Keynote Adrress For The Virtual Signing Ceremony Between The Government of Malaysia and The Islamic Development Bank of The Instruments For The IsDB Center of Excellence in Kuala Lumpur

KEYNOTE ADDRESS BY

H.E. SENATOR TENGKU DATUK SERI UTAMA ZAFRUL TENGKU ABDUL AZIZ
MINISTER OF FINANCE, MALAYSIA

FOR THE VIRTUAL SIGNING CEREMONY BETWEEN THE GOVERNMENT OF MALAYSIA AND THE ISLAMIC DEVELOPMENT BANK OF THE INSTRUMENTS FOR THE IsDB CENTER OF EXCELLENCE IN KUALA LUMPUR

25 MARCH 2021 (THURSDAY)
1:35 PM – 1:45 PM

PUTRAJAYA

Bismillahirrahmanirrahim

Assalamualaikum Warahmatullahi Wabarakatuh.

His Excellency Dr. Bandar Hajjar
President, Islamic Development Bank

YBhg. Dato’ Asri Hamidon
Secretary General of Treasury, Malaysia
who is also the Alternate Governor of Malaysia

Excellencies Governors of the IsDB

Representatives from the Islamic Development Bank Group

Representatives of Government Agencies

Distinguished Guests

Ladies and Gentlemen.

INTRODUCTION

1. A very warm welcome to all who have joined us from across the globe virtually today. I am grateful to Allah Subhanahu Wa Ta’ala for the opportunity to be part of this historical official signing ceremony of the Memorandum of Understanding as well as Supplementary Agreement between the Government of Malaysia and the Islamic Development Bank.

2. I would like to thank all those involved for their hard work in making this a reality and for organising this virtual signing ceremony today. Ideally, this ceremony would have taken place physically and we would have had the opportunity to meet face to face. However, the world had to adjust very quickly to the challenges that came upon it in light of the COVID-19 pandemic.

3. Your Excellency President Dr. Bandar Hajjar, I would also like to congratulate Your Excellency on the President’s Five-Year Programme (P5P)^1 2, encapsulating the vision to transform IsDB to reflect the evolving needs of Member Countries³.

4. I commend the IsDB Group’s response to the COVID-19 crisis by approving USD2.3 billion for the IsDB Strategic Preparedness and Response Package to prevent, contain, mitigate and recover from the impact of the pandemic, through a 3R⁴ approach i.e., Respond, Restore and Restart.⁵ We thank the Bank for the offer to support Malaysia’s recovery through initiatives and tools under this programme.

MALAYSIA AND IsDB: A HISTORICAL JOURNEY

Ladies and Gentlemen,

5. Malaysia and the IsDB share a long history. As one of the founding members of the IsDB, Alhamdulillah, we have had a mutually supportive and healthy partnership with the Bank since the 1970s.

6. Malaysia remains committed to working closely with the Bank in the development of the country’s economy towards achieving inclusive and sustainable development. We are proud of this cooperation and hope to build further on this commitment between both parties.

7. IsDB’s presence in Malaysia began in May 1994, when the Government of Malaysia and the IsDB inked an Agreement to set up the IsDB Regional Office in Kuala Lumpur (or ROKL). The ROKL facilitates operations and management of the IsDB portfolio, and is also IsDB’s operating office for delivery of programmes and activities in the region.

8. Official operations of the Bank in Kuala Lumpur began in September 1995, which means it has been here for almost 26 years. Over the last decade, our cooperation has strengthened through several initiatives, including the Member Country Partnership Strategy framework as well as the Memorandum of Understanding Concerning Cooperation in Islamic Finance, Reverse Linkage, Resource Mobilisation and Halal Industry.

9. Among the notable successes through ROKL are:

1. Firstly, the Malaysian Agriculture Research and Development Institute (MARDI) Corporation’s collaboration with the Bank in building the capacity of rice production in Suriname and Guyana;
   
   
2. Secondly, supporting the joint publication by the Ministers of Religious Affairs of Malaysia, Brunei, Indonesia and Singapore, or MABIMS, entitled ‘MABIMS Harmonisation of Halal Standards: Strengthening the Halal Industry,⁶ which identified commonalities of Halal Standards among the four countries; and
   
   
3. Thirdly, MATRADE’s collaboration with the Ministry of Finance and the Bank in publishing a comprehensive directory, known as Mapping Malaysia’s Resource Centres (MMRC⁷), which lists information on Malaysian Organisations comprising Government agencies, private institutions and companies, that are able to provide capacity development solutions to IsDB member countries.

TRANSFORMATION OF ROKL INTO A CENTER OF EXCELLENCE

10. Prior to this, we had focused on four pillars of cooperation, namely Islamic Finance; Halal Industry; Reverse Linkage; and Resource Mobilisation. The transformation of the ROKL into a Center of Excellence sees the addition of the Science, Technology and Innovation pillar as well as a more comprehensive Halal pillar, which now involves Halal Initiatives and Eco-System. This marks a new chapter in our relationship with the IsDB, allowing us to further strengthen our strategic partnership for development. It is our mutual vision for the CoE to be a gateway between Malaysia and Member Countries in exchanging information, particularly in these five identified areas.

