Special endowment project to develop halal resort in Maldives

The Asian region is home to some of the largest Muslim populations in the world. Indonesia is the largest Muslim country in the world in terms of population size while India comes next. Countries small in terms of population size like the Maldives, an island nation in the Indian Ocean, also show a strong Islamic character with a 100 percent Muslim population. It is estimated that by 2020, over 60 percent of the global Muslim population will be in Asia. Thus all indications are that the Asian region is going to be the next great frontier for the growth of Islamic Finance. This is already happening in a big way in Malaysia which is fast increasing its share of Sharia-compliant assets vis-à-vis conventional assets. Other players in the region such as the Maldives are also fast adopting Islamic Finance for an array of different applications while the trend towards the industry in countries like Sri Lanka is being reflected in the positive perceptions people have of the sector. In this segment, we focus on three countries that are pursuing Islamic Finance with great vigour- Malaysia and Maldives which are largely Muslim countries and Sri Lanka, a predominantly Non-Muslim country with a significant Muslim population. The papers contributed by the leading scholars of the region include a novel initiative based on Waqf in the Maldives, case studies of CSR in Malaysia’s leading banks and a Survey of Perceptions of Islamic Finance in Sri Lanka.
Maldives is a hundred percent Muslim country with a population of less than four hundred thousand. The country generates its income from tourism and depends heavily on imported goods. In March 2015, the government of Maldives created the Maldives Centre for Islamic Finance (MCIF) to strategize Maldives as a hub for Islamic Finance and Halal Industry in South Asia. This is a separate legal entity owned hundred percent by the government of Maldives. Unique Proposal MCIF is preparing to undertake a special endowment project to develop Islamic tourism for the very first time in the country of which the revenue generated will be used to fight against poverty and promote Islamic microfinance for the poor and vulnerable population in the country. MCIF has already proposed the idea to a multilateral financial institution that will join hands in the project as equity partners. This project will create a sustainable sovereign wealth fund to alleviate poverty in Maldives and in the region. The government of Maldives will provide suitable island to develop the proposed project which should not only help in poverty alleviation in the country, but also prove the practicality of Islamic tourism in Maldives and in South Asia. This proposed project will be a landmark project in the South Asian region and will definitely, if successful, assist the needy to upgrade their livelihood via Islamic finance. The ethical and universal principles of Islamic finance will be reflected in its true sense practically via this project. We will here give an overview of the project. The Maldives does not have absolute poverty but only relative poverty. Hence a financial boost should make a big difference in the quality of life and potential to climb back out of poverty. Win-Win Situation In the proposed project, the government of Maldives will provide a an island as an endowment to develop an Islamic resort and the investor in the project will contribute equity in developing the resort and a profit sharing ratio will be agreed between the government of Maldives and the investor where the profits generated from the project will be utilised for poverty alleviation purposes by both parties.
The proposed project entails the construction and development of an Islamic Resort in an island of the Maldives, tourism being a most profitable industry in this island nation. The return on investment is very high and time for recovery is short. The average cost for developing a resort island is about 50 million USD. MCIF proposes that the revenue generated from the Islamic tourist resort will be used for poverty alleviation efforts in the country via Islamic finance mechanisms. With the portion of revenue received for the government of Maldives, the government via MCIF will create a sovereign wealth fund to assist poverty alleviation in the country and in the region, in the long run. The broad areas in which the government intends to focus on to alleviate poverty are human development in education and health sector, agriculture and rural development, microfinance and empowerment of women. Islamic Economy The proposed project aligns well with the objective of Islamic economy in the area of endowment development and also on social and human development via Islamic finance. The project will also be a pilot project to prove the viability of Islamic tourism in Maldives and in South Asia. Furthermore, this proposed project will be a profit generating project that will assist the investors involved to grow their capital while at the same time enabling the government of Maldives to take its first step to create a sovereign wealth fund to alleviate poverty. It is hoped that this very promising project will commence soon and provide the opportunity to demonstrate not only the practicality of Islamic tourism, but simultaneously see a growing fund that will be used to fight poverty.

Source: http://iftmagazine.com/region-segment-focus-on-asia-maldives/