CB Chief finds Islamic finance an opportunity to achieve high economic growth

Friday, 30 August 2013 00:00 - - {{hitsCtrl.values.hits}}

By Shabiya Ali Ahlam The Central Bank said that Islamic finance provide a massive opportunity for Sri Lanka to achieve the targeted economic growth of 8%. Addressing a fully packed audience at the second Islamic Finance News road show, CB Governor Ajith Nivard Cabraal during his keynote stated that the country needs to utilise Islamic finance avenues to achieve better economic outcomes.

“The Central Bank sees Islamic finance as an enormous opportunity for Sri Lanka and the world as well. We need to make the best use of this opportunity by opening up channels and allowing investors to enter the country with new instruments,” he told the forum which was organised by REDmoney Group, Malaysia. He noted that for Sri Lanka to achieve an economic growth of 8%, the country requires more investment in the country. “With Sri Lanka searching for 8% growth, this rate cannot be achieved with the current savings of the country. In fact, with the current savings, the country will be able to achieve a sustainable growth rate of 4-5%. To go beyond this in a sustainable manner, we need to broad-base our instruments and require new institutions to partner with Sri Lanka,” Cabraal said. Sharing the success story of Malaysia, which is recognised as a global leader in Islamic finance, Cabraal opined that Sri Lanka today is what Malaysia was 20 years ago. Encouraging players in the local financial sector to get involved in this arena, he advised the institutions to start early. “Unlike Malaysia, Sri Lanka did not plant trees 20 years ago. To ensure that our country moves forward in terms of Islamic finance, local companies should start planting trees today,” he said.

Cabraal also used the forum as a platform to share with visiting delegates the post-war progress of the country. He highlighted that Sri Lanka has witnessed unprecedented growth in the past few years and expressed confidence that the growth rate will continue as the stage for that momentum has been set. Stating that massive infrastructure development is one key area the country is focusing on, he said: “We have not left out the macro-fundamental elements. The platform is available. It’s just that it has to be protected and enhanced,” noted Cabraal. He added thatSri Lanka has been the fastest growing economy in the past four years with the Government investing US$ 3 billion on infrastructure within that period. “This amount is equivalent to constructing 15 Colombo-Katunayake Expressways. However, we chose to build and uplift the provinces that were behind,” shared Cabraal. Stating that the country welcomes new businesses, he called for foreign financial institutions to support the tourism industry and the five hub concept which Sri Lanka is promoting aggressively. - Pix by Upul Abayasekara