COMSATS Institute of Information Technology (CIIT) Lahore organized its third Global Forum on Islamic Finance (GFIF) at Pearl Continental Hotel Lahore on March 10-11, 2015. Delegates and speakers from around the world, including from UK, USA, Malaysia, Bahrain, Saudi Arabia, Germany, Lebanon, Canada and many more, attended the event. It was a well-organised conference for which the organisers must be congratulated. The rector of the university, Professor S. M. Junaid Zaidi, and Director COMSATS Lahore Campus, Professor Mahmood Ahmed Bodla, were instrumental in making the third Forum a huge success. The university’s top management should be appreciated for their strategic vision and spotting an opportunity in Islamic banking and finance (IBF) for developing a centre of excellence in a niche market like this. There is no doubt that COMSATS has put Lahore on the global map of IBF There is more to GFIF than just creating a marketing gimmick. With the active engagement of COMSATS in IBF, the Institute has gained a central position in IBF on a national level. The likes of International Islamic University Islamabad (IIUI), which have traditionally been considered as torch-bearers of the movement of Islamic economics, banking and finance, have been eclipsed by this new leadership role of COMSATS.
The Forum was attended by Saeed Ahmed, Deputy Governor of State Bank of Pakistan, who is also responsible for development of Islamic banking in the country as part of his leadership role at the central bank. There was active participation and support from Islamic Research and Training Institute (IRTI), a member of the Islamic Development Bank Group. Dr Zamir Iqbal, CEO of the World Bank Global Centre of Islamic Finance, was a keynote speaker. Dr Akram Laldin, Executive Director of International Shari’a Research Academy for Islamic Finance (ISRA) also spoke at the conference. Ijlal Ahmed Alvi, CEO of International Islamic Financial Market (IIFM) also joined the speakers from Bahrain. Dr Imran Usmani and Mufti Zubair Usmani represented Darul Uloom Karachi. In this way, COMSATS succeeded in engaging major stakeholders in the third GFIF.
Unlike Karachi, which hosts the financial district of Pakistan, Lahore is a more secure, less volatile and culturally richer city. A number of banks and financial institutions (e.g., Muslim Commercial Bank, Allied Bank, the Bank of Punjab, FINCA Microfinance Bank, and the Punjab Provincial Cooperative Bank) have their headquarters in Lahore. Lahore Stock Exchange provides a perfect substitute to the more vibrant and better-known Karachi Stock Exchange. Being capital of the largest province of Punjab, with population of nearly 100 million, Lahore can be developed as a global centre of excellence for IBF.
In Karachi, Darul Uloom Karachi has played a lead role in developing the requisite human resources for the Islamic banking industry. In Lahore, COMSATS can play a similar role by developing its newly established Centre of Islamic Finance as a centre of excellence for the research and talent development for the Islamic financial services industry.
Undoubtedly, Kuala Lumpur is the global capital of IBF, with numerous industry-building institutions like Islamic Financial Services Board (IFSB), International Islamic Liquidity Management Corporation (IILMC), International Centre for Education in Islamic Finance (INCEIF), International Islamic University Malaysia (IIUM) and International Shari’a Research Academy for Islamic Finance (ISRA). The key to success of Kuala Lumpur as a global centre of excellence for IBF is the staunch support of the government and the role that the central bank – Bank Negara Malaysia – has played in the promotion and development of IBF nationally as well as internationally.
Dubai is aggressively pitching itself as a global capital of Islamic economy. It boasts having the best infrastructure for the financial services industry and linkages to the global Islamic economic routes. It has established a number of industry-level bodies like Dubai Islamic Economy Development Centre and Dubai Centre of Islamic Banking and Finance. Like in Malaysia, the key support to Dubai as a centre of excellence for Islamic finance and economy comes from the government.
Bahrain – once the unchallenged leader in IBF – has slipped to third position in terms of its global standing as a centre of excellence in IBF. With the likes of Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), General Council for Islamic Banks and Financial Institutions (CIBAFI), International Islamic Financial Market (IIFM) and the Islamic International Rating Agency (IIRA), Manama remains central to the global developments in IBF. The government’s commitment to IBF is crucial for the leadership role of Bahrain in the global Islamic financial services industry.
The fourth centre of excellence for IBF is London. With numerous industry-building initiatives like Institute of Islamic Banking and Insurance, Islamic Bankers Association and UKTI’s lead role in the promotion of London as a hub of IBF, London remains central to developments in the global Islamic financial services industry.
Istanbul is also fast emerging on the global map of IBF. The government of Kazakhstan is also promoting Almaty as a regional centre of excellence for IBF.
In this background, Lahore has a long way to claim to be a global centre of excellence for IBF. However, it has all the ingredients to become one such centre if the government of Punjab starts owning IBF and devises a strategy to attract Islamic financial capital from around the world. Issuance of sukuk can bring a lot of attention to Lahore, as the provincial government needs significant sums of money to develop infrastructure in the city and the province at large. The government of Punjab should study the issuance of sukuk by the German state of Saxony Anhalt that issued a 100 million euro sukuk in 2004. This landmark sukuk instantaneously put the state on the global map of IBF.
Although there is a need to look into this proposition in great detail but the following steps should
be considered as a general guideline to make Lahore as a global centre of excellence for IBF:
- The government of Punjab should start sponsoring GFIF as a premier conference in the global calendar of IBF;
- State Bank of Pakistan should establish an endowed Chair in Islamic Finance at COMSATS to further strengthen Centre of Islamic Finance;
- The provincial government should set up a task force headed by an Islamic finance expert of international repute, with an objective to identify opportunities in IBF, which could be exploited to attract Islamic financial capital to the province in general and Lahore in particular;
- Through a university like COMSATS, international linkages should be developed with other centres of excellence for IBF, notably Kuala Lumpur, Dubai, London and Bahrain; and
- The provincial government should choose the crucial area of Islamic microfinance to develop Lahore as its global hub.
