KUALA LUMPUR: The flourishing global Islamic finance industry has the potential to provide solutions to eradicating poverty with the industry set to exceed US$3.5 trillion by the end of this year, said the Sultan of Perak, Sultan Nazrin Shah.
He said, however, that 35 per cent of the two billion people facing poverty worldwide were Muslims, despite Muslims making up 22 per cent of the global population.
"I have spoken in the past about the great work already being done with instruments such as sustainable and responsible investment sukuk right here in Malaysia.
"But I believe that we are not yet realising the full humanitarian potential of Islamic social finance.
"The Islamic finance industry as a whole is, after all, due to exceed US$3.5 trillion by the end of this year, yet 35 per cent of the two billion people facing poverty worldwide are Muslims.
"This is despite Muslims comprising 22 per cent of the global population."
He said this in his royal address at the Mercy Malaysia International Humanitarian Conference 2024, here, today.
Also present were Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad and Mercy Malaysia president Datuk Dr Ahmad Faizal Perdaus.
Sultan Nazrin said the prevalence of poverty was disproportionately concentrated in Muslim-majority countries, with 21 per cent of the Organisation of Islamic Cooperation's population living below the poverty line.
"Poverty, as we know, pushes people into crisis. People who live without adequate food, shelter, medical care and infrastructure, so that when other emergencies occur, whether natural or man-made, the consequences are so much worse.
"Now, of course, I believe that Islamic social finance should be targeted to help those in need regardless of their faith.
"But when these mechanisms exist, when the global Islamic finance industry as a whole is flourishing, and yet a large number of Muslims worldwide continue to suffer in poverty, it is clear that more needs to be done to leverage Islamic finance's potential," he said, adding that Islamic finance's potential could be transformative.
Just last year, Sultan Nazrin said, the Islamic Development Bank and the Development Investment Bank of Turkiye had formalised a US$200 million financing arrangement to support businesses affected by the earthquakes and facilitate long-term recovery.
"I believe we need more of these large-scale mobilisations of Islamic finance, combined with technological innovations that improve the collection and targeting of funds such as zakat on an everyday basis.
"Platforms like Ethis, (Yayasan) Hasanah and the Maybank Islamic Mosque Adoption Programme are great examples of fintech solutions already in action and I would like to see more of this going forward."
Sultan Nazrin said while wars and conflicts remained the biggest cause of humanitarian crises around the world, climate change was being increasingly linked to conflicts and human displacements.
He said environmental issues were a rapidly growing cause of humanitarian suffering and called upon all to be responsible for addressing the problem.
"Yes, improving climate resilience requires some large-scale scientific interventions, for example, better early warning systems for approaching disasters.
"It requires not only humanitarian diplomacy but also high-level diplomatic efforts to reduce carbon emissions across the world.
"But it is also something we can all be more conscious of in our day-to-day lives, taking actions to reduce our carbon footprints and remembering that, by doing so, we are contributing not only to an environmental effort, but a humanitarian one as well," Sultan Nazrin added.