11. I would like to take this opportunity to express my appreciation to the IsDB Team for the work put in to transform the ROKL into the Islamic Development Bank Center of Excellence. Today, we witness the culmination of our efforts with this signing ceremony.

MALAYSIA AND THE CENTER OF EXCELLENCE: EXPECTATIONS & COMMITMENTS

Ladies and Gentlemen,

12. My hope is that CoE will mutually benefit Malaysia, IsDB and other Member Countries. I am confident that the Bank’s local presence combined with its international experience and expertise, will bring about countless benefits to all Member Countries.

13. On our part, we are humbly aware that Malaysia is a reference for many IsDB Member Countries and non-Member Countries. Malaysia’s development experience, economic diversification and transformation from a low-income to upper middle-income society have piqued the interest of a number of developing Member Countries. The CoE can play a critical role in facilitating the exchange of value between Malaysia and other Member Countries, particularly in the five identified areas.

14. Allow me to touch a bit on some of these key areas:

1. Firstly, on Islamic Finance - Core Islamic principles that promote inclusivity, equity, property rights and ethics are very much in-line with the United Nations’ Sustainable Development Goals 2030 and can be emulated by many. Malaysia’s Islamic Finance has transitioned from relative obscurity to being on par with conventional finance and is well-recognised internationally. According to the Malaysia International Islamic Finance Centre, Malaysia is leading globally with the largest Sukuk market in 2020, in addition to being acknowledged as the biggest market in Islamic Finance within the region by Moody’s. With our deep experience, we look forward to share our knowledge and experience with Member Countries, and vice versa, with the CoE playing a key role in this area. I also understand that the CoE is in the midst of working on a concept note on Green Sukuk Facility, and I look forward to see this concept note;
   
   
2. Secondly, Halal Initiatives and Eco-System - Under Malaysia’s Shared Prosperity Vision 2030 (SPV2030), it was highlighted that the Halal market is worth 3 trillion US Dollars. The Halal industry covers not only food-related products, but also pharmaceuticals, cosmetics, self-care and health items, as well as sectors such as travel, media and recreation, amongst others. On this, we look forward to working together with Member Countries through the CoE to develop and promote the Halal industry; and
   
   
3. Lastly, on Science, Technology and Innovation (STI) - I am aware that STI is at the heart of the IsDB growth strategy and a lot has been invested in this sector, as proven by the Engage Platform and Transform Fund programmes. The addition of the STI pillar is very much welcomed by our Ministries and Agencies as it is in line with the National Policy on Science, Technology and Innovation (2021-2031), the Malaysian Science, Technology, Innovation and Economy Framework, the Government’s agenda through the Digital Economy Council and the Fourth Industrial Revolution as well as the Islamic Digital Economy Mi’yar initiative. Its timely addition is in tandem with the national initiative to have STI as a foundation towards developing new and sustainable technology to meet the people’s needs as well as in addressing global issues, including health and climate change. It is reflective of IsDB’s confidence in Malaysia’s capabilities in the area of STI, particularly in local start up industries and venture capitals. Recently, Malaysia has emerged as one of the world’s leading Islamic financial technology hubs that houses various Islamic fintech start- ups. This cooperation will also facilitate the sharing of expertise and experience among member countries in line with the CoE’s new pillar and also the United Nations’ SDGs.

CONCLUSION: THE JOURNEY AHEAD

Ladies and Gentlemen,

15. The COVID-19 pandemic has been global, and pervasively disruptive, sparing no sectors. It has impacted and altered the norms of all business sectors. It has also forced a rethink on how we do business, as well as how we manage fiscal and economic policies to balance saving lives and livelihoods, while also trying to achieve national development goals. Malaysia eagerly looks forward to drawing on the Bank’s global knowledge and expertise to help Malaysia brave the COVID-19 storm, and get back on track towards being a high-income country.

16. The intensity and speed of change triggered by the pandemic have challenged us to rethink and restrategise on building a more resilient economy that is able to effectively respond to the new norm and future global changes.

17. In this regard, the CoE has materialised at an opportune time to deliberate on COVID-induced global volatility and craft appropriate policy options to manage an uncertain future, while consciously shaping a more sustainable and inclusive development for the country. While this is a challenging endeavour, I am confident that together, we will be able to rise up to the challenge.

18. Malaysia looks forward to working closely and collaborating with the IsDB on this front. The participation of the respective Ministries and Agencies throughout this journey bears testimony to our commitment.

19. As I have mentioned, we are at an unprecedented point in global history. We can respond by endlessly analysing the negatives, or by seizing the opportunities to create a more stable and better tomorrow. Therefore, I would like to encourage those with us today to engage and participate actively in the programmes that will be organised by the CoE. Let’s work together to achieve concrete outcomes through the CoE, and to benefit the ummah as whole.

20. Last but not least, my appreciation to the officials from the IsDB and the respective Malaysian Government Agencies for their tireless efforts in successfully transforming the Regional Office of Kuala Lumpur into a Center of Excellence.

21. Thank you. WabillahiTaufik Walhidayah Wassalamualaikum Warahmatullahi Wabarakatuh.

² Launched in the last quarter of 2017

⁴ Respond, Restore, Restart