Bandar Seri Begawan / DPA
Brunei should take advantage of the region’s growing Islamic finance industry which is set to develop even further with the support of large Muslim populations in Southeast Asia.
In an interview, Jeff Pirie, a senior partner from auditing firm Deloitte Singapore, said that Islamic finance is a good area where Brunei can build expertise outside of the oil and gas sector.
I wouldn‘t be put off by the scale of the players in Malaysia or anywhere else. The reality is that the sector as a whole in Southeast Asia is still in its earliest stages of development and is still dwarfed by the conventional banking sector,” he said in an email to The Brunei Times.
But with the world’s largest Islamic population (Indonesia), there should be strong growth in new business in the coming years,” he said.
Last year, international news agency Reuters reported that Indonesia’s capital market regulator Otoritas Jasa Keuangan (OJK) outlined a five-year strategy to help Islamic banks hold at least 15 percent of Indonesian banking assets by 2023.
Malaysia’s Islamic finance sector holds are larger portion comprising 20 percent of Malaysia’s total banking assets, the report said.
Pirie said that local players are well-positioned for a regional expansion as they have real scale, good profitability and strong capability on a domestic level.
From the strong base, he said that expansion will first happen through participation in individual trades before adapting to a permanent presence and full scale operations in the Asean markets.
But underlying all this is the necessity to build real competitiveness in the existing organisation and the capabilities that can compete and win in the region as a whole,” he said. As for the regional economic integration, Pirie said that the business community may take some time to notice the effects of the Asean Economic Community (AEC).
He said that the overall level of engagement and awareness on the specifics of economic liberalisation may not be completely understood by business as a whole.
Even when implemented, there will likely be a time lag for some or all of the effects of the change to be felt,” he said.
He also said that those undertaking the job to liberalise trade define the completion of task as agreed and not necessarily legislated or implemented.
The fact remains that much needs to be done and the benefits will take some time to flow through. There is also the need for businesses as a whole to stay
engaged, he said.