There is thus an explicit emphasis on the economic viability of the underlying assets and on good governance, ethics and transparency. It is these very elements of Islamic finance that provides an in-built mechanism that enhances the prospects for its soundness and stability. BIS Review 141/2009  1  As Islamic finance evolves to meet the changing requirements of businesses and consumers, innovation is integral to the development of new Islamic financial products and services. It is recognised, however, that unfettered financial innovation can become a major source of instability. In Islamic finance, innovation must be tested against the objectives of the Shariah, where the primary objective is the realisation of benefit to the people. This demands the internalisation of Shariah principles in Islamic financial transactions, both in form and substance. Indeed, Shariah-based innovation brings with it a Shariah-compliant culture in the Islamic financial institutions that serves to ensure that the product development process incorporates ethical value propositions. A central bank's perspective From a Central Bank's perspective, ensuring financial stability of the Islamic financial system is the paramount objective. Integral to the efforts in the development of Islamic finance, is therefore, the strengthening of the regulatory and supervisory framework. The Islamic Financial Services Board (IFSB) which was established in 2002 has been instrumental in developing and issuing global prudential standards and guiding principles for the industry. This has included capital adequacy requirements, to governance and risk management standards. The IFSB has also contributed to the harmonisation in the development of Islamic finance across different jurisdictions.

This was followed by the setup of the Infrastructure Finance Centre of Excellence (IFCOE), which carries out capacity building and technical assistance to increase the success of PPP in the region. Last month, IE Singapore and the Asian Development Bank jointly launched a PPP initiative that will work with regional governments to structure infrastructure projects, and also explore using capital markets to finance these projects. Enhancing project development expertise Besides improving PPP processes and public sector expertise, we also need to enhance the human capital in the private sector. There is already a growing base of professional services in Singapore with practices in infrastructure development, financing and public-private partnerships in Asia. Singapore could explore whether there is a need to help companies develop their project development talent pool, so they can harness opportunities in the regional infrastructure space. This could be done by supporting on-the-job training to accelerate talent development through more project experience, and creating specialised programmes to train talent to be equipped with knowledge across the project development process – from business development, to PPP structuring, to financing. Conclusion Ladies and gentlemen, let me conclude by outlining again three key priorities in increasing and broadening private sector participation in infrastructure development – first, to catalyse private sector involvement in project financing; second, to enhance delivery of projects for better financial viability; third, to build up capabilities in both public and private sectors.