Sustainable Development Goals and Islamic Finance Abdul Ghafar Ismail Professor of Islamic Financial Economics Faculty of Islamic Economics and Finance Universiti Islām Sultan Sharif Ali Presented at the Brunei Darussalam Islamic Investment Summit, 2-3 August 2017, Jerudong, Negara Brunei Darussalam November 18

How do Multilateral Development Banks View on Development Agenda World Bank looks at economic prosperity IMF looks at financial stability IDB looks at Maqasid Shari’ah November 18

UNDP and Development Agenda Helping countries build and share solutions in three main areas: Sustainable development Democratic governance and peacebuilding Climate and disaster resilience November 18

UNDP and SDGs The ultimate aim of the Sustainable Development Goals, which replaced the Millennium Development Goals in 2015, is to end poverty, protect the planet and ensure prosperity for everyone. Each goal has specific targets that need to be met by 2030 November 18

Sustainable Development Goals November 18

Implémentation of SDGs Mainstreaming: that is helping countries to translate the 2030 Agenda into national (Vision 2035) and local policies, plans and budgets - What does this mean in practice? starting with analysis of the alignment of national plans with SDG targets – but the issue is disaggregated data at sub-national level and capacity issues to track progress (e.g. BD – vision 2035 – MIB; Islamic banks – trying to align with SDG e.g. digital banking) identifying gaps can spur dialogue around policies and partnerships which can help address them Participatory monitoring – Asking people what they think: Using perception data to monitor the SDGs Partnership - The transformative 2030 Agenda can only be achieved if all of society - civil society, business, philanthropy, academia - are engaged, working in partnership with governments at national and sub-national levels.  Nov-18

Implémentation of SDGs Acceleration: “acceleration” tools, i.e., those that enable the identification of synergies and trade-offs across possible interventions that could lead to faster progress across multiple SDGs at the same time Policy Support: asking international agencies (e.g. IDB) for technical expertise in an efficient and coherent manner for improved policies and programming We will look at what has been achieved so far Nov-18

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SDG: Opportunities for Islamic Finance SDGs provides Islamic Finance an opportunity to redefine their role pertaining to (i) people empowerment (e.g., social finance and MSME), (ii) socio-economic development (e.g. profit sharing and poverty), and (iii) the environment (creating new Islamic financial instruments such as green sukuk – green financing and carbon emissions – through sustainable and responsible investments) Opportunity – (i) creating a value-based proposition; (ii) to widen the definition of Islamic Finance – deepening the system, institutions and instruments as given in Constitution of BD; (iii) to expand the Muslim funds as stated in the constitution of Brunei The Global Agenda enhances these possibilities for Islamic Finance as the SDG goals and values have parallels relevance and application with Islamic Finance practice – look at the following slides Nov-18

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Islamic Finance and SDG Indicators How could the Islamic financial system, institutions and instruments be used to influence the indicators? Nov-18

IF & Sustainable Development Goals – A Solution SDGs are ambitious and require all encompassing efforts and involvement of all sorts of institutions. It is especially crucial for countries that are much behind the targets and need considerable effort and resources to pull themselves up to meet the targets. Islamic economic institutions (such as waqf, zakat, sadaqah) which have a socio- economic character can also be employed in creating synergistic efforts towards achieving the sustainable development goals Nov-18

Zakat & Sustainable Development Goals – Example Zakat and Poverty - Zakat system has an inbuilt mechanism to reach the right targets in terms of Zakat collection and disbursement Zakat and Hunger - the redistribution of resources is vital to enhance income as well as the capacity to earn sustainable incomes Zakat in reducing inequality - As per World Bank, there are 767 million people below the poverty line of $1.90/day. Zakat in providing good health and well-being The same also goes to other Islamic revenues as stated in our constitution Nov-18

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SDG: Challenges for Islamic Finance Islamic Finance practices - addressing the compliant and principle issues – there is also a need to address the maqasid al shariah issue and public policy issues Nov-18