LANGKAWI, Wednesday 15 December 2010 (Bernama) -- The implementation of Islamic finance and Islamic banking should be seen by Islamic countries as the opportunity for them to develop their respective countries, says former Prime Minister Tun Dr Mahathir Mohamad.
He said Islamic countries do not have the excuse not to grow as they can can borrow from Islamic banks to develop their countries and become prosperous.
"We now have products created by Islamic banking system. Before this they did not want to borrow from conventional banks. These are syariah compliant products," he said in his keynote address at the Second Langkawi Islamic Finance and Economics Conference (2LIFE) which concluded here today.
Dr Mahathir said funds are available and with access, the businesses in Islamic countries and among Muslims should continue.
"We can have great conglomerate companies."
The bigger the companies, more tax could be paid to the government and the government will give back to the people, he said.
"When a government develops the country such as through infrastructures, the money largely goes back to the government. Through infrastructures, we can have more development activities and people will have better income and companies get better. The act of a government spending money will benefit the government also," he said.
However, Dr Mahathir said Muslims must also understand Islamic banking and know how to manage the funds, so that they can get profits and these funds are always available for loans.
The former premier also spoke against investments in hedge funds.
"Don't deal in imiginary wealth," he said.
He said if Islamic banking and finance is fully utilised, Islamic countries could one day become developed nations as well.
Dr Mahathir said European countries became developed when they moved from being moneylenders to developing banking systems as the way to create wealth.
"Now you have the (Islamic) banks that can be used as a source of fund. We must know how to utilise the fund to benefit Muslims."
He said experts in Islamic banking system have come up with many products to compete with conventional products and they have become popular among non-Muslims as well.
Dr Mahathir was today also conferred Permanent LIFE Patron and presented with the First Insaniah-IRTI (Islamic Research and Training Institute) LIFE Award 2010. The award was presented by Kedah Menteri Besar, Datuk Seri Azizan Abdul Razak.
The three-day event was attended by more than 200 Islamic scholars and professionals in finance and economics. It was organised by Insaniah University College, Kedah State Government and IRTI, which is a unit under the Islamic Development Bank (IDB), Jeddah.