out policy.

The Insolvency department (MdI) statistical releases indicate total bankruptcy cases as at September 2013 is 251,209 bankrupt filed (The Star, 2013) and recent bankruptcy record exhibits that the declared bankrupt cases are getting younger as comparing to past years record which worries by Bank Negara. The increase in personal bankruptcy case reflects erosion in credit evaluation process and this has lead the banks to be cautious and to tighten their lending process and loan approval. The purpose of this research study is to examine the causality factors towards personal bankruptcy in Malaysia. The concept of financial numeracy has emerged recently in personal financial management to explain the antecedents and consequences of financial numeracy. The result found significant on the mediation factors on financial numeracy and financial management outcome effects towards personal bankruptcy. Hence, the mediation outcome also found support on this research proposed theoretical framework

This paper provides a discussion of a study that examines accounting in Islamic perspectives. The discussion includes an overview of the development of Islamic finance, accounting in Islamic perspectives, and four key accounting assumptions, namely "substance over form", "time value of money", "fair value" measurement and "recognition based on probability", which serve as important guides to preparers of financial information.

The economic theory on crime behavior proposed by Becker (1968) suggests that an increase in the number of policemen can deter crimes. However, recent studies found a positive relationship between police personnel and crime rates. The purpose of the present study is to investigate the effect of police personnel on 15 categories of crime rates in Malaysia for the period of 1973 to 2005 by using the vector error-correction model. Our results suggest that 8 categories of crime rates support Becker’s crime economic theory, while 6 categories of crime support the ‘long-run natural rate of crime’ hypothesis

According to the Financial Stability Board's recent study, crypto-asset market capitalisation grew 3.5 times in 2021 to USD2.6 trillion. Still, the market remains a small portion of the overall global financial system, and direct connections between crypto assets and systemically important financial institutions and core financial markets are limited at the present time. The market, according to the European Central Bank, represents less than 1% of the global financial system in terms of size, but it is still similar in size to, for example, the securitised sub-prime mortgage markets that triggered the global financial crisis of 2007-2008. However, most central banks perceive the use of cryptocurrencies for payments to be trivial or limited to niche groups and not widely used in critical financial services (including payments) on which the real economy depends. Besides, the different incidences of price volatility in cryptocurrency markets have, so far, been contained within crypto-asset markets and have not spilled over to other financial markets and infrastructures. This report - which is based on the notes and commentaries shared by the participants of the workshop "Cryptos: Distinguishing Hype and Realities in Islamic Finance", held at SOAS, University of London on 16th June 2022 - discusses the above-mentioned topic in some detail. Although the full commentaries are extremely valuable and beneficial, this 'summary of commentaries' aims to discuss the most crucial concerns regarding cryptos that the world faces today. The report gives some insights regarding the crypto-asset industry and sheds light on some legal and Shari'ah issues that can arise in cryptocurrencies. To serve this purpose, this report is a brief compilation, with selective editing, of the notes and commentaries shared by individuals prior to the workshop. A list of contributors is placed at the end of this report.

An abstract is written in Arabic.

This paper investigates the long run Granger causality between defense spending and economic growth for 20 selected Organization of Islamic Countries (OIC) by employing the Error-Correction Model (ECM) framework using annual data for the period 1960 to 2005. defense spending (milex) is measured using the ratio of defense spending to gross domestic product (GDP); while economic growth (rgdpc) is proxy by the real GDP per capita. The results of our study indicated that one way long run Granger causality was found running from economic growth to defense spending for Burkina Faso, Indonesia, Kuwait, Saudi Arabia, Sudan, Togo and Turkey. On the other hand, one way long run Granger causality was found running from defense spending to economic growth was found for Iran, Mauritania and Nigeria. However for the rest of the OIC countries, the results suggested no relationship between defense spending and economic growth.

The paper "Demographic transition and economic growth nexus: the case of Malaysia" presented at 6th International Borneo Business Conference (IBBC) 2014, Kuching, Sarawak, Malaysia.

Malaysian firms have been reported to involve in Asset-Backed Securities since 1986s where Cagamas is a pioneer. This research aims to examine the factor of influencing the primary market spread and measure financial performance of RCE Marketing as case study. Ordinary Least Square (OLS) regression analysis are applied for the study period 2007-2012. The result shows two determinants influence or contribute to the primary market spread and are statistically significant for the case study for RCE Marketing. The financial performance shows that this company is resilient during global financial crisis. RCE Marketing also shows better profitability capacity and dividend payments to their investors.

The paper "Determinants of spread in Islamic securitisation market: empirical evidence from Malaysia" presented at 16th Malaysian Finance Association Conference (MFA2014) at Sasana Kijang Central Bank of Malaysia, Kuala Lumpur.

This study was conducted to investigate whether paddy cultivation in Malaysia do indeed contribute to increased CO2e. Johansen (1991) co-integration method was used to investigate the relationship between these variables, and the result clearly shows that they are highly co-integrated or literally means that they (both variables) share long term time trending patterns. The long run relationship is further investigated based on granger causality and vector error correction model (VECM), and the result again clearly shows that paddy production indeed granger causes the increased CO2e. Dynamic Ordinary Least Square (DOLS) method was also employed to check the robustness and consistency of the findings and the results are consistent and robust with the VECM estimations. The findings of the study clearly show the dire needs for the government to invest more on the R&D in the paddy production sector in order not to deteriorate further the environment albeit CO2e while securing the food security.

This research paper attempts to empirically examine the short-run and long-run causal relationship between income level, energy consumption and carbon emission. Trade openness and urbanization is also included to act as control variables.