Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on December 12, 2018

KUALA LUMPUR: Placing Lembaga Tabung Haji under the supervision of Bank Negara Malaysia (BNM) is crucial to help the pilgrims fund refocus on its intended purpose of its establishment, said PKR president Datuk Seri Anwar Ibrahim.

Anwar, who is also the member of parliament for Port Dickson, said there needs to be a higher level of supervision to keep troubled Tabung Haji in check.

He noted that Tabung Haji is a classic example of an institution being used by irresponsible personnel for political or personal interests.

“Tabung Haji is an example of how damage has been inflicted and trust betrayed. It is not the fault of the institution, nor investors, but the management that misused power to rob the people, and action should be taken against them,” he told reporters on the sidelines of the Fourth Annual Symposium on Islamic Finance organised by the World Bank, the International Centre for Education in Islamic Finance and the Islamic Research and Training Institute yesterday.

From January, Tabung Haji will be put under the supervision of the central bank to win back the trust of depositors.

On Monday, Minister in the Prime Minister’s Department Datuk Seri Dr Mujahid Yusof Rawa said weak governance under the pilgrims fund’s previous management had violated the trust of the people.

Currently, BNM does not have any regulatory oversight of Tabung Haji as the fund is governed under the Tabung Haji Act 1995.

Earlier in his keynote address, Anwar hit out at Islamic finance practitioners for failing to position the industry as a viable alternative to conventional finance, especially during the 2008 global financial crisis.

“During all these years, Islamic economics and Islamic financial institutions have been developing [by] proclaiming themselves [as] an alternative to naked capitalism. So why when the Western economies were most definitely at [the] breaking point, did no one — not even such an illustrious gathering as this — think Islamic economics and finance really were the alternative?” he asked.

Anwar said the industry is lacking in intellectual cutting edge that presents a way forward based on distinctive and different principles.

“There is no pragmatic policy, no overarching vision, definitely no actual institutional formation and economic or financial practice, [and] no different financial instruments to step into the breech and lead the global economy out of its misery,” Anwar added.

In the face of rising global inequality, Anwar further elaborated that the Islamic finance industry had nothing more to offer but the general idea of distributive justice.

“There are no distinctive policies, no empirically grounded programmes that we can turn to or recommend as Islamic solutions for the alleviation of poverty and the eradication of hunger. These are the defining issues of our times, and our way of thinking grounded in enduring moral precepts has nothing practical and pragmatic to offer to decision makers,” he said.

Hence, Anwar called on Islamic finance practitioners to re-examine their purpose as financial institutions to be aligned with the Maqasid Syariah, or objectives of syariah, whereby it promotes contextual and circumstantial policies suited to the changing dynamics of society.

“After decades of [a] false start, it is time for practitioners of Islamic economics and finance to answer the needs of society.

“It is time to apply yourself to find pragmatic policy and programmes that are worthwhile models of our moral vision, and offer the prospect of answering the needs for a more just and equitable social order, not hypothetically, not abstractly, but in hard-earned ringgit and sen as negotiable and translatable currency that can be used by everyone,” he added.

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