Algeria can achieve real development through Islamic finance: expert

The development of Islamic finance industry in Algeria passes through a clear political desire to go forward in diversifying financial products and solutions, according to vice- president of the International Islamic University of Malaysia.

Western studies show that non-Muslims tend the most to this industry. “A total of 55 percent of Islamic banks’ clients are non-Muslims. This is due to its varied and several privileges,” Younes Salhi told Echorouk.

He believes that the Algerian government should study successful examples in this field including the Malaysian and Bahraini experiences. “This would enable the Algerian economy to benefit from very important resources to achieve a real economic growth in the gross domestic product, increase social integration opportunities, creating real jobs and wealth.”

He also stressed the necessity of not neglecting any relating activity including Islamic cheques which constitute a very efficient means to fund infrastructure projects and economy.

The economy expert said the Islamic finance is not a threat to the traditional finance. “It is a complementary product which enables to satisfy the aspiration of large categories in society.

“The Islamic economy deals with real goods and not unreal ones. The Islamic finance is the most successful way to fund young people’s projects and contribute in their integration in an efficient and sustainable way in the economic life.”

“It is time to start building a real economy,” he added.

Professor Salhi said Islamic finance in Malaysia is bases on three main pillars: Islamic banks, Takaful companies, successful Halal industry and Hadj Fund.

He added that the second main step which cntribvuted in the Islamic finance industry success is the existence of a legal frame.

Civil courts are reinforced with competent judges to decided in Islamic financial cases.

In 1983, the government set up the first law followed by the law on Islamic insurance companies in 1948 and then the amendment of the commercial law.

The Algerian expert warned against the consequences of not having control over the high liquidity in the Algerian banks. “That liquidity may be a victim of inflation. The Bank of Algeria should protect the purchasing power of Algeria’s high monetary reserves.”

source : ecoroukonline