Kuwait's Investment Dar reaches deal with creditors

by Eman Goma

Kuwait's Investment Dar (TID) said on Monday it reached an agreement with its creditors and investors on a debt restructuring plan.

In November, the Islamic investment firm presented its creditors and investors with a proposal to restructure about 1 billion dinars ($3.51bn) of its debt.

The deal between Dar and its coordinating committee - which represents all creditors and investors - endorsed the proposed five-year restructuring plan, it said in a statement.

"The proposed plan is based on a restructuring of the existing financial arrangements with scheduled amortizations over a five year period," it said. Dar, which owns half of British luxury carmaker Aston Martin, defaulted on a $100 million Islamic debt issue last May - the first of its kind on a major, public Islamic instrument in the region - and has said it may sell some assets to meet its obligations.

"TID will satisfy its financial arrangements in full over the five year period. In addition, the proposed plan would provide TID's banks and investors with an enforceable security package," Dar said. In September, Kuwait's central bank appointed a temporary supervisor to monitor debt restructuring and the compilation of financial results at Dar.

Trading in Dar shares has been suspended since April 1, after the group failed to submit its 2008 financial records on time. Dar had said it was seeking to borrow up to $1 billion to refinance its debt. (Reuters)

Indonesia realizes promotion to Middle East still insufficient

Jakarta (ANTARA News) - Indonesia realizes that its promotion to the Middle East is still insufficient causing investment from the region remains low.

The country`s state enterprise minister, Sofyan Djalilm said here on Monday "we are still under-promoted in the Middle East so that only few investors from the region know the country while the potentials in our country are huge."

The minister said at a press conference on the 5th World Islamic Economic Forum that a Middle Eastern investor told him over a lunch that afternoon about his wife who asked what for when he told her he would leave for Indonesia, impressing that the country was still unknown.

However, Sofyan who is also a deputy chair of the meeting said the investor immediatelly called his wife upon arrival here to ask her to come to Jakara telling her that "shopping malls here are no less superior than those in the US or Europe."

So, they really did not know much about Jakarta, the minister said.

In view of that he hoped the holding of the World Islamic Economic Forum would make Middle Eastern investors know the country better and interested to invest in the country.

He said he also hoped the forum would lead to agreements as well as their implementation.

Another deputy chair of the meeting, Tanri Abeng, shared the minister`s view that Indonesia still insufficiently conducted promotion to the Middle East. In view that he said he planned to conduct better promotion efforts.

"At the end of the meeting on March 4 we would conduct an exhibition on Indonesia to promote the country`s potentials. Moreover more participants attended the meeting this time and more than half of them came from the Middle East. The number of attendees was larger than it was in Malaysia before," he said.

This means, he said, that Middle Eastern investors began to be interested in the country. "It has never happened before that the number of delegates reaching more than one thousand," he said.

He said now was the opportunity for Indonesia to attract foreign investors. "They used to look at the US and Europe because of their financial sector but now when the West is in crisis they turned to the East," he said.

He said investment in Eastern countries would not be the same as in the West. "In the Eastern countries it would go more to the real sector while in the West it would go the financial sector. This means an opportunity for us that have a huge pontential in the sector," he said.

The chairman of the South African Chambers of Commerce and Industry, Ibrahim E Patel, said the event was an important forum for investors to know more about Moslem countries.

"Here we would discuss substantial platforms stressing on partnership cooperation. We know that trade knows no state borders, politics, religions and races," he said.

Tourism project on Obhur gets royal nod

P.K. Abdul Ghafour, Arab News

JEDDAH: Custodian of the Two Holy Mosques King Abdullah has given instructions to transform the Obhur Corniche into a cultural and tourist center. Spread over 140,000 square meters, the site will be developed into a permanent center for festivities. It will also include a heritage village, an open stage and a site for fireworks.

Sami Nawar, head of tourism and culture at Jeddah municipality, said the site had previously been used to stage a major exhibition of mega-projects in Makkah province and was opened by King Abdullah last year.

