An international meeting on Islamic Finance held in Malta examined the main advantages of the country acting as a centre for Islamic Finance in the Mediterranean. Participants agreed that Malta was strategically well positioned to act as the “Bahrain in the Mediterranean” from where Islamic Finance Institutions can reach and penetrate the markets of the European Union and North Africa.
The event, held earlier this month at the Radisson Blu in St Julian’s, was organised by the Malta Institute of Management in collaboration with the Malta Union of Bank Employees and the Malta Employers Association. It was made possible through the co-funding of the European Union funding programme Grundtvig and the collaboration of Bank of Valletta, Path Solutions, Newtech of Demajo Group and Erremme Business Advisers.
The five-day event, based on daily workshops, attracted world renowned speakers such as Dr Mohammed Nedal Alchaar, Dr Hussein Hamid Hassan, Prof. Abdulla Al Shami, Reuben Buttigieg, Nazmi Camalzaman and Oliver Agha. The delegates were from the European Union including Italy, Luxembourg, Latvia, the United Kingdom, Turkey, Malta and Slovenia, and elsewhere.
During the workshops various structures were considered particularly vis-à-vis Italy, Malta and Spain. The Malta formula was seen as a potential vehicle to assist Muslim communities and investors in these countries to have the alternative financing they require. The opportunity of Borzamed as a Mediterranean platform for Islamic capital markets was also discussed.
The legislation of Malta was analysed and various views were discussed on what can be done through Malta. It was felt that the main issues are tax-related and not legislative issues as the perception in some quarters may be. Examples were mentioned, among them that of the Valletta Investment Bank, which has products that, in essence, can be identified with Islamic project financing. Middlesea Insurance and APS Bank were also constantly brought forward as being organisations that in the past had some sort of activities that were similar to financing. It was argued that Malta is not new at all to certain type of transactions. What happened was that Malta’s tax laws have rendered such transactions unfeasible.
The robustness of Islamic finance was also analysed. It was concurred that had Islamic Finance been predominant in the world, the Financial Crisis would probably not have happened. The recession was felt also by Islamic finance since, for example, it also affected the property market. However, the crisis has shown that this alternative method of finance is definitely sound possibly much more than conventional finance.
Given the success of the event, the Malta Institute of Management was invited to organise similar events in Italy and in Spain.