Speech by Tun Dr. Mahathir Bin Mohamad

SPEECH BY TUN DR MAHATHIR BIN MOHAMAD ON “ISLAMIC FINANCE AS THE MEANS TO REVIVAL OF ISLAMIC RENAISSANCE” ORGANISE BY LABUAN INTERNATIONAL ISLAMIC LECTURE AT CONVENTIONAL HALL, FINANCIAL PARK COMPLEX, LABUAN ON 11 NOVEMBER, 2010 --------------------------------------1. We talk a lot today about Islamic Finance – especially we who are Muslims. But Islamic finance is still in its infancy, in comparison with conventional banking. While it has been accepted even by non-Muslims, it has not as yet been able to displace significant portion of the conventional banking system. 2. Islamic banking is basically concerned with elimination of interest or riba in the repayment of loans. But quite obviously the lenders i.e. the banks must earn something from lending money – a process fraught with risks. 3. It is entirely possible for the whole loan to be lost. Without some means of getting a return from the business, the losses may lead to the bank failing or even closing down. 4. We are seeing today the most extensive financial catastrophe resulting from the conventional banking system and various practices which are associated with it being abused. We can claim that the Islamic financial system has not contributed to this catastrophe, that it is immune. But nevertheless we can learn much from the mistakes made by the conventional financial system which has resulted in the current crisis. We must take note of the mistakes of the conventional systems so that we will not be involved or be the cause of future crisis in our anxiety to provide all the services presently available with conventional banking and finance. 5. Basically, the cause of the present crisis is due to greed which led to abuses of the system in order to make easy money. 6. The banking system is principally intended to make money available for business i.e. the production and sale of goods and services to meet the ever growing needs of human society. The sale of goods and services constitute trade, an economic...