“This site will be converted into a permanent center for festivals,” he said. “It will be similar to the King Abdul Aziz Cultural Center in Abrug Al-Righama. The only difference is that it will be located on the sea front, north of Golden Sands beach,” he pointed out.

Nawar said the municipality had already prepared preliminary designs for the multibillion-riyal project, which was presented to Prince Miteb, minister of municipal and rural affairs, when he visited the municipality recently.

“We’ll conduct further studies before finalizing the designs,” Nawar said, adding that tenders would be called within six months from engineering offices to study the project before awarding the project to a specialized company for implementation.

He said the site would be a window to the sea and would be away from traffic. “There is a proposal to establish an open-air auditorium that can accommodate 10,000 people.” The project will also include a closed-door theater and a gallery for people to watch marine sports and activities, he said.

“This area will become a permanent place for festivities and public recreation. It will also be used to hold public awareness programs in accordance with our culture and traditions,” he said. There will be a vast expanse of greenery where people can rest. A hotel will also be constructed in the area and its revenues will be used for maintaining the center.

Nawar refused to give the estimated cost of the project. However, he said it would be huge. He said the final designs would determine the area required for the project, including parking facilities. “We’ll allocate an area beside the sea for fireworks,” he said. The project would be carried out in several phases.

The Council of Ministers has already approved plans to carry out a number of new tourism projects on the Red Sea coast. According to statistics made public by officials of the Saudi Commission for Tourism and Antiquities, the new projects will attract SR150 billion in investment. They further estimated annual tourist spending at new Red Sea tourist resorts to be valued at SR9.9 billion.

The Red Sea projects will be established in Ras Humaid, Sharma, Qayyal and Dhaffat Al-Wajh in Tabuk province, Arrayes in Yanbu, Ras Muhaisen in Makkah province, Haridha in Asir and Farasan in Jizan.

The resorts will have a total of 557,000 rooms and create 413,000 jobs, including 165,000 direct jobs in the first five years, SCTA officials said.

Prince Sultan bin Salman, chairman of SCTA, has spoken about a long-term plan for tourism development on the Red Sea coast and islands -- which have a total coastline of 1,800 km. He also spoke about a government strategy to increase the tourism industry’s share in the country’s gross domestic product from six to 16 percent by 2020.

Kuwait Finance Malaysia gets $300 mln capital boost

KUALA LUMPUR, Feb 6 (Reuters) - Islamic bank Kuwait Finance House Malaysia said on Friday it has received a $300 million capital injection from its parent.

Kuwait Finance House (KFH) is one of the largest Islamic banks in the world. Headquartered in Kuwait, our business covers corporate, investment, commercial and retail banking. As part of our expansion programme, we are now in Malaysia with the opening of Kuwait Finance House (Malaysia) Berhad (KFHMB).

As one of the world’s largest Islamic banks, Kuwait Finance House specialises in Shariah compliant banking and investment products. Our businesses covers divisions such as Corporate and Investment, Commercial, as well as Retail banking.

Our quality of assets and financial strength have led to numerous awards including a prominent status as one the leading banks in the Gulf Cooperation Council (GCC) and an investment credit rating of 'A2' by Moody's Investors Service and 'A+' by Standard & Poors and Capital Intelligence.

With operations and affiliates in Bahrain, Turkey and the United Arab Emirates, Kuwait Finance House has now landed on Malaysian shores with an official opening by the Honourable Prime Minister YAB Dato' Seri Abdullah Bin Haji Ahmad Badawi on 17 February 2006.

As the first foreign Islamic bank to be licensed by the Ministry of Finance, Kuwait Finance House (Malaysia) Berhad aims to ensure and maintain close relationships with our customers by providing exceptional service that suits any specific need.

That leaves the bank, a subsidiary of Kuwait Finance House (KFIN.KW), Kuwait's biggest Islamic lender, with paid-up capital of $500 million.

