We are fond of pinning the term 'international city' on Hong Kong, yet some minority groups here may have difficulty swallowing such an assertion. Our city embraces a global system of economics, but for those with experience of other nations and cultures, the thinking here can at times seem insular.
Financial Secretary John Tsang Chun-wah's recent suggestion that we take an interest in the hitherto ignored Muslim financial sector was therefore a step in the direction of truly living up to the 'international city' tag. That his words have been swiftly followed by the Securities and Futures Commission approving Hong Kong's first Islamic retail fund shows a determination to better take advantage of our circumstances. Such moves should also spur efforts to make our community more ethnically and socially inclusive.
Mr Tsang's comments were not directed primarily at the 300,000 or so Muslims who live in Hong Kong. More, they were directed at the Middle East, where the bulk of the Muslim world's US$1 trillion in investment money is located. Despite our city having a long and rich history of Muslim involvement and participation, the mechanisms to attract such investment have been sorely lacking. London has led the way, while Singapore has been rapidly catching up.
Our problem is that we have little experience of Muslim finance. Islamic law does not permit the payment of interest, a concept alien to our banking system.
Hong Kong's position as the investment gateway to mainland China makes it an enticing option for Muslims. Investing in China, which is seen to be more neutral in its dealings with the Muslim world, may be considered a more attractive choice than London, or even Singapore, given the political sensitivities amid the 'war on terror'. But without a Muslim-friendly banking system in place, our city is potentially missing out on billions of dollars in investment. Mr Tsang has been quick to notice our failing and the government is now moving to correct the oversight.
The Hang Seng Bank's retail index fund for Muslim investments is the first measure to be given the go-ahead. But to attract the big investors from the Muslim world we need commercial banks with front- and back-end operations dedicated to serving Muslims as their religious beliefs dictate.