Anwar’s announcement of significant investments and reforms is poised to promote economic growth and ensure long-term sustainability
BY ZAFIRAH ZAFRUDDIN 
Prime Minister Datuk Seri Anwar Ibrahim, a key advocate for Islamic finance, underlined its importance in promoting economic growth and financial inclusion at the recent Global Forum on Islamic Economics and Finance (GFIEF).
In his keynote speech, he announced several initiatives to promote Shariah-compliant investments, enhance social finance, and innovate Islamic finance.
MAJOR INVESTMENT THROUGH DANA PEMACU
The Retirement Fund Incorporated (KWAP) will allocate up to RM3 billion to Shariah-compliant investments. This investment aims to support high-growth local companies and boost the venture investment ecosystem.
Anwar explained that this will be accomplished through ‘Dana Pemacu’, a private equity investment strategy that aims to accelerate the growth of high-potential local companies.
This initiative will focus on vital sectors essential to Malaysia’s economic development. These sectors may include food security, education, silver economy and healthcare, digital economy, financial inclusion, and energy transition.
Dana Pemacu will also focus on other areas with significant social or environmental impacts. Most importantly, this investment plan aligns with the MADANI Economy framework a comprehensive approach emphasising responsible investment practices and sustainable development.
It suggested that Dana Pemacu’s capacity to build a sustainable economy would be maximised if it followed the MADANI Economy framework.
MALAYSIA’S FIRST SOCIAL EXCHANGE
In related news, the Securities Commission (SC) plans to establish Malaysia’s first Social Exchange (SE).
The SE will serve as a hub where private investors can fund projects with positive social impacts. Non-governmental organisations (NGOs), social enterprises, and state Islamic religious councils will be the primary beneficiaries of this innovative funding mechanism.
The SC will establish and enforce standards and regulations to oversee the SE’s management and operation. These measures guarantee high transparency, accountability, and efficiency in using funds.
Establishing the SE and other initiatives underscores the government’s unwavering commitment to a holistic development approach. This strategy should reassure the audience about the comprehensive nature of Malaysia’s nation-building efforts.
INNOVATING SUKUK
Malaysia is discussing adding innovation and advanced features to its sukuk issuance. This move is expected to enhance Malaysia’s global Islamic finance industry competitiveness.
Sukuk’, also known as Islamic bonds, are essential in Islamic finance. They adhere to Shariah and serve as an alternative to conventional bonds, playing a crucial role in the industry’s financial ecosystem.
Anwar also underlined Malaysia’s determination to innovate sukuk structures to address requirements and challenges associated with climate and energy transition.
Developments will be made to ensure
compliance with Islamic finance principles while also integrating modern financial solutions.
By aligning Islamic finance with global sustainability goals, Malaysia has the potential to solidify further its reputation as a forward-thinking financial hub. This prospect should instil a sense of pride and confidence in the country’s financial sector among the audience.
And with that, the government hopes to complete the development and structuring of this new sukuk by next year.
“We plan to finalise this sukuk by 2025 as we work to complete all required arrangements and preparations,” said Anwar.
The new sukuk structures will be designed to fund projects related to climate change and the transition towards renewable energy sources.
That said, sukuk could be utilised to finance green projects. For instance, installations of renewable energy, enhancements in energy efficiency, or other environmentally sustainable projects.
Malaysia seeks to differentiate its sukuk offering from other markets by incorporating cutting-edge technology and unique structures.
DEVELOPING EXPERTISE
Malaysia plans to spearhead a global Islamic economics expert development programme.
Anwar stressed cultivating regional expertise. The goal is to produce professionals who are well-educated and knowledgeable. In addition, they should be innovative and capable of addressing contemporary global issues.
According to Anwar, the multi-track programme could provide participants with professional development opportunities. This would include leadership training, real-world research, and working internships.
These opportunities will ensure participants gain both theoretical knowledge and practical experience. Being well-equipped with both will allow them to tackle challenges effectively.
By leading this initiative, Malaysia demonstrates its ambition to be at the forefront of Islamic finance. This commitment to innovation in the field sets a strong example for other countries to follow suit.
MALAYSIA’S COMMITMENT
The Global Forum on Islamic Economics and Finance (GFIEF), a two-day event organised by Bank Negara Malaysia alongside the SC and other organisations, serves as a crucial platform for global leaders, policymakers, and industry experts to discuss and shape the future of Islamic finance.
Under the theme of ‘Shaping a Resilient Global Islamic Economy Through Value-based Reforms’, GFIEF brought together key international figures. They exchanged ideas on using Islamic economics to promote equity and prosperity among everyone.
Malaysia’s commitment to leading advances in Islamic finance is evident through various initiatives unveiled at the event. These involved an RM3 billion investment through Dana Pemacu, the proposal to establish the SE, innovations in Malaysia’s sukuk issuance, and an emphasis on professional training.
Through these initiatives, Malaysia is setting itself up for long-term industrial success.