"The strong liquidity and capital position enables us to look at and seriously evaluate various investment opportunities in Malaysia and within the region," K. Salman Younis, Kuwait Finance Malaysia Managing Director said in a statement.

(To read more Reuters stories on Islamic finance, click on [ID:nISLAMIC])

(Reporting by Liau Y-Sing; Editing by Neil Fullick)

Yemeni-Indonesian joint committee commences meetings

Sana'a (ANTARA News/Saba) - Yemeni- Indonesian Joint Committee started its second round`s meetings here on Tuesday.

The meetings of the round are co-chaired by Deputy Minister of Planning and International Cooperation Hisham Sharaf and Indonesian Ambassador in Yemen Nour al-Aulia`a.

In the meeting, Sharaf highlighted historical relations between Yemen and Indonesia, indicating wide horizons for improving them in the framework of realizing joint interests. He took into consideration economic and trade privileges.

He noted importance of President Ali Abdullah Saleh`s visit to Indonesia because it has formed improved step for activating relations between the two countries and enhancing suitable mechanisms for utilizing existing possibilities in the two countries.

For his part, the Indonesian ambassador affirmed his country`s keenness on improving relations with Yemen, taking into consideration that Indonesia there is a number of Yemeni migrants who had com to the country in the thirteen century for spreading Islam.

The second round discusses during two-day meetings evaluation of cooperation between the two parts in fields of economy, trade, higher education, investment and sports and youth.

A number treaties and protocols are expected to be signed during the round.

President says no need for investors to worry about security

Jakarta (ANTARA News) - President Susilo Bambang Yudhoyono guaranteed security during the general elections this year, and assured investors not to worry about their security.

"Indonesia will be able to maintain security, so that it is not necessary for investors to be afraid of anything. No need for them to remain in a wait-and-see position or procrastinate their investment," the head of state said at the Jakarta Stock Exchange building here on Monday.

Yudhoyono made the remarks in a dialogue with market shareholders after officially opening the first trading session at the bourse in 2009.

According to the president, investors during a general elections normally maintained a wait-and-see stance before deciding on an investment.

"We had a direct election in 2004 and since then over 200 provincial and district leaders` election had been implemented. Meanwhile, we have also conducted direct democracy in many foreign countries," he said, adding that therefore, the government along with the general elections commission (KPU), the general election supervisory agency, the constitutional court, regional KPUs, and the police should carry out their tasks well.

In the current situation, the president believed that Indonesia would be able to manage and control the country`s politics and security during the general elections.

"There will be some clashes, friction and difficult campaigns. These incidents often happened in advanced countries and in the developing countries," he said.

The president said that general election should not be seen as a tense period or a burden to the community, but placed in an appropriate position.

On the occasion, the president also asked domestic investors to concentrate more on efforts to improve market capitalization in share trading at the Indonesian Stock Exchange (BEI), predicted to be able to support the BEI.

BEST ISLAMIC FINANCIAL INSTITUTIONS IN BANGLADESH (GLOBAL FINANCE 2008) : Islami Bank bANGLADESH

M. Fariduddin Ahmed, Executive President of Islami Bank Bangladesh Limited

Bangladesh is one of the largest Muslim countries in the world. The people of this country are deeply committed to Islamic way of life as enshrined in the Holy Qur'an and the Sunnah. Naturally, it remains a deep cry in their hearts to fashion and design their economic lives in accordance with the precepts of Islam. The establishment of Islami Bank Bangladesh Limited on March 13, 1983, is the true reflection of this inner urge of its people, which started functioning with effect from March 30, 1983. This Bank is the first of its kind in Southeast Asia. It is committed to conduct all banking and investment activities on the basis of interest-free profit-loss sharing system. In doing so, it has unveiled a new horizon and ushered in a new silver lining of hope towards materializing a long cherished dream of the people of Bangladesh for doing their banking transactions in line with what is prescribed by Islam. With the active co-operation and participation of Islamic Development Bank (IDB) and some other Islamic banks, financial institutions, government bodies and eminent personalities of the Middle East and the Gulf countries, Islami Bank Bangladesh Limited has by now earned the unique position of a leading private commercial bank in Bangladesh.

