Federal Minister for Finance and Revenue Muhammad Aurangzeb emphasized the transformative potential of Islamic finance and capital markets in driving Pakistan toward macroeconomic stability and sustainable growth. Speaking virtually at the Second International Islamic Capital Markets Conference & Expo in Karachi, he highlighted the critical role of Shariah-compliant financial instruments in fostering an inclusive and resilient economic ecosystem.
Aurangzeb acknowledged Pakistan’s recent economic challenges and reaffirmed the government’s commitment to stabilizing the economy. He stated that the country is on the right trajectory toward achieving macroeconomic stability and sustainable growth. The Minister underlined the importance of leveraging Islamic financial tools such as sukuk, equity funds, and other Shariah-compliant investment vehicles to attract both domestic and international investment. These instruments, he noted, can help mobilize resources for vital sectors like infrastructure and poverty alleviation while reducing reliance on conventional, interest-based borrowing.
The Finance Minister shared that as of June 30, 2024, significant progress has been made in integrating Shariah principles into Pakistan’s financial markets. Over half of the Pakistan Stock Exchange’s market capitalization comprises Shariah-compliant securities. Similarly, nearly half of mutual fund assets, two-thirds of voluntary pension funds, and the vast majority of real estate investment trusts operate within a Shariah-aligned framework. These developments, according to Aurangzeb, demonstrate the growing alignment of Pakistan’s financial system with Islamic principles, paving the way for ethical and inclusive economic growth.
Aurangzeb further highlighted the increasing global demand for Shariah-compliant financial products, driven by a shift toward ethical and sustainable financial systems. He expressed confidence that Pakistan has the potential to become a leading hub for Islamic finance by capitalizing on this trend. He also pointed to the creation of a comprehensive Islamic finance ecosystem, which engages market participants across various sectors and meets the rising demand for Shariah-compliant investment options.
The Minister called for collaborative efforts among scholars, financial institutions, regulators, and industry practitioners to overcome challenges, develop innovative financial products, and enhance public trust. He stressed the need for Islamic finance to be practical, transparent, and capable of addressing the evolving needs of the population.
Aurangzeb commended the Securities and Exchange Commission of Pakistan (SECP) for its efforts in advancing Islamic finance in the country. He acknowledged the SECP’s role in establishing Shariah-compliant indices, introducing governance frameworks, and developing guidelines for Islamic financial services. Encouraging the SECP to continue its work, he emphasized the importance of innovation and inclusivity in strengthening the Islamic capital market.
The conference, attended by prominent global and domestic figures, including Shaikh Ebrahim Bin Khalifa Al-Khalifa, Chairman of the AAOIFI Board of Trustees, and Dr. Sami Al-Suwailem, Acting Director General of the Islamic Development Bank Institute, highlighted Pakistan’s growing commitment to fostering a robust Islamic finance ecosystem. The event underscored the government’s vision of positioning Islamic finance as a cornerstone of the nation’s economic future, paving the way for sustainable and ethical financial practices.