between levels of financial development and capability, as well as foster deeper regional ties in africa. this first event in islamic finance, which we are starting this morning, has generated a lot of interest among all stakeholders. the response has been simply overwhelming and bears testimony to the eagerness of each and everyone here to learn more about islamic finance. we are acutely aware of the need to build up rapidly a local pool of experts in islamic finance. seminars such as these provide the appropriate platform for sharing and developing expertise. a bridge has been created between the ifsb and mauritius and we hope to be able to organize other seminars and workshops in future. we are confident that this will create the necessary synergies to enable islamic finance to gather momentum in our part of the world. regulatory challenges for islamic finance the ethical dimension of islamic finance is an essential ingredient for its success. what matters even more to us in mauritius is its smooth integration with the rest of the financial system. this hinges on a sound regulatory framework embedding best international practices. there is no denying that there are regulatory challenges facing the islamic finance industry in mauritius. as is the case in any burgeoning enterprise, some of the real challenges are still in the domain of the unknown. the experience of other jurisdictions provides us with precious insights and helps us to avoid certain pitfalls. indeed, this is not the case only with islamic finance, but applies to the entire financial sector. in this sense, the global financial crisis can have a salutary effect. it serves as a wake - up call for modern finance to review the regulatory apparatus, in terms of our operating framework, processes and procedures. standardisation with regard to islamic finance laws and regulatory practices and the interpretation of the sharia, is an essential ingredient in increasing the marketability and acceptance of islamic products. there is a need to foster greater transparency and credibility. the work of international institutions such as the ifsb and the accounting and auditing organisation for islamic financial institutions on the harmonisation of standards is absolutely crucial. there is one key aspect in which there is absolutely no difference in our regulatory approach to islamic finance as against our approach to conventional finance. and this is our uncompromising and steadfast adherence to global prudential standards and the adoption of international best practice for risk management and corporate governance. additionally, we want to achieve a smooth integration with the conventional financial system. while doing all this, we must bear in mind that islamic finance is just finance – it

is higher than the export processing zone, which will account for 7. 4 per cent. and it is of course much higher than the sugar sector, whose contribution to gdp is forecast at 3. 3 per cent. how has the sector come to occupy such an important place in the local economy? how is it structured to play such a leading role? there are 19 banks and 13 non - bank financial institutions licensed to transact deposit - taking business. three new banks should open by the end of this year as the banking licenses granted at the end of last year are operationalised. there are currently nearly 160 branches and 329 atm ’ s, which leads some observers to jump to the erroneous conclusion that we are overbranched and overbanked. the sector is marked by a very high degree of market dominance, with the two largest banks, both domestically - owned, controlling around 70 % of rupee deposits, with the next two, both among the top ten international banks, accounting for slightly above 20 %. there are also many other international banks who are relatively new to mauritius, and who have brought in their own special expertise and financial sophistication, and are busy carving out a lucrative niche for themselves in this allegedly overbanked country. they are playing a very welcome role. they increase competition. they give the established players a run for their money. this is good for the domestic consumer. it dampens any tendency towards cartelisation which could otherwise be encouraged by the market dominance i referred to earlier, with the smaller players slipping comfortably into “ follow - the - leader ” mode. internationally, the presence of these foreign banks raises the profile of the country, enhances its reputation and reinforces its role as an offshore financial centre. i look forward to the three new bank licensees entering this dynamic financial landscape, with their own business models and their complementary financial products and services. all in all, we should have a very interesting year! let me now touch briefly on how the mauritian economy is coping with the challenges of globalisation and adapting to life in the post - lome and post - cotonou world. a less resilient country would no doubt have been tottering under the impact of the triple shocks that have hit the economy, namely the dismantling of the preferential price for our sugar exports under the sugar protocol, the erosion of trade preferences in textiles, and the surge in oil prices. the factor - intensive, export - oriented growth strategy