The 2nd Annual Langkawi International Islamic Finance And Economic Conference 2010 held at Pelangi Meritus Langkawi from 13th to 15th Dec 2010 :Summary of Keynote Address by Yg Bhg Tun Dr Mahathir Mohamad (Part One of Tun Dr M Summary)

Yg Bhg Tun Dr Mahathir Mohamad was invited to give a keynote address to the delegates coming from every corner of the globe with the presence of President of the IDB and YAB Kedah Menteri Besar.

Summary of what Tun Dr M said while comparing conventional and Islamic banks in light of the global financial crisis:-

1) Bank lend money that they dont have.
2) Bank should therefore be able to create money.
3) Bank assume majority of its customers who deposited their money will not immediately use the money--possibly only 10% would have immediate usage of their savings and 90% will keep therefore banks are able to lend money with the deposits that they took from the customers.
4)If they lend everything, bank will be in trouble if not enough money--normally would need govt support. " In a democratic system, If govt doesnt deliver, govt will loose election"
5) Recently Federal Reserve Bank created USD 600 Billion--they created the money, need not print USD 600 billion--just signing cheques.
6) Those days --early days in Malaysia 'Bank Notes' --notes that were printed and issued by the banks that were regarded as currencies.
7) Those days also--British didnt allow local banks to be set up.
8) Therefore, Islamic Countries are unable to grow because have no money and dont have access to money and cannot develop while western countries grow and developed.
9) Thus for a long time there was no Islamic Banking.
10) But around second half of last centuries, Muslims become very rich-Allah swt granted oil. Initially, coz they were not smart--got paid only 20 cent per barrel that were selling at USD 2 per barrels.


To be continued soon