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international financial transactions is one potential solution for fostering more integrated
Islamic markets.
Major obstacles for creating more integrated markets are cross-border differences in markets
and regulations. For example, differences in taxation, accounting standards, disclosure
requirements, and other regulatory discrepancies make it difficult to establish standardized
international markets. Consequently, a main goal in developing more integrated markets is to
encourage consistent regulatory policies across international borders. International
cooperation in developing uniform international standards and regulations with regards to
Islamic financial products will allow the international Islamic financial markets and
institutions to become more prominent and efficient.
As countries strive to achieve the goals of providing more robust international Islamic financial
markets and regulatory standards, the development of regional working groups can play a key
role. Economies often develop important trade relationships with other counties in the region,
such as the European Union and ASEAN region. These countries often share common legal,
regulatory, and economic systems, and, therefore, develop important trade relationships. From
an Islamic finance perspective, establishing regional working groups along these lines can help
to integrate financial markets and grow the Islamic finance industry. By working together to
standardize financial products and regulations, these regions can help to foster more
integrated and efficient international markets for Islamic financial products. In addition,
regional working groups can also work together to share knowledge and develop industry best
practices with regards to Islamic financial institutions. This type of cooperation can help foster
efficiency and growth of the Islamic finance industries among the member countries.
Finally, a major goal of the international Islamic finance community is to encourage access to
and the growth of new markets for Islamic financial products. Developing integrated markets
for Islamic products, standardizing international regulations, and establishing cross-border
working groups all help to integrate the market for Islamic financial products and promote
new market growth. Integrated, standardized markets allow for smaller, less-developed
countries to gain access to the international marketplace. As a result, the international
community of Islamic finance can help encourage the growth of Islamic finance in emerging
markets, which can help to promote emerging market economic growth and alleviate poverty.
6.9.7 Enhance the Role of Islamic Finance in Promoting Economic Growth31
Islamic finance can also play an important role in promoting international economic growth. In
many countries throughout the world, there is a need for vital infrastructure projects, such as
roads, transportation, and power, and project finance is often a major obstacle to their
completion. Islamic finance may provide an opportunity for emerging economies to finance
these crucial infrastructure projects. For example, a sukūk type security could be issued such
that the returns are linked to the infrastructure project’s returns. Additionally, these securities
could be established with a long time dimension and be issued in small denominations, which
31 Islamic Research and Training Institute (2014): Islamic Financial Services Industry
Development: Ten Year Framework and Strategies, A Mid-Term Review