Muslim leaders call for more Islamic finance

Islamic finance and banking must be developed as an alternative to the discredited Wall Street model of doing business, the World Islamic Economic Forum resolved as it wrapped up in Indonesia. More than 1,550 delegates including prime ministers, presidents, princes and sheikhs from 38 countries issued a declaration calling on the Islamic Development Bank (IDB) to take the lead in promoting Islamic finance.

They also called for "effective regulations" in the conventional global financial industry to "mitigate risk and failure" in the aftermath of the Wall Street collapse triggered by a credit crunch in the US housing sector. The declaration expressed support for the IDB Task Force for Islamic Finance and Global Financial Stability to "promote Islamic finance and banking as a viable alternative to the conventional financial system."

It also called on "governments and Islamic banks to expand Sharia (Islamic) compliant micro-credits" to small businesses in the developing world. "The declaration has a host of policy recommendations that, if implemented widely, would enact real change within the Muslim and non-Muslim world," World Islamic Economic Forum Foundation chairman Tun Musa Hitam said. The fifth Islamic economic forum opened in Indonesia, the most populous Muslim country and the largest economy in South East Asia, on Monday.

Other items on the agenda included the "global food crisis" triggered by last year's price spikes and falling production, alternative energy and the future of fossil fuels. The delegates included corporate leaders from 87 companies as well as governmental and non-governmental organisations. More than US$3 billion worth of agreements were signed on Monday, organisers said. The final declaration also contained a call to maintain the momentum for free trade in the face of protectionist tendencies triggered by rising unemployment and the global economic turmoil.

"The worst thing that anyone can do is become protectionist and thus invite protectionist retaliation in a trade war in which everyone will emerge a pitiable loser," Indonesian president Susilo Bambang Yudhoyono told the forum in an opening address on Monday. * AFP