With an esteemed gathering of top leaders, experts, and policy makers in the field of Islamic economy, the 4th AlBaraka Forum Regional Conference was held on January 28th 2024 at Marriott Hotel, Karachi, Pakistan, under the theme “Sukuk for Sustainable Development: International Best Practices”. Organized by AlBaraka Forum for Islamic Economy, in collaboration with the Islamic Chamber of Commerce and Development (ICCD), and with the platinum sponsorship of Al Baraka Bank Pakistan, this landmark event highlighted the transformative role of Islamic finance, particularly Sukuk, in driving sustainable economic growth.
Event Day – January 28th 2024
Opening Ceremony
By deep welcoming words Madam. Shaista Ayesha, Chief Executive Officer at SEED Ventures, launched the beginning of the 4th AlBaraka Forum Regional Conference – Pakistan 🇵🇰 “Sukuk for Sustainable Development: International Best Practices” as the MC of the conference she reflected the importance of this conference mentioning its potential impact on a sustainable and ethical economy
The conference’s events were inaugurated with a beautiful recitation from the Holy Quran by Hafiz Muhammad Saad.
Followed by H.E Mr. Yousef Hassan Khalawi, Secretary General, Albaraka Forum for Islamic Economy, highlighting Pakistan’s pioneering role in Islamic finance, which began in the 1960s and 70s. He emphasized the country’s role in shaping ethical finance and called for collective efforts to position Pakistan as a global leader in this field. H.E. Mr. Khalawi also discussed the importance of Sukuk as a key initiative for sustainability, urging the Islamic world to unite in applying this tool to address global challenges.
H.E. Mr. Saleem Ullah, Deputy Governor of the State Bank of Pakistan, delivered the keynote speech, emphasizing AlBaraka Forum’s role in addressing sustainable development challenges. He discussed the core principles of Islamic finance, focusing on fairness, equity, and addressing income inequality. Mr. Saleem highlighted initiatives by the central bank, including the 2017 green banking guidelines and the 2023 green taxonomy project, aimed at promoting sustainable investment and mitigating environmental risks.
Moving forward, H.E Prof. Ahsan Iqbal, The Federal Minister for Planning, Development & Reform,, delivered a keynote address through a visual video presented in the conference hall, highlighting the growing Islamic banking sector in Pakistan and the need to expand sukuk availability. He emphasized that sukuk, rooted in Islamic finance principles, is crucial for both private and government sectors to invest in shariah compliant instruments. Prof. Ahsan stressed the importance of collaboration between the government and Islamic banks to overcome challenges and enhance sukuk’s role in the global financial market.
As key points arise, H.E. Mr. Akif Saeed, Chairman of the Securities and Exchange Commission of Pakistan (SECP), delivered the keynote at the conference, emphasizing the importance of this year’s theme amidst global economic, environmental, and social challenges. He highlighted sukuk as a key Shariah-compliant financing tool for sustainable development. He mentioned that Indonesia has issued green sukuk to raise billions of dollars for renewable energy projects and sustainable infrastructure, also referred to Saudi Arabia, as red sea development company issued sukuk to finance a landmark regenerative tourism project.
Followed by H.E. Mr. Zafar Masud, Chairman of the Pakistan Bank’s Association (PBA), who delivered a keynote speech presented in a video form during the opening ceremony, highlighting that sukuk currently makes up 18% of Islamic financing products. He referenced success stories from Turkey and Indonesia, showcasing their diverse sukuk structures and achievements, such as Indonesia’s $577 million retail sukuk for reforestation. H.E. Mr. Zafar also discussed Pakistan’s transition to full Islamic banking, noting challenges such as the lack of standardized sukuk structures, transparency issues, and raising awareness, while emphasizing opportunities like mobilizing private capital and leadership in creating awareness.
Hon’ble Mr. Justice Syed Mansoor Ali Shah, Senior Puisne Judge of the Supreme Court of Pakistan, addressed climate change as Pakistan’s most pressing threat, noting its devastating effects in the global south, including droughts, water scarcity, and flooding. Despite Pakistan’s minimal contribution to global greenhouse gas emissions, it remains highly vulnerable. He stressed the need for Pakistan to focus on adaptation, highlighting key areas like water security, agriculture, and disaster risk reduction. Justice Shah emphasized that without adaptation, Pakistan could face severe consequences, as mitigation efforts have already failed.
As an expression of thanks and appreciation, H.E. Mr. Yousef Khalawi, Secretary General of AlBaraka Forum for Islamic Economy honored the opening ceremony speakers beside H.E. Mr. Muhammad Atif Hanif, Chief Executive Officer, Al Baraka Bank, Pakistan, representative for Al Baraka Bank, Pakistan, as a platinum sponsor for the conference.