Aims and Objectives :
To conduct interest-free banking.
To establish participatory banking instead of banking on debtor-creditor relationship.
To invest on profit and risk sharing basis.
To accept deposits on Mudaraba & Al-Wadeah basis.
To establish a welfare-oriented banking system.
To extend co-operation to the poor, the helpless and the low-income group for their economic upliftment.
To play a vital role in human development and employment generation.
To contribute towards balanced growth and development of the country through investment operations particularly in the less developed areas.
To contribute in achieving the ultimate goal of Islamic economic system.

The Bank, since its birth, has been relentlessly working to project and promote the lofty ideals of Islam in the fields of economics and banking and to reach the people of all walks of life and bring home to them the concept of Islamic banking.

Thus, it has been able to create a favourable image about Islamic banking among the people. The Bank releases advertisements through radio, television, magazines and newspapers to make urban and rural masses aware of the ever growing concept, modes of operation, schemes and services of the Bank and to focus on its progress and motivate traders, businessmen and industrialists to establish and broaden their business links with the Bank. To promote healthy growth of art and literature in the country, literary magazines are patronised.

The Bank has so far published a number of books, booklets, souvenirs and folders on different aspects of Islamic banking and Islamic economics. Attractive multi-coloured posters were also published depicting the aims and objectives, people-oriented special investment schemes of the Bank.

National and international newspapers and magazines published features and in-depth reports on the progress of the Bank and made editorial comments praising the welfare activities of the Bank.

Bank's quarterly research journal 'Islami Banking' highlighting the concept of Islamic economy, banking, insurance, prospect of economic collaboration among the Muslim countries etc. started its publication in 1992 which has been widely acclaimed by all sections of people including academicians, economists, bankers, journalists, judges, intellectuals etc. A periodical house magazine named 'Islami Bank Parikrama' is being published regularly as the mouthpiece of the Bank. Discussion meetings, seminars, symposia, workshops are also being arranged to apprise the people of the Islamic banking system. Stalls and booths were opened in different national and international fairs for projecting the activities of the Bank.

Best Islamic Financial Institution in United Kingdom (Global Finance 2008): HSBC Amanah

HSBC Amanah is the global Islamic banking division of the HSBC Group, and was established in 1998 with the aim of making HSBC the leading provider of Islamic banking worldwide. With more than a hundred professionals serving the Middle East, Asia Pacific, Europe and the Americas, HSBC Amanah represents the largest Islamic banking team of any international bank.
The HSBC Group is one of the largest banking and financial services organisations in the world. With operations in twenty OIC member states, no international bank is more widely represented in the Muslim world than HSBC. Nor has any made a greater investment in Islamic banking. Headquartered in London, the Groups international network comprises about 10,000 offices with almost 110 million customers in 77 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With a rich history of community banking and a commitment to meet the particular needs of our diverse customers, we are the world's local bank.
HSBC Amanah has won the Euromoney 2005 awards for Best Islamic Wholesale Bank and Best for Private Banking Services.
HSBC has a rich tradition of community banking, and HSBC Amanah was established to serve the particular financial needs of Muslim communities. Our mission statement and corporate values reflect this vision.
HSBC Amanah considers Shariah compliance of its business operations as its most important & strategic priority. This is reflected in its Corporate Values, "In developing our products and services, we are committed to the highest Shariah standards in the Islamic banking industry." In addition to Global Shariah Advisory Board and Regional Shariah Committees, HSBC Amanah employs a team of qualified professionals to ensure that the guidance and advice received from the Shariah Committees is implemented in letter and spirit.
HSBC Amanah brings together the largest team of any international Islamic financial services provider. We are widely recognised as a market leader in terms of global reach, innovative products and services and our investment in industry building initiatives. With more than 100 people in eight countries, the HSBC Amanah family continues to grow.

