Christmas is a time for good cheer and a celebration of the year’s adventures and travails. The 1st of January is a time for change ergo New Year Resolutions. Very few people manage to stick to their resolutions, typically seeking to change some negative trait, or fulfilling some aim (Common resolutions: I am going to quit smoking, or I will run the London Marathon). There is a poetic sense of fancy permeating through resolutions. The soaring feeling of hope tugs at each and every ambitious drive only to wither away by about January 5th!
It is not easy to change one’s habits even though one knows those habits are egregious. People think overcoming bad traits is a simple case of stopping. It is not easy and requires time and patience, consistent effort, and perseverance after relapsing (which inevitably happens). It is easy just to give up.
Any movement is always one moment away from collapse if the efforts are not maintained. Any idea can decay if not upheld by the idealist. But it is always hard to sustain a level of commitment needed to achieve any objective. Challenges constantly manifest themselves, and the successful are those that can overcome these challenges. They cannot submit to laziness or allow entropy.
Businesses, like people, are also susceptible to insouciance, particularly those that are market leaders. Nokia, for instance, was once head and shoulders above all its competitors in mobile telephony. It has now been cannibalised by Microsoft. Nokia became a victim of its own success, failing to see the changes in the market and not adapting.
Businesses need to be aware of the market, as well as awareness of itself. Rising internal costs can eat away at a company even as it portrays a picture of success and calm. Enron quickly comes to mind, Lehman Brothers too. Regardless as to whether at one moment a company can boast of healthy profits and market superiority, the next moment can be catastrophic. It may be sudden or it may be gradual. Being successful in competition is about sturdiness and adaptability. They work hand in hand.
So like the individual on Christmas celebrating, then turning towards introspection by New Year’s, a successful business needs to frequently look back, long around, and make resolutions as to how they can be better. Focus, hardwork and patience are needed in order to succeed and continue succeeding.
In many respects, the Islamic finance industry ended 2013 on a high. Hubs are growing, interest is increasing, demand is strengthening both on the retail and corporate side. The most pleasing aspect of Islamic finance’s inexorable rise is that more governments are seeking to incorporate Islamic finance into their systems, especially in emerging markets. Malaysia, Indonesia, the GCC countries, India, Nigeria, and Pakistan are economically growing, and with it, Islamic finance is progressing.
But I stress that the industry cannot be too cavalier. One needs to balance the positives with perspicacity. This issue of ISFIRE attempts to balance the two. ISFIRE itself is in a constant state of revolution, and we are pleased to incorporate a new section – ISFIRE Insight. The first Insight is on Sukuk. However, our focus has not been on the blossoming financial returns that capture the minds of investors. You can read that elsewhere – there is no shortage of Sukuk reports. The difference here is that we explore the link between Sukuk’s and the real economy. This is often forgotten, but sukuk’s future success will be dependent on the nexus between corporate liquidity, country infrastructure, business innovation and Sukuk returns. A number of leading practitioners and academics discuss Sukuk and we review three Sukuk and its relationship to the economy.
We also have a number of interviews of notable personalities. Irfan Siddiqui, CEO of Meezan Bank, and Ramlie Kamsari, CEO of CIMB-Principal Islamic Asset Management, are in the hotseat this month, and their interviews give an insight into their own professional history and their management practices. This issue ties a lot of ideas together. It concludes with an appeal for the industry to invest in ideas and entrepreneurship and join together investors, ideas, entrepreneurs and customers. This is the next step for the industry, which has undoubtedly laid a firm foundation on which to build. But it has to be aware that in the exhilaration of success, there are always ominous clouds. Adaptability is crucial otherwise the industry will be stagnant. The new year brings a time for reflection, and this first issue of the year calls out for greater reflection of the industry and where it needs to go.
