How can Malaysia shape the Islamic digital economy?
FIFTEEN of the 195 countries in the world follow Sharia Law in some shape or form.
Together, however, they command trillions of dollars in investment and trade and influence decisions across the globe.
And although this “economy” is still in its infancy, it’s growing rapidly with the help of digital tools and technologies — which creates a fantastic opportunity for Malaysia — a torch-bearer in the world of Islamic finance.
In an exclusive interview with Tech Wire Asia ahead of Malaysia Tech Week, Bank Negara Malaysia’s (Central Bank of Malaysia) Shariah Advisory Council (SAC) Chairman Mohd Daud Bakar shed light on the future of the Islamic digital economy and how Malaysia can gear up to play a big role in this exciting new world.
“Malaysia has been at the forefront of championing Islamic banking and finance for the last three decades. By the way, Malaysia is also in advance stage of building IT infrastructure.
“Thus, it is a natural call for Malaysia to once again take the leading role in driving Islamic digital economy as Malaysia has many in-house talents on both Shariah knowledge and IT and smart technology.
“We just need a special task force at the government level or perhaps a dedicated department at Malaysia Digital Economy Corporation (MDEC) to coordinate the infusion of Shariah knowledge on digital economy activities. Malaysia needs to play the role model function to make this happen in no time.”
Malaysia has a finger on the pulse of the Islamic digital economy
The Malaysian government has a dedicated agenda and budget for the digital economy because it plays a key role in building the nation’s GDP.
Through MDEC, the government is making significant efforts to embed Islamic digital economy in the grand design of the digital economy in the country.
MDEC has introduced the Islamic Digital Economy Guide (Mi’yar), a reference for startups, venture capital and supporting ecosystem players who wish to explore and understand its various components.
“I believe the establishment of this guide is the right step for the growth of Malaysia’s Islamic digital economy.
“What is needed in the near future is a bolder statement and narrative on Islamic digital economy as a new and standalone pillar to drive and perhaps its impact on the GDP of the nation.
“This will make all agencies and ministries in Malaysia aware of this new growth area and it is envisaged that this new push will generate a greater level of interest and coordination amongst all stakeholders.”
Opportunities and challenges for the Islamic digital economy
“The challenges are always vested with the mindset and the talent, or rather, the skillset.”
According to Daud, many segments, especially in the Islamic community, tend to undermine the powerful impact of a digital economy vis-a-vis a brick and mortar economy.
Some of them may even have doubt on the Shariah compliance aspect of the digital economy “which is quite unfortunate as technology has been neutral in the Shariah mindset all the way”.
As much as these pose the challenges, they also create new opportunities for many service providers.
“Surely, it will create a first mover advantage for any company that embraces the vision and has the skillset to champion this young but promising industry.”
As with many other new things in this world, the Islamic digital economy will definitely take time to get the traction and buy-in it needs, but once it has achieved critical mass with regards to awareness and support, it is expected to soar high.
Daud points out that government agencies and the private sector must work hand-in-hand to persevere and sustain the momentum.
“As a global Shariah scholar, I can only say that smart technology, which underlies the digital economy, will make Shariah compliance more visible, tangible and impactful. This is why the Islamic digital economy is expected to have a bright future.”
“The global Islamic market is full of potential and more needs to be done to educate the world of Malaysia’s potential in Islamic digital economy,” concluded Daud.