Abstract
Islamic finance offers a viable and moral-ethical alternative when the world economy
suffers from global financial crises due to high debt-gearing and excessive speculations
leading to liquidations and losses. In the casino-like scenario of the conventional order,
Islamic finance is viewed as a game-changer, setting new rules and behavioral patterns
that appeal to humanity and other civilizations due to its adherence to the universal
principles of justice, equity and good conscience. In the beginning, Islamic finance may
have started off with a nationalistic or religious fervor due to independence from
colonialism and reassertion of an Islamic identity. But it has become evident to the
world that its core principles, if implemented sincerely, can prevent exploitation,
monopoly, bribery and corruption, excessive spending and hoarding of wealth, high
debt- gearing and speculation. Ideally, Islamic finance should be promoting values such
as entrepreneurship, transparent dealings, risk sharing, profit and loss sharing rather
than making profits from a predetermined return. Islamic finance is also based on
ethical principles such as trustworthiness and honest dealings, sanctity of contracts,
moderate and pragmatic behavior and equitable treatment of stakeholders. This paper
examines the role of Islamic finance in developing the ASEAN financial market
through cross- border collaboration, specifically with Thailand, through three engines
of growth: the Sukuk market, Halal market and Waqf. Islamic finance has opened up
many opportunities to the minority Muslims in Thailand and has helped speeded up the
integration process. As the world becomes smaller and cross-border players increase,
there is a need to have greater legal and regulatory certainty. To ensure Islamic finance
is on a level playing field with conventional finance as it crosses borders, the present
authors recommend a mutual relaxation of taxation laws and a trade liberalization
policy. Lastly, a unified and concerted effort is needed to promote equitable
development of ASEAN member nations within the Islamic framework of “prospering
thy neighbors”
Sheila Ainon Yussof, Razali Haron. (2017) The ASEAN Market: Cross-Border Collaboration in Islamic Finance between Malaysia and Thailand, Islamic Banking and Finance Review, Volume 4, Issue 1.
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