Following the keynote addresses, a video was featured showcasing the historical evolution of Sukuk, from its origins as a tool for trade obligations to its development into a modern global financial instrument blending Islamic principles with contemporary finance.
The first session “SUKUK AND THE DEVELOPMENT OF MACROECONOMIC SECTORS”
Bringing his discussing skills on stage, Mr. Syed Faraz Anwer, Partner Advisory and Consulting, PWC Pakistan, moderated the first session, expressing his excitement to see this diversified representation of both Islamic and conventional banking industry in the conference, that could assist in the conversion process, referring to the importance of discussing this topic.
H.E Mr. Irfan Siddiqui, Founding President and Chief Executive Officer, Meezan Bank, highlighted 172 Sukuk issuances since 2020 and Meezan Bank’s collaboration with key banks and the government for regular Sukuk issuance. Mr. Irfan also noted the Federal Shariat Court’s 2022 decision for Pakistan’s full conversion to Islamic banking in 5 years and the constitutional amendment requiring the transition to an Islamic economic system by 2028. Adding that As Sukuk offers a unique investment avenue with distinct risk profiles, effective risk management is crucial for both issuers and investors.
H.E. Mr. Rehmat Ali Hasnie, President & Chief Executive Officer, National Bank of Pakistan, addressed the role of Sukuk in converting conventional banks to Islamic banks, stressing that government security availability is crucial for this transition. He emphasized that the responsibility for Sukuk should not fall solely on the government or local banks, but rather be a collective effort involving all stakeholders.H.E. Mr. Hasnie also highlighted the need for intellectual and community support in the transformation of Pakistan’s banking system to fully embrace Islamic finance.
H.E. Mr. Muhammad Atif Hanif, Chief Executive Officer, Al Baraka Bank, Pakistan, then highlighted AlBaraka Bank’s global presence and contributions to Islamic banking as pioneers in this field. He praised AlBaraka Forum for promoting the concept of Islamic finance and emphasized the bank’s focus on creating synergies for Pakistan’s Islamic economy. H.E. Mr. Hanif noted the rapid growth of Sukuk, now valued at 5 trillion rupees, while addressing challenges such as rising domestic debt, which has increased from 26 trillion rupees in 2021 to 47 trillion rupees.
H.E. Mr. Basir Shamsie, President & Chief Executive Officer, JS Bank, addressed the topic “Sukuk as a Global Investment Instrument: Exploring Cross-Border Capital Flows and Economic Development,” during his presentation, H.E. Mr. Basir shed light on the importance of enabling corporates to access finance, noting the significant opportunities in the Pakistani market.
Followed by H.E. Mr. Yousef Khalawi, Secretary General of AlBaraka Forum for Islamic Economy honoring the first session speakers
Keynote Address
H.E. Mr. Farrukh Sabzwari, Chief Executive Officer, Pakistan Stock Exchange – PSX, discussed the current state of Sukuk listings at PSX, noting that while government Ijarah Sukuk are listed, they are not tradable. He highlighted efforts to encourage trading and emphasized Pakistan’s position globally in Sukuk issuance. Mentioning Malaysia, Saudi Arabia, and Indonesia as leaders in Sukuk issuance, with Malaysia holding the top position, issuing 30% of global Sukuk
In recognition of his valuable contribution, H.E. Mr. Muhammad Atif Hanif, Chief Executive Officer, Al Baraka Bank, Pakistan, presented a certificate of appreciation to H.E. Mr. Farrukh Sabzwari, Chief Executive Officer, Pakistan Stock Exchange – PSX, for delivering the keynote address.
The Second Session “SUKUK: NATIONAL AND INTERNATIONAL EXPERIENCES AND BEST PRACTICES”.
From his dedication to create a fruitful informative session, Mr. Muhammad Farhan Ul Haq Usmani, Executive Vice President and Head of Shariah Audit and Advisory, Meezan Bank Limited, moderated the second session of the conference, praising the insightful discussions on Sukuk as a key tool for sustainable development and growth, highlighting the importance of the session and its distinguished guests.
As the focus broadens, Mr. Azhar Aslam, Country Head Islamic Banking (Saadiq) / Governance Head Centre & North, Standard Chartered Bank, discussed global developments in sovereign Sukuk, using Saudi Arabia’s Sukuk program as a key example. He highlighted the country’s 2017 unlimited SAR-denominated Sukuk Program aimed at diversifying funding. Mr. Aslam also presented case studies, including Pakistan’s PKR 35.54 billion Local Currency Sukuk Program in 2008, where SCB collaborated with the State Bank of Pakistan to structure the Islamic Treasury Program and ensure Shariah compliance.
