Bloomberg Businessweek blurb on how Malaysia still rules in Islamic finance, an old theme of mine that runs all the way back to PNM.
The market, which came out of nowhere about a decade ago, is slated to be worth $1.6T by 2012. Islamic finance simply gets around the Koranic restrictions on interest by designating acceptable sources as the equivalent provider of interest payments. For example, an Islamic bond pays holders a share of the issuer's profits rather than interest.
While a host of Persian Gulf powers angle to dominate the market there, the real action, says the mag, is in East Asia, where Malaysia and Indonesia use such approaches to attract foreign direct investment. A big advantage for Malaysia:
Malaysia last year introduced an online trading platform for murabahah transactions, in which banks and companies buy and sell commodities based on a price that includes an agreed-upon profit margin that complies with shariah principles.
Moves such as these have given Malaysia a far deeper and more liquid bond market than its rivals.
Good stuff that shows that the "clash," such as it is, lies within civilizations and not between them.