| Lyna Mohamad |
THE International Monetary Fund (IMF) recently updated its World Economic Outlook, with emerging and developing countries continuing to drive global growth, yet projections for developed economies remain uneven.
Brunei Darussalam outlined its national vision ‘Wawasan Brunei 2035’ which identifies various key clusters of economic drivers including the financial services sector.
“We would like to see its contribution to Gross Domestic Product (GDP) climb to eight per cent from 2.8 per cent in 2008. The biggest areas of potential are capital markets and insurance industries, where currently, their combined market share in terms of asset size is about six per cent of the financial services sector.”
This was underscored by the Minister of Development, Pehin Orang Kaya Indera Pahlawan Dato Seri Setia Awg Hj Suyoi bin Hj Osman, in his capacity as the Deputy Chairman of Autoriti Monetari Brunei Darussalam (AMBD), in his opening address at the 10th annual Brunei Darussalam Roundtable 2014, which he attended as the guest of honour.
AMBD, in achieving these goals will continue to play a vital role through its developmental, regulatory and supervisory functions and will continue to work closely with the industry to provide a conducive environment and infrastructures for the sector to grow.
“Nevertheless, it is also important that AMBD should implement smart regulatory frameworks and to ensure that markets remain sound and stable,” he added.
The minister further noted that AMBD actively supports the growth of Islamic finance to uphold His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam’s aspirations for the country to become a premier Islamic financial centre.
Islamic finance proved its resilience during the financial crisis and continues to be an attractive market segment where last year, global Islamic financial assets more than doubled to US$1.8 trillion from 20 years ago. Islamic finance is indeed a niche that Brunei can leverage on, he added.
Meanwhile, one study estimated that by the year 2020, the market share of Islamic banking and finance in the Sultanate will grow to at least 50 per cent of the total financial sector.
He further added that Islamic banking has been growing alongside the Takaful industry with market shares of 47 per cent and 32 per cent as of the second quarter of 2014 respectively.
In evolving into the next phase of growth, it is imperative that developments in other parts of Islamic finance are seen, particularly in capital markets and this can only be achieved with the commitment and cooperation of all stakeholders.
“Our goals of advancing the financial service industry and aspirations in Islamic finance will require the right pool of a skilled and qualified workforce. Hence, there must be an emphasis on human capital development and talent mobility, which will benefit the financial services sector through greater productivity and higher value creation.”
In conjunction with the 10th anniversary of the roundtable, the minister also pointed out that it is timely to retrace the steps taken and journey experienced over the past decade.
He also called on the Centre for Islamic Banking Finance and Management in its role as a centre of learning for industry players to complement local higher educational institutions, which can generate future leaders and experts. He stressed the importance of financial literacy among the general population of Brunei.
“By fostering a financially literate society which is able to make better-informed financial and investment decisions, we will be one step closer in achieving our vision,” he concluded.