Mr. Ijlal Ahmed Alvi, Chief Executive Officer, Secretary to The Board and Spokesperson of The International Islamic Financial Market (IIFM). emphasized the importance of the consultative phase in identifying key issues and setting direction. Reflecting on 2008, he highlighted discussions around Sukuk’s legal structure and revenue generation, stressing the need for transparency. He underscored IIFM’s role in advancing the industry and the importance of continuously updating high-quality standards, especially for international banks, which can serve as a model for other institutions.
Mr. Imtiaz Gadar, Chief Executive Officer, Al Meezan Investment Management Limited, discussed leveraging mutual funds to expand Sukuk investments, focusing on short-term Ijarah Sukuks as Shariah-compliant alternatives to conventional treasury bonds. He highlighted their role in the Islamic asset management industry’s growth adding that one of the key challenges in meeting the rising demand for Sukuks is paucity of clean tangible assets to back the prevalent Ijarah Sukuk structure
Prof. Mohammad Kabir Hassan, Professor of Finance at University of New Orleans – USA and Hamid Habib Chair Professor at Institute of Business Administration (IBA), discussed challenges in the Sukuk market, including regulatory harmonization and gaps in Shariah structuring expertise. He noted that in 2023, the total Sukuk value reached $863 billion, with Malaysia dominating 40-45% of global issuances, followed by GCC countries (Saudi Arabia, UAE, Qatar) with 35-40%, and other markets like Indonesia, Turkey, Pakistan, and the UK contributing 15-20%.
As an expression of thanks and appreciation, H.E. Mr. Muhammad Atif Hanif, Chief Executive Officer, Al Baraka Bank, Pakistan, honored the second session speakers
The third session “SUKUK ISSUANCE EXPERIENCE FROM LEGAL AND SHARIAH ASPECTS”.
With a significant negotiation skills and conversational talents, Prof. Shafiullah Jan, Tenured Professor and Head Centre for Excellence in Islamic Finance, Institute of Management Sciences, (IM|Sciences), moderated the third session
Mufti Dr. Irshad Ahmad Aijaz, Chairman, Shariah Advisory Committee, State Bank of Pakistan, stated that there are more than 15 type of sukuk, highlighting the challenges in launching Sukuk due to differences in legal and operational frameworks across countries, noting that Pakistan’s domestic laws, influenced by federal and provincial structures. He emphasized that while Ijarah Sukuk is commonly used, the legal environment plays a crucial role in determining Sukuk structures.
As the focus broadens, Dr. Muhammad Imran Ashraf Usmani, President and CEO of Usmani & Co. Pvt. Ltd, praised the experts at the conference for sharing valuable insights. He provided an overview of Sukuk practices in Pakistan and internationally, noting that most financial institutions use securitization for Sukuk issuance, similar to government bonds. He highlighted that Islamic Sukuk accounted for 3% of total issuances in the past few months.
Mr. Tariq Naseem, Head Islamic Finance Department, The Securities and Exchange Commission of Pakistan (SECP), discussed efforts to identify gaps in Pakistan’s regulatory and legal framework for Sukuk through stakeholder consultations. He noted that all sovereign Sukuk issued by Pakistan have followed the Ijarah structure. Mr. Naseem emphasized the need to enable the use of multiple Sukuk structures and announced that, since December 2023, sovereign Sukuk were issued and listed on the Pakistan Stock Exchange.
Followed by H.E. Dr. Umar Oseni, Secretary General, the Organization of Islamic Cooperation Arbitration Centre (OIC-AC), who shared insights from his experience as the former CEO of IILM, where they issued an average of 1 billion USD in Sukuk monthly. He discussed the importance of having expertise in Shariah, legislation, and finance for effective Sukuk structuring. H.E. Dr. Umar focused on secondary market liquidity and exploring new concepts such as digitization, crypto, and blockchain to transform the Sukuk industry.
As a gesture of gratitude, Ms. Aalia Jafar, Director, International Relations, The Islamic Chamber of Commerce and Development (ICCD), honoured the speakers of the 3rd session
Concluding with Ms. Aalia Jafar, Director, International Relations, The Islamic Chamber of Commerce and Development (ICCD), who delivered the closing remarks of the 4th AlBaraka Forum Regional Conference, expressing her satisfaction with the event’s success and congratulating AlBaraka Forum and AlBaraka Bank for their efforts. She highlighted key takeaways from the conference, emphasizing the importance of value creation for stakeholders, the need for self-financing, Pakistan’s potential to lead the Islamic economy, and the realistic expectation that a 100% transition to an Islamic economy by 2028 may not be fully achieved but is still a worthy goal as long as the intent remains strong.
Ending up with Ms. Ghada Khalafallah, Manager of Communications and Media, AlBaraka Forum for Islamic Economy, honoured Madam. Shaista Ayesha, Chief Executive Officer at SEED Ventures, as the MC of the conference and Ms. Aalia Jafar, Director, International Relations, The Islamic Chamber of Commerce and Development (ICCD).