Professor Rifaat, Sheikh Kamel, Excellencies, Ladies and Gentlemen, may I first say what a pleasure it is for me to be here with you this morning. I was delighted that the Islamic Financial Services Board and the General Council for Islamic Banks and Financial Institutions agreed to meet together for a first time here in London; and that during your discussions on the regulatory environment you took the opportunity to discuss the role of Islamic Banking and Development. This came at the suggestion of my International Business Leaders Forum, and is an issue particularly close to my heart.
I've taken a special interest in Islamic Financial Services ever since the day three years ago when I met Mr Iqbal Khan of HSBC, whom I suspect many of you may know, at the East London Mosque at a gathering rather like this. Iqbal explained to me some of the challenges which young Muslim entrepreneurs faced, when seeking banking services let alone the problem of the provision of Islamic mortgages. They wanted to deal with financial houses which understood the particular strictures which the Koran teaches on the lending and borrowing of money. A failure to address these issues – particularly, but not only, in the West – was a real inhibition to the economic and social advancement of many Muslims.
As a consequence of that conversation, I spoke to various people in the City of London and in the Treasury, and I was gratified to learn a few months later that a working party had been set up, with the help of Barclays Bank, to promote Islamic banking products onto the UK and wider market. My Prince's Trust has been engaged in promoting these services in Muslim communities here in the UK, and I am delighted that Robert Davies, who also met Iqbal at my suggestion, has worked with such characteristic drive and commitment to ensure that the issue is being addressed on a wider stage. I do believe very strongly that now is a good time to focus on these Islamic banking services, and the key role they can play in development right around the world.
I know that for many years exemplary work in rural development has been undertaken by the Aga Khan Rural Support Programme and it has been splendid to hear all about it from Mr Khan and renew our acquaintance after 10 years.
It is most impressive how economic self-help has been stimulated in the poorest communities, assisting literally thousands of farmers and villagers to be self-sufficient, in places where there are acute risks of poverty and conflict.
Similarly, it was a joy to hear from Bunker Roy as it always is. Over the last 20 years or so I have been privileged to visit (twice) the villages being assisted by Bunker Roy through the Barefoot College at Tilonia in rural Rajasthan, which we have also heard about most recently last November. This is a living demonstration of dynamic if modest rural life based on self-help and development. In a region where previously there was a sense of real hopelessness, we now have a system that helps over 100,000 people rise above poverty. Most interestingly, it also demonstrates how local economic development enables Hindus and Muslims to co-existence, peacefully and co-operatively, where there is security and community spirit.
I firmly believe that much can be learned from these humble lessons as to how great financial institutions can better work for the common good in areas threatened by poverty, conflict and despair.
Nearer to home, we have also heard a little from one of the young Muslim entrepreneurs assisted by my Prince's Trust to start up in business with a small loan and sometimes a grant as well and business mentoring elements. This model in the UK has assisted over 60,000 businesses over the past 20 years in a similar fashion.
I am enormously proud of people like the young businessman we have heard from today. Investing in the future will repay itself in so many ways.
I remain deeply concerned about the growing challenges in Britain's cities, where we can see a generation of young Muslims at risk of frustration, unemployment and indeed alienation. We have made a special effort to include them in the focus of my Prince's Trust. To this end we also, with the help of legal advisers represented here today, obtained guidance in 2001 from the Muslim Council of Britain to a framework enabling young Muslims to take business start-up loans from my Prince's Trust that conform to Islamic principles. A judicial ruling – a Fatwa – was issued following close consultation with Shariah Scholars in Bahrain, so that young Muslims would feel more comfortable about taking loans that incorporate an ‘administrative fee'.
Using this model, we have also been helping the emergence of youth business development projects elsewhere, such as in Saudi Arabia through the recently formed Centennial Foundation. There has been great interest shown in other countries.
So I feel that I have made one of my own small steps to advance the application of Islamic banking principles to assist the diverse communities of Britain and other countries where this same approach can be taken.
I am aware that Islamic Banks are one of the youngest and fastest growing branches of the world's financial services. I am also aware that regulatory issues are being reviewed. Perhaps I could just add my own suggestion here, and ask if, alongside the clear moral principles that define Islamic banking, and the well established traditions and formulae for ‘Zakat', that we all look more closely at ways in which we could encourage partnerships, particularly with those voluntary organisations who seek to promote rural and youth enterprise development. It would make a big difference.
I feel there is some urgency in this today, both in our country and in many Islamic countries – especially, if I may say so, in the Middle East. For the last ten years or so, I see pressing challenges from the rapidly growing populations of young Muslims - and there are up to 60% of many populations in the region under 20 - who will be at risk of frustration and conflict unless we can all do more to promote community and entrepreneurial development. How else do we counter the perception of so many young people that they have little or no stake in society? So I urge you strongly to consider some of the ideas we have heard of this morning as a focus for active engagement by the Islamic banks and others who do business in your countries.
One of the practices to emerge more recently in the business and financial community in this country, where there is a very high concentration of international financial services in the City of London, is a stronger commitment to the practice of corporate social responsibility. This as you all know combines business ethics and good business practices with community and environmental responsibility. I feel there is much that can be learned and shared between banks in diverse cultural settings. My International Business Leaders Forum, for example has recently launched the ‘Gulf Partnership for Leadership in Responsible Business', based in the UAE, which aims to work with the regional financial services and banks to promote this approach, and also to encourage young bank employees to play an active part in their communities by mentoring young entrepreneurs, students and community organisations.
All I can say Ladies and Gentlemen, is that this approach works incredibly well, where it is established in this country and in other parts of the world.
At the heart of the great religions, including Islam, are the common themes of helping the less fortunate, being responsible stewards of the natural world, and demonstrating values in our daily work. I am encouraged to think that these ideals can permeate Islamic banking at its best – and we've seen examples of this. But as new and urgent challenges emerge to do something about the large numbers of young people in our midst, so a new focus and new partnerships will sorely be required drawing on the examples of economic self-help, enterprise and community service about which we have just heard.
Addressing these challenges together, in a spirit of sharing and learning, based on respect for our Faiths and recognition of the value that comes from diversity, could be a calming influence in these troubled times in which Islamic Banks have a key role to play.