year 2000. in asia too, firms and – 3 – markets should focus energy on preparing for year 2000. the events of the last eighteen months have probably distracted their attention from this problem. however, as we get closer to the end of this year, market participants will require more information on the year 2000 preparations of counterparties. those that are not prepared, or do not disclose their state of preparedness, may find that credit is harder to obtain. it is in everyone ’ s interest that we not become complacent as we face this last twelve months before the start of the new millennium. observations and open issues from recent experiences against this backdrop, i want to raise four issues important to the conduct of monetary policy for your consideration and study. the first two issues involve the supply side of the economy and grow out of the unusual conjuncture in recent years of rapid growth and high resource utilization with low, if not declining, inflation. one is the proper measurement of resource tightness. the two standard measures of resource tightness, capacity utilization in manufacturing and the rate of unemployment, have historically moved fairly closely together over the cycle. however, they have diverged in the past several years, in part as the surge in investment has helped to lower capacity utilization in the manufacturing sector while labor markets have become tighter and tighter. we need a better understanding of the causes of this divergence, and, if it persists, a clearer sense of which measure of resource utilization best foreshadows the emergence of price pressures. a second, and related, issue is whether the nature of “ capacity ” has changed. many observers have argued that in the 1940s and 1950s manufacturing capacity was more normally characterized by large - scaled units of fixed machinery, such as blast furnaces and assembly lines. this capacity took long lead times to manufacture, test and install, so available capacity was easier to measure and slower to change. therefore, high levels of capacity utilization were good predictors of resource tightness that was likely to translate into pricing pressure. now, we hear, capacity in manufacturing is more technology intensive and can be adjusted more easily to reflect supply and demand conditions. this relatively “ elastic ” supply of manufacturing capacity implies that capacity utilization may not become “ tight ” by historical standards, and capacity utilization is therefore a less certain early warning signal of potential pricing pressure. i have seen no proof of the assertion that the nature of manufacturing capacity has changed, although the experience of the last several years suggests that this

in islamic finance ( inceif ) in malaysia in 2006 represents a structured investment in human capital development to support the global development of islamic financial services industry. it is envisioned that inceif will act as a professional certification body as well as an education centre for specialised post - graduate programmes in islamic finance. distinctive features of islamic finance while islamic finance has continued to evolve, the distinct features remain fundamental. islamic finance is required to operate in accordance with the rules of shariah from which it derives its unique characteristics. the shariah injunctions require that the islamic financial transaction be supported by an underlying economic activity. this requires that the financial transaction must be accompanied by a genuine trade and business related activity. based on this arrangement, interest - based transactions are prohibited. islam encourages business and trade activities that generate a fair and legitimate profit. in islamic finance, there is therefore always a close link between the financial and productive flows. this intrinsic principle contributes towards insulating the islamic financial system from potential risks of financial stress resulting from excess leverage and speculative financial activities. a further fundamental principle of islamic finance is the risk and profit sharing feature of islamic financial transactions. this could involve an arrangement whereby the islamic financial institution shares profit with the investor in a mudarabah contract or in a musyarakah contract, both parties share in the profit or loss. these arrangements involve an explicit sharing of the risks by the islamic financial institution and the investor, thus requiring sources : islamic finance news, islamic financial services board & national authorities. the trend is now to have both " shariah savvy financial practitioner " and " financial savvy shariah scholars ". the islamic financial institution to appropriately manage the risks associated with the transaction. it entails the appropriate due diligence and the integrating of the risks associated with the investment activity into the financial transaction. the real activity is thus expected to generate sufficient wealth to compensate for the risks. it is from this profit and risk sharing feature of islamic financial transactions that a high level of disclosure and transparency is required. this represents a basic tenet underlying all islamic financial transactions. there is an inherent obligation to meet the appropriate standards of transparency. the accountabilities of the respective parties involved in the transaction are also clearly defined in the contract. these disclosures also allow the market to assign the appropriate risk premiums to the respective companies thereby enhancing the potential for market discipline to take effect. these intrinsic features as required by the shariah injunctions provide