JAKARTA — Indonesian President Susilo Bambang Yudhoyono called Monday, March 2, for launching a support fund to help emerging Islamic economies and accelerate development in Muslim countries.
"By establishing that Muslim Fund, we make our call for a "Global Expenditure Support Fund" so much more reasonable and acceptable," Yudhoyono told the opening of the 5th World Islamic Economic Forum (WIEF), reported Xinhua news agency.
He said the fund will provide regular development assistance and budget financing to emerging Islamic economies to help achieve their development goals.
Jakarta plans to submit the proposal to the next G-20 summit in London in April, said the Indonesian leader.
Themed "Food and Energy Security and Stemming the Tide of Global Financial Crisis", WIFE is a global conference that acts as an international business platform.
It brings together hundreds of delegates from around the whole world to bolster economic cooperation.
"This forum is aimed at increasing cooperation and understanding between participants," said WIEF committee chairman and State Minister for State Enterprises Sofyan Djalil.
Islamic Banking
Yudhoyono urged Muslim countries to forge closer ties to tackle the challenge posed by the global financial downturn.
He said oil-exporting Muslim countries should channel more investments in the agriculture sector in developing countries to help cushion the economic blow.
"Muslim countries with vast reserves but without a real agricultural sector can come to the rescue," he said.
"And since they are food importers, they will also be securing their own food supply needs."
A financial firestorm swept the US and the world in September after the demise of Lehman Brothers, one of the US's Wall Street giants.
Since this, it has knocked down many major companies worldwide, causing mounting job losses, falling household wealth and forcing consumers to hold back on spending.
The Indonesian leader called for the Islamic banking to take the front seat in tackling the financial downturn.
"Islamic banking should take a front seat because it has not been affected by the crisis," he said.
Islamic banking has been relatively unscathed by the credit crunch.
Shari`ah-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.
Islamic banks and finance institutions cannot receive or provide funds for anything involving alcohol, gambling, pornography, tobacco, weapons or pork.
"The latest global crisis has taught us that an economic (system) which is based on unreal transactions will be easily ruined," Vice President Jusuf Kalla told reporters.
"We all know that Muslim countries with an Islamic economic system during this current (crisis) situation are relatively unaffected by serious problems."
The Islamic banking industry, which began almost three decades ago, has made substantial growth and attracted the attention of investors and bankers across the world.
Currently, there are nearly 300 Islamic banks and financial institutions worldwide whose assets are predicted to grow to $1 trillion by 2013.