HSBC Amanah has won the following awards:
Euromoney awards, Best International Provider of Islamic Financial Services (2004), Best International Sukuk House (2004, Best Islamic Wholesale Bank (2005), Best for Private Banking Services (2005)

Award-winning transactions:
Emirates ECA-backed financing 2001, (Euromoney, Jane´s Transport Finance, Institutional Investor, Airfinance Journal), Government of Malaysia Global Sukuk - 2002,(Euromoney, Institutional Investor, Asiamoney, FinanceAsia), Emirates IV, with Islamic Development Bank - 2003, (Jane´s Transport Finance)

Dream fulfilled helps Muslims realize theirs (1)

By Elliot Blair Smith, USA TODAY
PASADENA, Calif. — On a sunny afternoon, Yahia Abdul-Rahman ignores the broken air conditioner in his mortgage-finance company's cramped Southern California office. Around him, three-dozen employees, some of them Muslim women veiled in scarves, toil amid the rising heat and stacks of paper clutter.
Chief lending officer Syed Rehman, 64, his crumpled white shirt rolled up to the elbows, is attempting to close a loan in Urdu, the language of his native Pakistan. In English, he complains that his crowded corner, which he shares with two assistants, is "boiling."
But the boss, Abdul-Rahman, 60, is as cool as his blue-green eyes. The CEO and founder of American Finance House-Lariba already has succeeded in two previous careers, as a chemical engineer and financial planner. Now, he is creating his legacy in a third: Lariba is among a handful of lenders that dominate this country's small but growing $600 million Muslim mortgage market.
Governed by the Islamic religion's sharia laws, which prohibit earning or paying interest on borrowed money, the market is expected to double in the next few years as American Muslims with conventional home loans look to refinance with Islamic products.

Lariba's interest-free mortgages resemble lease-to-own contracts. Buyers build equity while paying rent and principal. One difference: Lariba homeowners immediately take title while the finance company retains a lien. Its competitors offer variations.

"We are not run-of-the mill marketing people who find a niche and run with it," says Abdul-Rahman, elegantly attired in a dark suit and sleek tie. "We are humble servants of the community."

Muslim mortgages
Under Islam's sharia law, which guides moral conduct, interest-bearing income and debt are considered sinful. But financing may be arranged to incorporate negotiated profit margins and fees rather than compounded interest.

Ijara-wa-Iqtinaa: Lease to own
Home buyer acquires title to property while financier retains a legal claim to the investment. Buyer's monthly payments to financier include lease and equity components. Title transfers at end of contract.

Murabaha: Installment purchase
Home buyer identifies property and negotiates price, but financier executes transaction with seller. Financier immediately resells property to end buyer on installment-payment plan at pre-agreed markup.

Musharaka: Co-investment
Home buyer and financier are co-owners through a partnership entity such as a limited liability company. Buyer's monthly payments consist of rental and equity components. Over time, buyer's equity grows.

Source: USA TODAY research

Not 3½ years after the Sept. 11 terror attacks put the U.S.-Muslim relationship in sharp focus, the nascent Islamic finance market is undergoing profound change.

U.S. authorities have identified several Muslim charities as terror-financing fronts. And scandals have erupted at two banks with ties to the Middle East: Arab Bank in New York and Riggs National Bank in Washington, D.C. But the attention also is contributing to the modernization and development of some ancient articles of faith.

Islamic mutual funds and even hedge funds are beginning to flourish, as are interest-free mortgages and business loans. The nation's estimated 1.1 million American Muslim households, long deprived of sharia-compliant financial products, are benefiting as a result.

Rushdi Siddiqui, director of the Dow Jones Islamic Index Group, which tracks sharia-compliant investments, says, "Frankly, with 9/11, as with any tragedy, there was a silver lining. One of the silver linings ... was a revival by Muslims to look inward to how they can be more compliant (with the Islamic faith)." As a result, he says, American Muslims have become better educated about alternatives to Western financial products.

