While there will be volatility, Islamic finance is at a point where this will be overcome. There are investment and financing opportunities in many parts of the world, particularly Asia and Africa, that would benefit from Islamic finance and I believe that despite the current crisis, these will be financed and an increasing proportion of them will be financed in accordance with Shariah.
DAUD VICARY ABDULLAH
President & CEO, INCEIF
There is indeed much uncertainty in the global economy deterring cross-border flows. Islamic banks have little exposure in the Eurozone or the US, but within the Middle East the Arab Spring continues to have adverse financial consequences.
The volatility in global markets may however encourage some in the Islamic finance industry to focus on their home markets or in their home region. The election of parties favoring Islamic finance in Tunisia and Egypt may create opportunities for Gulf investments in those countries. The new Tunisian government is already considering tax concessions to encourage Islamic finance.
Although cross-border investors face increased risk, there are also new opportunities. As always the challenge is to achieve the optimal balance between immediate and short-term risk in volatile markets and laying the foundations for longer-term returns.
PROFESSOR RODNEY WILSON
Director of postgraduate studies, Durham University