Two areas come to mind. One is closer integration with the halal industry. The second is using the Ottoman Ehsam instrument as part of an Islamic monetary policy. The latter is under investigation by INCEIF and ISRA to see if it can be applied in the present day.
DAUD VICARY ABDULLAH
President & CEO, INCEIF
At present conditions are very difficult for Islamic cross-border financing globally, because of the Eurozone crisis, and regionally, due to the adverse economic developments resulting from the Arab Spring.
Now however is arguably a good time to reconsider what Islamic cross-border financing can offer. In the past the capital movements have been virtually identical to conventional financial flows apart from the Shariah screening.
The product offering would be more innovative if the risk sharing characteristics of Islamic finance were stressed. Private equity finance for example could be structured using a Musharakah model. Most international Sukuk offerings are based on Ijarah structures which are similar to conventional floating-rate notes.
A more innovative approach would be to use increasing Musharakah involving an exit to equity, the opposite of diminishing Musharakah with an exit to cash.
There are many innovative possibilities to consider during this period of reflection before cross-border capital flows pick up.
PROFESSOR RODNEY WILSON
Director of postgraduate studies, Durham University
Principal consultant, Formabb