TRADE AND FINANCE AUSTRALIA


Developments in Islamic finance in Australia


has made it an attractive segment in its credit market diversification commitment, but it is not just the resilience − Australia has many more reasons to be onboard. Australia is an all-welcoming multicultural society with strengthening ties to the Muslim world and a growing local Muslim population. There are currently more than 365,000 Muslims in Australia, which is more than the combined Muslim population of Hong Kong and Japan. More importantly, Australia intends


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to be a global financial centre in the region where more than 60 per cent of the world’s Muslim population resides and where the demand for Islamic finance is on the rise. This together with Australia’s political stability, sizeable domestic economy, advanced supportive infrastructure and a globally recognised developed financial system adds to its chances of becoming a successful hub for Islamic finance in the region. The government, industry and


academia have joined hands to make it a success. The Australian Trade Commission (Austrade) has launched an introductory publication on Islamic finance to raise public awareness about it. IFSA, the Investment and Financial Services Association, through its Islamic Finance working group and FINSIA, the Financial Services Institute of Australia, have also been promoting awareness of Islamic finance and assisting industry in developing and marketing Islamic funds within and outside Australia. Another significant development has


been the launch of several Australian Islamic funds over the last 12 months, targeting mostly Muslim investors in


ustralia is taking serious steps to welcome Islamic finance. Its resilience during the Global Financial Crisis


Australia, the Middle East and South- East Asia. Given that the demand for


professionals trained in the area of Islamic finance is increasing globally and this area is becoming more important to the Australian local market, La Trobe University has introduced a Masters in Islamic Banking and Finance (1–1.5 year degree). This can also be done in combination with Masters of Financial Analysis (2–2.5 year degree).


Treasurer, the Senator The Honourable Nick Sherry, announced a number of proposed reforms to this end. The Austrade publication on Islamic


finance lists the sort of opportunities available in Australia including a full- fledged Islamic bank and Islamic windows, multidimensional Shariah- complaint investment in and by Australia, the establishment and management of Shariah-compliant funds, local exchanges providing an


“Australia understands the fact that the current supportive infrastructure best suits a system based on ‘debt management’ and Islamic finance shifts the focus to ‘asset management’, which might warrant some changes”


Australia understands the fact that


the current supportive infrastructure best suits a system based on ‘debt management’ and Islamic finance shifts the focus to ‘asset management’, which might warrant some changes. Efforts are under way to introduce tax reforms, and legislative and regulatory changes to provide a level playing field for all institutions, conventional and Islamic, targeting neutrality. On recommendation of the Johnson Report, Australia’s recent Ministerial Trade delegation to the Middle East in April 2010 led by the Federal Assistant


Islamic listings platform for domestic and international issuers of Shariah- compliant instruments, and a range of other financial, professional and educational services. There are also plenty of opportunities for Islamic finance instruments (such as Sukuk, Mudarabah, Murabahah and Ijarah) on the wholesale side, particularly in agribusiness, mineral resources, oil and gas, infrastructure and property. p


Dr Hayat Khan Lecturer, School of Economics and Finance, La Trobe University


AUSTRALIA AND THE ARAB COUNTRIES | 2010 61


Photo by: Michelle Ward


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