The IMF has highlighted that global banks and financial institutions have yet to recognize more than half of their total estimated write-downs of $ trillion. So far, growth has been supported by the massive monetary and fiscal stimulus. Indeed, studies of past crises suggest that economic recoveries in the aftermath of financial crises tended to be protracted. Many analysts therefore expect global growth to be slower in the coming years. 5. Against this backdrop, what should be the growth strategies of emerging economies, and what is the role of financial institutions, especially Islamic financial institutions? 6. Even with slower global growth, emerging Asian and Middle Eastern economies are expected to grow at higher rates than advanced economies. There are many positives working in their favour – abundant natural resources and monetary reserves; young and dynamic populations, growing consumer demand, large infrastructural programmes underway in some areas like water, energy, transport, education and healthcare. Generally, balance sheets of corporates and households are in better shape than it was in earlier years. 7. With the growing importance of emerging economies, we will see changes in the patterns of trade and development. There will be stronger “south-south” trade. The old pattern of “flying geese” development in Asian newly-industrialised economies, where developed economies bring in investment and technologies, will give way to a more variegated pattern, where companies in the emerging markets will invest in other markets. We already see many corporates from emerging markets developing disruptive technologies and business models that address market needs in very competitive ways.

The establishment of the international standard setting organizations such as the Islamic Financial Services Board (IFSB) and the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), to formulate appropriate prudential and accounting standards that would not only facilitate the process of harmonisation but also contribute to the strengthening of the Islamic financial system. The IFSB has already formulated the prudential treatment for sukuk investment by the Islamic financial institutions as stipulated in the Capital Adequacy Standards. Malaysia's strength in the sukuk market Let me now turn to Malaysia's sukuk market. Significant progress has been achieved in the development of the Malaysian sukuk market. In 2007, Malaysia accounted for about twothirds of the global sukuk outstanding, amounting to about USD47 billion. Malaysia not only represents the largest sukuk market in terms of outstanding size, but also in terms of number of issuance. In developing the sukuk market, Malaysia provides a total solution for sukuk activities by providing a complete sukuk issuance and trading platform, that is supported by four elements: a wide range of Islamic instruments, strong legal and regulatory infrastructure, sound Shariah governance framework and the talent supply. These elements are also further strengthened by Malaysia's comprehensive Islamic financial system with all the key components of the financial system comprising the Islamic banking, takaful, Islamic money and capital markets that are now at an advanced stage of development.