From east to west everyone wants a slice of Turkey. Last week at the same time the country was hosting a UK business delegation led by business secretary Vince Cable, Malaysia's Islamic finance big guns were in Ankara and Istanbul setting out on "the new silk route in Islamic finance". (source)
The Islamic finance onslaught comes after much diplomatic handshaking at the highest level earlier this year when both countries announced the lifting of travel visas and the two prime ministers agreed that a free trade agreement should be signed by the end of 2011.
Malaysia wants to export its Islamic finance expertise and experience, while at the same time opening up its own markets to investment from emerging players like Turkey. Right now the Malaysia-Turkey détente looks like a win-win situation.
Speaking in Turkey, Bank Negara Malaysia's deputy governor, Muhammad Ibrahim laid out a roadmap with five waypoints to building closer economic, social and strategic ties between Turkey and Malaysia.
get into Turkey's markets is Islamic finance and it's hoped that this cross-pollination will enhance the already $1.35bn worth of bilateral trade the two countries do.
Some of the tools he outlined were cross-border Sukuk issuances, the development of collaborative Islamic fund management products, and Malaysian investment in innovation, and research in Turkey.
The world's most "comprehensive and tested [Sukuk] infrastructure," said Ibrahim, could be used by Turkey to raise funds for large infrastructure projects such as the building of the Bosphorus shipping canal, while the depth of Islamic funds in Malaysia should interest the Turkish banks as Malaysia offers diversification opportunities with high prospects for the development and distribution of Shari'ah compliant funds across borders.
On other fronts ISRA was offered up as a Shari'ah research collaborator while INCEIF was put forward as a training and education partner.
Some Malaysian Islamic banking industry players have said that this is the beginning of Malaysia exporting its national and institutional Islamic finance experience, with one saying that the Malaysian model is not just about the domestic Malaysian market any more, and the industry collectively has enough expertise and experience to help develop the needs of new and untapped emerging markets.
