With an explosive growth rate and an estimated USD 4 trillion potential, is Sharia Banking immune to the effects of the global financial crisis?
US-based international credit-rating agency Standard & Poor’s estimates that the global potential for Islamic financial services could be close to USD 4 trillion, and Ibrahim sees Indonesia as especially situated for the economic expansion of Sharia banking. “Indonesia has the largest Muslim population in the world, which is approximately 240 million,” says Ibrahim “So with a huge Muslim population in Indonesia, there is a great potential demand for Islamic finance.”
Citing the World Economic Forum Report 2011, Ibrahim notes that with regard to competitiveness, Indonesia has moved up in rank to no. 44, which represents an improvement of 10 places. This he says makes the country an attractive destination for Foreign Direct Investments (FDI). Added to this is strong government encouragement of FDI into such economic sectors as mining, oil and gas, shipping and telecommunications. “This commitment is reflected in The Master Plan for The Acceleration and Expansion of Indonesia’s Economic Development 2011-2025,” notes Ibrahim, adding that out of a total investment figure of IDR 4.012 trillion in six economic corridors over the period from 2011 until 2025, IDR 1.786 trillion is targeted towards infrastructure investments.