Critical Issues and Challenges in Islamic Economics and Finance Development PDF
Preview Critical Issues and Challenges in Islamic Economics and Finance Development
Critical Issues and Challenges in Islamic Economics and Finance Development Edited by Velid Efendić Fikret Hadžić and Hylmun Izhar Critical Issues and Challenges in Islamic Economics and Finance Development VelidEfendić (cid:129) FikretHadžić (cid:129) HylmunIzhar Editors Critical Issues and Challenges in Islamic Economics and Finance Development Editors VelidEfendić FikretHadžić UniversityofSarajevo UniversityofSarajevo Sarajevo,BosniaandHerzegovina Sarajevo,BosniaandHerzegovina HylmunIzhar IslamicResearchandTrainingInstitute Jeddah,SaudiArabia ISBN978-3-319-45028-5 ISBN978-3-319-45029-2 (eBook) DOI10.1007/978-3-319-45029-2 LibraryofCongressControlNumber:2016961642 ©IslamicResearchandTrainingInstitute,VelidEfendićandFikretHadžić2017 Thisworkissubjecttocopyright.AllrightsaresolelyandexclusivelylicensedbythePublisher,whetherthe whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similarordissimilarmethodologynowknownorhereafterdeveloped. Theuseofgeneraldescriptivenames,registerednames,trademarks,servicemarks,etc.inthispublication doesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexemptfromtherelevant protectivelawsandregulationsandthereforefreeforgeneraluse. Thepublisher,theauthorsand theeditorsaresafe toassumethattheadvice andinformationinthis book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regardtojurisdictionalclaimsinpublishedmapsandinstitutionalaffiliations. Coverillustration:©LoopImagesLtd/AlamyStockPhoto CoverdesignbyTomHowey Printedonacid-freepaper ThisPalgraveMacmillanimprintispublishedbySpringerNature TheregisteredcompanyisSpringerInternationalPublishingAG Theregisteredcompanyaddressis:Gewerbestrasse11,6330Cham,Switzerland Preface fi fi ’ Islamic nanceisoneofthefastestgrowing eldsintheworld seconomy thatoffersgreatperspectivesanddynamism;butinitsstructure,products and services it creates institutions that are offered by the conventional system as well. As it grows, it encounters new experiences, markets and — clients butalsocompetitorsthatbringnewchallengesthatthisindustry needstoidentifyandanticipate. Thisisespeciallythecaseinnon-Islamic countries and regions, such as Europe and the Western world in general. Accordingly,inNovember2014,theEuropeanAssociationforIslamic Economics, Banking and Finance and the School of Economics and Business in Sarajevo, at the University of Sarajevo, in collaboration with the Islamic Research and Training Institute (a member of the Islamic Development Bank), together with their esteemed partners, organized ’ “ Sarajevo s third Islamic Finance Conference entitled: New Challenges ” For Islamic Economics and Finance Development . This conference fi covered contemporary issues in Islamic nance and gathered various fi experts and practitioners from the eld who presented their recent research. The special focus of the conference was to set the basis for further discussion and development of Islamic economics, banking and fi nance.Theconferenceprovidedanopportunitybothforleadingexperts andstudentstomeeteachotherandexchangetheirknowledgeandideas. v vi Preface Inthisway,theycontributedtotheaimofestablishingastablenetworkof academics and business people interested in this area. The peer-review team has selected the most relevant papers from the fi fi eldofIslamic nanceandthetopicsoftheconference.Thereweremany good papers, but only 25 were selected and presented at the conference. From these papers, the editorial board has selected ten that are most relevant and interesting for the broader public and further research in fi the eld. fi ThebookcoversawiderangeoftopicsrelatedtoIslamic nance,from fi Islamicmicro nance,theempowermentofwomeninIslamiceconomies, risk management, legal issues, sukuk, waqf, Islamic portfolio optimiza- fi tion, and some experiences in the implementation of Islamic nance. We would like to express our gratitude to Professor Mehmet Asutay from Durham University for his amazing efforts and deeds in supporting fi and promoting Islamic nance research and academic development in Bosnia. This book is just one product of his gracious support. Finally, we have to thank our young colleagues who have put much fi effort into the technical preparation of this book. We must rst thank Admir Meskovic, without whom the project would not have been so successful. Also, we would like to thank our colleague from the USA, a studentontheMAinIslamicBankinginSarajevo,OmarB.Yunus,who helped in the editing of the text. Lastly, we