The trickle of new capital is changing people's lives.

In Sacramento, hospice physician Khurram Ali, 37, a Pakistani immigrant, was living in a rented apartment with his pregnant wife and young son when recently he found a $383,000 house for sale near a Muslim mosque and school.

Having gone without Muslim comforts during the 41/2 years he practiced medicine in South Dakota, Ali feels at home in California. But he was unwilling to buy the property without an interest-free loan.

"I felt so strongly that if we were not able to get financing — which was possible — we were going to stay in our rented apartment," says Ali, who paid Lariba an "implied" interest rate of about 6% on his loan, making it slightly more expensive than conventional mortgage rates.

Lariba's implied rate reflects the rental income and any transaction fees calculated as a percentage of the purchase price over the life of the lease-to-own contract. It is tax deductible to the homeowner, just as mortgage-interest expense is to conventional borrowers.

In central Los Angeles, Fouzia and Asfaq Shabandri — Muslim immigrants from India — recently acquired their fifth KFC franchise with interest-free financing from Lariba.

And in Cedar Park, Texas, Altaf Hussain, 43, a semiconductor marketer, just purchased a $475,000 house for his family through Lariba. "With our kids growing up, we wanted to set an example for them," he says. "I wanted a competitive rate. But, to get out of paying interest, I would have been willing to pay a little higher to get into a Muslim mortgage."

New Sharia products in Asia sought

The booming Islamic finance industry has yet to rub off on wealthy Asians who say there are far too few Sharia products to invest in, the private banking arm of Malaysia's second largest lender said yesterday.
Sharia investing is a key pillar in the Middle East and has caught the interest of non-traditional centres such as London and Singapore, but rich Asians are still cool on it.
Asia is a big potential market for the $1 trillion Islamic finance sector, with the Asia-Pacific home to 28 per cent of the world's high-net-worth-individuals, who are defined as those with investible assets of more than $1 million.
Even in Malaysia, which has the world's largest Sharia bond market, wealthy individuals have limited interest in Islamic assets.
"The appetite is still quite small because they continue to nibble," said CIMB Private Banking co-head Carolyn Leng.
The bank says it is Malaysia's top private banking firm with assets of 4.4 billion ringgit ($1.23bn). The bank expects to increase this to about 7bn ringgit by 2010, Leng said.
"Offering of Islamic products are not that great here, what you have is probably what the market (outside) has as well. Product innovation is key, we need to be a lot more creative."
Structured products and Islamic bonds are the main sharia products that wealthy Malaysians put their money into, Leng said.
In contrast to Asia, Middle East investors have a wider choice of Islamic offerings as banks tap their global resources to structure innovative products, Leng said.
"There are a lot of derivatives-based kind of products. The way they structure some options into their products is interesting because it's done in such a way that it's a profit-sharing method," she said.
Islamic banking products can be bought and sold by all investors, regardless of individual religious belief, and is premised on the notion of ethical investing.
Islamic banks have been barely bruised by the global financial crisis, although falling property and commodity prices and slowing economies are starting to affect the sector.
Source : Gulf Daily News

The first sharia bank in Kuwait

Kuwait Finance House (KFH) was established in the State of Kuwait in 1977, as the first bank operating in accordance with the Islamic Shari'a. KFH is listed in Kuwait Stock Exchange (KSE), with a market capitalization of KD 3.133 billion as of 31 December 2006. Assets total KD 6.314 billion and deposits amount to KD 3.730 billion, representing 25% of the total deposits in the Kuwaiti market as per the balance sheet of 2006.

KFH has been highly rated by prestigious international agencies. Standard & Poor's rated KFH A-/A2 for short and long term investments, respectively. Capital Intelligence rated KFH A/A1 for short and long term investments, respectively. Fitch International also rated KFH A, and Moody's rating was Aa3. KFH has been awarded by The Banker magazine as the world's Best Islamic Financial Institution, and for third successive year it has been awarded by EuroMoney magazine as the best bank.

