>>this week on world business... >>a special show on the world islamic economic forum in kuala lumpur, where political and corporate leaders meet to foster economic development >>what the muslim world needs now and the world for that matter is more effective goverments. >>the need for inclusive growth we speak to the chairman of the forum foundation musa hitam about greater integration and reducing inequality across the muslim world. >>no single group in the world could advance itself by itself. >>and tapping into a potential market of 1.5 billion people with increasing economic power, islamic industries can expect to see serious growth

over the coming years >>our growth rate has been quite phenomenal, from a zero start we have nearly 50 thousand customers. >>hello and welcome. i'm eckart sager and this is world business, your weekly insight into the global business trends shaping our lives. and this week we bring you a special show from the world islamic economic forum in kuala lumpur. the forum is now in its 6th year and comes at a time when muslim nations are taking an ever more prominent role on the world stage, with many looking to exit the global recession strongly. yet despite that, there are many issues that need addressing, to help the development of the muslim world as a whole.

>>reporter: seven leaders representing the muslim world... from senegal to indonesia... took to thestage at the world islamic economic forum in kuala lumpur calling for greater integration. citing a fragile recovery... malaysian prime minister najib razak urged muslim countries to make wise decisions for the long term and initiate bold reforms to stay competitive in the new global economic order. >>razak: now it is not the time for the faint hearted to recede to return to the old status quo. what the muslim world needs now and the world for that matter - is more effective governments. >>reporter: muslims make up nearly a quarter

of the world's population... but only account for around 7% of global output. the world islamic economic forum provides a platform for muslim countries to engage and discuss trade and economic issues to foster integration, spur development and reduce inequality. >>razak: the muslim world today is bedevilled as it were by a tremendous amount of problems: questions of poverty, illiteracy, malnutrition, the widening gap between rich and poor. if at the end of the day the outcome of such a forum leads to something that is tangible, something that is mutually beneficial, then we could say that we have been successful at least in contributing to the bettermentof the muslim community as a whole. >>reporter muslim countries are increasingly sharing knowledge and innovation among themselves... in an effort to raise the standard of living. business is playing a key

role... fostering development and changing societies... a fact leaders at the forum not only recognized... but promoted. >>pitsuwan: the world is moving towards more of an accommodation and more participatory, and the muslim world with a 1.5 billion muslim population will have to be ready to make that contribution and the leaders are aware of that. and the leaders would like to certainly excite their populations, their people, that they have a role to play too. >>reporter: the anaemic growth in the west is further creating opportunities for increased interaction and trade between muslim nations. case in point: the $10 billion agreement between qatar and malaysia to develop joint energy projectsand investment opportunities... a deal which coincided with the forum. but leaders pressed the issues of reforms, trust and stability.

>>yudhoyono: we must first overcome the impediments to investing in one another's economies by making our economies attractive to all investors. we should strive to attract all kinds of investors, muslims and non muslims. >>reporter: resource rich indonesia has been successful. in the first quarter of 2010, it reported a 41% increase in foreign direct investment to nearly $4 billion. >>wirjawan: i think people are quickly learning by virtue of what has transpired in last 15 to 18 months things that were happening in the u.s. are now happening in europe that there are alternative opportunities. and i think many of the muslim nations >>reporter: with oil and gas revenues soaring to an estimated $420 billion in 2010...gulf states have begun to recognize

the potential. >>ghurair: we would have never thought of doing business in indonesia. but we have started coal mining in indonesia. maybe five years ago we would not have done it. >>reporter: the message at the forum was clear: muslim nations are gearing for economic resurgence... reviving the spirit and success of the ancient trade routes created by muslim merchants. >>the underlying philosophy of the world islamic economic foundation is to build bridges through business... a belief that greater interaction and trade between muslim nations can spur development and create business opportunities. i caught up with the chairman of the foundation musa hitam to find out more.

>>hitam: no single group in the world could advance itself by itself, within itself, except to connect with the rest of the world. the uniqueness of the world islamic economic forum is that while it call itself islamic and that the core group are muslim, made up of muslim business people, but the fact is that we recognise that without connecting with the rest of the world and putting aside the differences in religious beliefs, could we get together and identify projects, businesses, investment opportunities, trade and development overall collectively together.