would like to thank all our othercolleagues,students,volunteers,partnersandfriends.Withouttheir great support, this project would not have been realized at all. ć University of Sarajevo, Bosnia and Herzegovina Velid Efendi Contents 1 How Do Sovereign Sukuk Impact on the Economic Growth of Developing Countries? An Analysis of the Infrastructure Sector 1 Ahlidin Malikov 2 No Way Out for Sukuk Illiquidity? Proposing a Primary Dealer System for the Sukuk Market 39 Ilham Reza Ferdian and Miranti Kartika Dewi 3 ThePossibilityoftheApplicationofanEarlyWarningSign System into the Quality Management System of a Credit Portfolio of Islamic Banks 61 ž ć ć Fikret Had i and Amir Softi 4 A Look at Cash Waqfs as Islamic Financial Institutions and Instruments 85 Mehmet Bulut and Cem Korkut vii viii Contents 5 The Implementation of Islamic Financial Services in Afghanistan: A Case Study 97 Natalie Schoon 6 All-Weather Financial Portfolio Optimization with Islamic Constraints and Risk Minimization 115 ž ć ž ˇ ć Migdat I. Hod i , Zlatko D . Sijerci , and Tarik Names 7 The Usefulness of Financial Ratios in Discriminating Between Healthy and Distressed Companies: The Case of an Islamic Bank 137 ˇ ć ˇ ˇ Nerma Saracevi and Natasa Sarlija 8 The Empowerment of Women in Islamic Economies: The Bosnia and Herzegovina Experience with a Focus on ’ Business Problems in a Women s Small Entrepreneurship 157 ˇ ć ć Munira Sesti and Sabina Ibrahimagi fi fi 9 BusinessModelandOperationalEf ciencyofMicro nance in Bosnia and Herzegovina: Lessons for Islamic fi Micro nance 191 ć ž ć Velid Efendi and Fikret Had i 10 A Brief Analysis of the Expected and Non-expected Outcomes from the Application of the Rome I Regulation in the European Zone in Light of Islamic Cross-Border Transactions 213 Sultan Abdulsalam Index 233 Notes on Contributors SultanAbdulsalam isaPhDcandidateatUniversityCollegeDublin,Schoolof Law, the Republic of Ireland. He is also Lecturer of Law at King Abdulaziz University,IslamicEconomicsInstitute,SaudiArabia. MehmetBulut isProfessorandPresidentatIstanbulSabahattinZaimUniver- sity,Turkey.HeisalsoamemberoftheTurkishAcademyofScience. Miranti Kartika Dewi is Lecturer in the Faculty of Economics, Universitas Indonesia,Indonesia. VelidEfendić isanassistantprofessorattheSchoolofEconomicsandBusiness Sarajevo (SEBS) at the University of Sarajevo, Bosnia and Herzegovina. He is Head of the MA Islamic Banking programme at SEBS and the founder of the EuropeanAssociationofIslamicEconomics,BankingandFinance. Ilham Reza Ferdian is Lecturer in the Faculty of Economics, Universitas Indonesia,IndonesiaandChairmanoftheIslamicEconomicSociety,UK. FikretHadžić isProfessorintheSchoolofEconomicsandBusinessSarajevoat theUniversityofSarajevo,BosniaandHerzegovina.HealsoHeadoftheCentre forIslamicEconomics,BankingandFinance.HeisthefounderoftheEuropean AssociationofIslamicEconomics,BankingandFinance. ix x NotesonContributors Migdat I. Hodžić is a professor in the Faculty of Electrical Engineering and Applied Mathematics at the International University of Sarajevo, Bosnia and Herzegovina. Sabina Ibrahimagić is a senior teaching assistant in the School of Economics andBusinessattheUniversityofSarajevo,BosniaandHerzegovina. HylmunIzhar isaneconomistattheIslamicResearchandTrainingInstituteat theIslamicDevelopmentBankinJeddah,SaudiArabia. Cem Korkut is a research assistant in the Faculty of Economics at Ankara YildirimBeyazitUniversity,Turkey. Ahlidin Malikov is a researcher in business studies at the London School of Commerce,UKandatCardiffMetropolitanUniversity,UK. Tarik Namas is a senior assistant in the Faculty of Electrical Engineering and Applied Mathematics at the International University of Sarajevo, Bosnia and Herzegovina. Nerma Saračević is a PhD candidate in the Faculty of Economics at J. J. StrossmayerUniversityinOsijek,Croatia. Nataša Šarlija is a professor in the Faculty of Economics at J. J. Strossmayer UniversityinOsijek,Croatia. Natalie Schoon CFA is principal consultant at Formabb. She was previously HeadofProductDevelopmentattheBankofLondonandTheMiddleEastplc (BLME). Munira Šestić is a senior teaching assistant in the School of Economics and BusinessattheUniversityofSarajevo,BosniaandHerzegovina. Zlatko Dž. Sijerčić is Senior Decision Scientist, Quant and Analytics Lead at ZDSAssetManagementLLC. Amir Softić is Founding Member and President of the Association of Profes- sional Risk Managers in Bosnia and Herzgovina. He has also been Executive Director and Member of the Management Board at Sparkasse Bank since 1October2010.
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