KFH provides a wide range of Islamic Shari'a compliant products and services, covering banking, real estate, trade finance, investment portfolios, and other products and services.

Since the 1980's, KFH has witnessed multi-activity in international expansion. It has established independent banks in Turkey, Bahrain, and Malaysia. Moreover, it has stakes in other Islamic banks. Its investment activities in the US, Europe, South East Asia and the Middle East contributed tremendously to achieving the ever-growing profit of KFH, in collaboration with the world's leading companies and banks, such as Citibank, Deutsche Bank JP Morgan, Chase, BNP Parisbas, ABN Amro, HSBC, and Islamic Development Bank (IDB).

KFH has always endeavored to expand its local branch network, covering 42 branches, in addition to special sections for ladies. It adopts the out-of-branch client concept. KFH has maintained its foothold as a pioneering entity in utilizing the latest technologies to meet the requirements of the various activities in which it operates, using online, SMS, as well as phone service (Allo Baitak), which has received the highest accreditation from the US Purdue University for outstanding customer service level.

KFH is proud of its manpower skills. It employs a number of outstanding human resources, and is a pioneer in manpower Kuwaitization, where Kuwaiti manpower exceeded 52%.

Business Oportunity in Indonesia

The Indonesian government is targeting growth of the electronics industry around 13.15 percent in the period 2005-2009 with a target investment reached 2.5 billion U.S. dollars.

"Industrial consumption of electronics and components industry is a priority that will be developed in accordance with the National Industry Development Policy", said Minister of Industry, Fahmi Idris on the celebration of the achievement of the production of television (TV) Sharp to-10 million units in Jakarta on Thursday.

He said that currently there are approximately 230 companies in the field of electronics that operate in Indonesia. The government view the electronics industry, including leading the industry with a target of average growth in 2005-2009 reached 13.15 percent.

"To achieve these targets required additional investment of not less than 2.5 billion U.S. dollars, with hopes to create 15,000 new job opportunities per year," said Fahmi.

For that, he continued, the government has been working to create a conducive climate, especially related to taxation, fiscal incentives, and employment laws.

In addition, the government also refers to the electronics industry during this, there are many on the island of Java and Batam more spread to other areas through the regulation number 1 of 2007 to give fiscal incentives for certain industries and / or in certain regions, especially outside Java Island.

However, responding to question the government's plan and the elimination of the decline in Luxury Goods Sales Tax (PPnBM) a number of electronic products, Fahmi only hope that there are stages to this is the last one, given that the proposal has been around two years, but have not signed the Minister of Finance.

Meanwhile, Director General of Industrial Equipment and Transportation on (IATT)) • DEPPERIN Budi Darmadi said until now the target of investment of 2.5 billion dollars during 2005-2009 has reached around 70 percent.

"Until now about 70 percent of the target investment in the field of electronics has been reached. A number of companies from Japan, South Korea, and China, such as Sharp, LG, and Changhong, has been to instill and increase investment in Indonesia," he said.

President director of PT Sharp Electronics Indonesia (SEID) Fumihiro Irie said on the same opportunity that this year the government has added approximately 140 billion investment.

"Around Rp100 billion, we have investasikan to add new production lines refrigerator, because there is a large demand from the market in the country," he said.

While the rest, information Irie, is used to increase the production capacity of washing machines. He was optimistic Indonesia's electronic market will still grow next year with growth of around 20-25 percent, reported by Republika News.

Islamic Banking: Opportunity or Threat?

According Rodney Wilson, director of postgraduate studies at Durham University's Institute for Middle Eastern and Islamic Studies, Islamic banking, which implies the avoidance of interest, has become a substantial industry during the last four decades. One obvious question is whether its emergence further segregates Muslims from Western values and norms, creating a financial ghetto. An alternative view is that as increasing numbers of people in the West are dissatisfied or skeptical about the banking services they receive, and see them as exploitative or even unethical, the emergence of Islamic banking with its own distinctive morality results in Islam projecting a much more positive face.

