We have expected that the import pattern would gradually become more stable, but if the shift continues, the price-dampening effects of increased imports from low-cost countries in Asia and Central and Eastern Europe may persist longer than assumed. The change in China’s exchange rate regime in July, with a 2 per cent revaluation of the Chinese currency, may over time have an impact on price developments for imported consumer goods. The global economy Economic growth among trading partners appears to be somewhat lower this year than in 2004. In the years ahead, growth is expected to be relatively stable. The outlook for growth in different regions indicates that the imbalances in the global economy, with a large deficit in the US and large surpluses in a number of other countries, will persist. There are particularly large imbalances both in the US balance of trade and current account. Persistent trade deficits have pushed up US foreign debt to a high level. This is partly due to the federal budget deficit. Moreover, US households have a high level of consumption and a low level of saving. This may be related to a more rapid rise in the US population than in other OECD countries. This suggests in isolation that saving in the US is somewhat lower and investment somewhat higher, but the impact is now considerably greater than implied by demographic factors alone. The imbalances may persist, and may increase. International capital markets are deep and liquid with an ample supply of credit for US borrowers.

Undergraduate opportunities to study Islamic finance or Shariah, either as a speciality or a major component of a business degree, should be readily available at local and foreign universities. The challenge is to provide programmes which keep pace with changes in financial innovation and technology. Meeting this need requires rigorous, extended programmes such as the post-graduate programmes in Islamic Finance and Financial Engineering with emphasis on Islamic banking principles. At the same time, relevant organizations can support such programmes by creating funds to sponsor promising students to pursue formal education, ranging from modular courses in Islamic finance to full post-graduate programmes. There is also a need to increase programmes and initiatives that provide education and training in Shariah. Islamic research organizations and financial institutions need to work towards developing a sufficient number of competent Shariah scholars who are equipped with sound knowledge and expertise in both Islamic jurisprudence and Islamic commercial laws to deal with innovative and cutting-edge products. There is also the need for extensive education of the consumer and business community. This would increase the outreach resulting in increased demand for new and innovative products and approaches. Malaysia has implemented a 10-year structured consumer education programme to increase the level of consumer awareness on the unique characteristics of Islamic financial products and the product choices offered by Islamic financial service providers. Increased awareness will drive the demand for a broader range of Islamic products and services customized to their requirements at more competitive prices and through more convenient channels.