KUALA LUMPUR: Malaysia and Singapore, the key drivers of Islamic financing in Asean countries, have to hammer out a framework of cooperation to focus on their individual niches, said a PricewaterhouseCoopers (PwC) official.
PwC partner and global Islamic finance leader Mohammad Faiz Azmi said yesterday the two countries had to identify their strengths in championing a particular field in Islamic financing in order to avoid an overlap in specialisation between them and also with other Asean nations, including Indonesia.
"We need to get Asean to understand that the sum-of-parts is more powerful than the individual parts, and that we need to conserve our resources by focusing on each country accordingly," he said.
Faiz was speaking to reporters in conjunction with the launch of the third edition of PwC's Islamic finance publication entitled Gateway to Asia: Malaysia, international Islamic finance hub.
He said while some Asean countries, particularly Malaysia, Indonesia and Singapore, aspired to become Islamic banking centres, it was a matter of whether a country had the resources and passion to achieve this goal or not.
Using Malaysia and Singapore as an example, he said: "So, if Singapore wants to continue its mantra of being the wealth management centre of Asia, so be it. But certainly, if we want to become the sukuk (Islamic bond) hub of Asia, we need Singapore to agree and put their resources together in our direction."
Meanwhile, Malaysia has to become the preferred destination among decision-makers in financial institutions to help drive more investments into the country in its own quest to emerge as an Islamic finance hub, said Faiz.
He described these decision - makers as advisers to the upper echelons of financial institutions.
Another concern that could blunt the growth of islamic finance in the region is trading in Asean currencies.
Faiz said at some point, investors will look to convert their investments into a currency that they are comfortable with, such as the US dollars, from the various currencies in the region.
The issue of whether Asean banks have the capacity to convert these investments into US dollars then arises, he added.