Many Western bankers view Islamic finance as a curiosity, and perhaps even a business opportunity, but seldom as a threat comparable to that from Muslim extremism. Indeed, Islamic banking and finance can be regarded as a gentler aspect of Islam, and one that lends itself to dialogue between Westerners and Muslims.

Islamic retail financial institutions, including the Islamic Bank of Britain, the European Islamic Investment Bank, and Lariba Bank in California, are now well-established in a number of Western countries. Furthermore, the leading international banks, including Citibank, HSBC Amanah, Deutsche Bank and UBS of Switzerland, all offer Islamic deposits and Shari'a-compliant financing facilities.

There has been much dialogue between the Western bankers working in these institutions and the Shari'a scholars who advise what is, and what is not, permissible. This dialogue extends to insurance, where Islamic takaful companies have become increasingly active, their distinguishing feature being that they do not hold conventional interest-yielding bonds, and that shareholder funds and premiums paid by policy holders cannot be co-mingled, which could result in the former exploiting the latter's misfortune.
As Shari'a is about universal, divinely inspired principles rather than national laws, leading international law firms have also become involved in Islamic banking and finance, as contracts need to be drafted under English or American law in a way that is consistent with Shari'a. Indeed, the main job of the Shari'a committee members who serve on the boards of Islamic banks and conventional banks offering Islamic products is to ensure that new contracts are compatible with Shari'a principles and, if they are not, to pursue a dialogue with the lawyers concerning amendments and redrafting.

The aspiration of many Islamists is to have divinely inspired Shari'a replacing man-made laws, perhaps even the establishment of a universal caliphate under which everyone, Muslim and non-Muslim, should live. Not surprisingly, such an aspiration is unacceptable for most non-Muslims, and indeed for many Muslims, as it denies choice.

Islamic banking and finance can point to the way forward: it is about extending choice, not restricting options. As each institution has its own Shari'a board, Shari'a compliance is effectively privatized, rather than being a matter of national law. Indeed, each Shari'a board passes its own fatwas, or religious rulings, which further extends choice in the marketplace for religious ideas. Religion, of course, flourishes under competitive conditions and Islam is no exception, whereas when it is nationalized, its adherents soon become alienated.

The Islamic Republic of Iran can be regarded as an example of how not to encourage the development of Islamic banking and finance. There, all banking has been Shari'a - compliant since the Law on Interest Free Banking was passed in 1983. Bank clients have therefore no choice but to use the Shari'a system. The banks, however are state-owned and have little autonomy, even in determining what deposit and financing products to offer. They also do not have Shari'a committees, the argument being that this is unnecessary as the law ensures Shari'a compliance in any case.

The result has been that banking development has been slow, there is little financial innovation, and most Iranians do not have bank accounts. In contrast, on the Arab side of the Gulf and in Malaysia, where Islamic and conventional banks compete, Islamic banks have attractive products on offer and a growing client base. Al Rajhi Bank of Saudi Arabia has become the world's largest Islamic retail bank, and its range of services and delivery channels compares favorably with the best that Western banks can offer.
Islamic banking is here to stay, it is an opportunity rather than a threat, and it has an exciting future. Gaps remain-there is no Islamic bank in Israel, for example, to serve its Muslim population. But if the Central Bank of Israel licensed such an entity it could create much goodwill. It might also encourage the Jewish population living there to question whether the operations of their own banks are compatible with religious teaching in Leviticus and Deuteronomy.

Ultimately Islamic banking and finance is about the emergence of a distinctively Islamic form of capitalism that may co-exist and interact with Western, Chinese, Russian or any other capitalism. Such a development should be welcomed and facilitated, and not hindered or suppressed.