Editorial

Abstract

Editorial In the name of Allah, most gracious, most merciful

In the early years of the Islamic finance industry, an attempt to implement the Islamic economic system via the top-down approach was made by three countries in the 1980s, notably Iran, Sudan and Pakistan. To date, Iran continues to be the top country with the highest Islamic finance assets, albeit following a different jurisprudential school than that of the Sunnis, the Jafari School. Pakistan and Sudan faced challenges in implementing a fully Islamic system and instead joined the majority of the countries that practice Islamic finance through the dual financial system where Islamic financial institutions operate side by side with their conventional peers.

Within the dual financial system, it is crucial that the government supports the development of Islamic finance for the industry to flourish. One of the ways that governments have shown their commitment is by setting out their national strategies for Islamic finance development in financial sector blueprints, roadmaps or masterplans. The masterplans of key Islamic finance countries such as Malaysia, Indonesia and Saudi Arabia, among others, are popularly examined by stakeholders to understand the strategic thrusts the regulators of the respective countries are leveraging on to drive the Islamic finance sector. In January 2022, Bank Negara Malaysia set out the development priorities of the Malaysian financial sector for the next five years in its Financial Sector Blueprint 2022–2026. It considers value-based finance, sustainable/green initiatives, social finance and digitalization as main strategies for advancing Islamic finance leadership in Malaysia.

DOI: https://doi.org/10.1108/IJIF-06-2022-257