in islamic finance, the international shariah research academy ( isra ) was established this year to conduct applied shariah research on the contemporary islamic finance issues. isra also provides a platform that promotes active engagement and dialogue among global shariah scholars that promote mutual respect in shariah and the convergence of views from different jurisdictions in the global islamic financial system. the third strategy is to promote greater financial integration with the global islamic financial system. the malaysian islamic financial system has also been progressively liberalised to allow for increased foreign entry and participation in our financial system, thus facilitating greater cross border flows and thus strengthening the international financial inter - linkages. this has taken the form of issuance of new licences and increasing foreign participation in both islamic banks and takaful companies to 49 %. new licences were also issued to foreign fund managers and foreign stockbrokers. in this new phase of development for islamic finance, malaysia as an international islamic financial hub, has increasingly become a meeting place for businesses from different parts of the world that need to raise funds and for investors that have surplus funds for investment. islamic finance going forward there is now a strong and growing demand for islamic financial products in the global market, far exceeding the current availability of financial products and services being provided by the islamic financial institutions. going forward, there is therefore tremendous upside potential for islamic finance. as the pace of development of the islamic financial services industry accelerates, the increasingly more complex and challenging environment will continue to shape the advancement of the industry. central to this will be the expansion of the business parameters and innovative product offerings. for this, there is increased investment in research and development to yield new instruments and structures to meet the changing requirements of the international community. an area of focus, in particular, is related to the development of mechanisms for risk mitigation and liquidity management. of importance, are the solutions needed to converge the market requirements and the shariah compliance. increased innovation also calls for greater emphasis on the implementation of best practices and higher standard of risk management. vital to this is the implementation of the prudential standards promulgated by the ifsb. there is also a need to leverage more on it applications and the strengthening of management capabilities of the islamic financial institutions. going forward, with the increased awareness and understanding of islamic finance, the role of market discipline will become increasingly important in driving islamic financial institutions towards ensuring shariah compliance in the operations, in improving operational efficiency and in institut

comparison, one judgment looks to be a reasonably sure proposition : the ratio of retirees to those still working will rise precipitously starting at the end of this decade and will continue to climb through the first third of this century and remain high thereafter. in part, this projected development owes to the retirement of the baby boomers. but the phenomenon is broader than that and reflects the aging of our society. importantly, according to the social security trustees, the demographic challenge will not go away with the passing of the baby - boom generation. this ever - larger retired population will have to be fed, clothed, housed, and serviced by a workforce growing far less rapidly. the retirees may have accumulated a large stock of retirement savings, but the goods and services needed to redeem those savings must be produced by an active workforce assisted by a stock of plant and equipment sufficiently productive to meet the needs both of retirees and of a workforce expecting an ever - increasing standard of living. though from an individual household ’ s point of view, saving reflects financial claims adequate to meet future needs, the focus for the economy as a whole, of necessity, must be on producing the real resources needed to redeem the financial assets. the role of finance is to channel saving into investment in the physical capital assets that assist in the production of the gross domestic product, which, in turn, serves both retirees and active workers. clearly, an efficient system of finance can more effectively deploy a given stock of capital and thus maximize its contribution to supporting the population. any analysis of the amount and type of saving required to finance the bulge in retirements that is just over the horizon clearly needs to project ( 1 ) the number of retirees, ( 2 ) the size of our workforce, and ( 3 ) the productivity of that workforce. of the three, productivity is most directly affected by the level of investment, which, of course, is financed by saving. the size of the future workforce, excluding immigrants, and the size of the future retired population are relatively simple to project from today's age distribution. the level of immigration, both legal and illegal, will be dominated by public policy decisions and by economic forces, both in the united states and in the countries from which our immigrants are drawn. this forecast is more problematic, and its level matters : over the past decade, for example, immigration accounted for approximately one - third of the increase in our workforce. the larger our workforce in 2010 and beyond, the