>>sager: the theme of the forum is gearing for economic resurgence. as the global economy recovers you fear that some of the muslim developing countries might be left behind. what action can be takenfor them to defend themselves? >>hitam: many of those countries and groups have never been on the screen so to speak, in another words, the marginalised and forgotten groups have the opportunity to come here and we consciously want to encourage them to use the channels of the wief to get in touch and in contact and start networking and learning from others more developed. now giving them the opportunity actually means opening doors to them which give them an opportunity not only to promote themselves as best as possible not as the most advanced

but the countries or the areas that need most investment. >>sager: with anaemic growth in the west and this sort of economic gravity shift to the east that we are seeing and especially mainly in this growth corridor across what you could call the new silk road from africa into the middle east into central asia down to south east asia. doesn't this create opportunities for enhanced interaction, for enhanced trade within muslim nations? >>hitam: definitely, definitely. if you look at the pattern of geographical movement if you like there is so much now moving toward this part of the world. no doubt about it but mind you again while we call ourselves muslim business people we take the opportunity of this flow to engage everybody: china, india, we talked about thailand for example, vietnam, the potential is

tremendous and this is what the wief is all about. we get them to come here each time we have our events and engage them, provide them an opportunity to facilitate for them to get together and identify and go on and doing business and in order to facilitate that we are talking about bridging, bridging the gap so to speak through business. this is all we are all about. >>sager: finally, let's discuss the potential of the muslim market and specifically the key industries halal and islamic finance. >>hitam: i have said this ever so many times: if we look at the population of the islamic world it is mind boggling of the potential. the halal food industry is something that is just thriving, that is moving very fast, which is... now we claim that malaysia has been the hub of it, the centre

of it, literally the initiator of it, that has been the course for the other countries to adopt it, wanting to be in on that. that is why. number two: islamic banking and islamic finance, i claim, we claimthat it also started here, the initiative, how it became big and the potential for that is too amazing that even non muslim countries are or want to be involved in islamic financing and islamic banking. in other words, business opportunities that doesn't recognises borders neither ideologies, neither nationalities neither race. business is business and if you understand that you appreciate that the opportunities are vast.

>>still to come on world business... >>the disparity between muslim countries is severe but serious steps are being taken to bridge the divide. >>and with the islamic finance sector now worth nearly 1 trillion dollars and the halal industry going from strength to strength, sharia compliant business is booming >>the potential of the muslim market ... and the rest in just a moment on world business... >>despite the economic success of muslim nations like malaysia, indonesia and the oil producing countries of the middle east, 40% of people in the muslim world live below the poverty line. as the muslim world continues to take a more dominant role in the global economy; we look at what can be done to ensure the richer countries help the poorest.

>>reporter: when 19 year old salma bezum's husband abandoned her with a two year old baby on the streets of bangladesh's capital, dhaka, the prospect of her having to try and earn what she could as abeggar or work as a housemaid for just food, no money was very real. her life changed when she was taken under the wing of an international muslim charitable organisation, trained in the use of a sewing machine and given a small loan to set up her own shop. >>wilmot: now this lady is really inspiring in the sense that we gave her one sewing machine, now she has three, and now she's employing three staff to help her expand her business. so i think her future looks very bright, her children now are getting adequate nutrition and she'll be able to send her children to school. thus breaking the poverty cycle. >>reporter: even in the lush countryside life in this land of over 160 million people is hard for many. agriculture represents 25% of gdp and 57%

of the population are employed in the sector. >>reporter: and despite a doubling of gdp since 1975 a staggering 80% of bangladeshis live on an income of less than two dollars a day. it, like many other muslim countries, is amongst the poorest onearth. >>sacranie: what is needed is for these countries to interact with the developed countries thereby maximising the growth, maximising the potential that exists and in many of these countries, there's huge potential, not just human resources but the natural resources down there. >>reporter: bangladesh is actually almost self sufficient in food and the government's aim is to make it so by 2013. with the financial help of organisations like the islamic development bank, the i d b, whose work is funded by the better off muslim countries local

authorities are teaching farmers about more productive seeds and pest control, providing better tools, building concrete irrigation channels and increasing mechanisation. >>paul: after getting this equipment, they ploughed the land in time, so that they can planted the crop in time, and the crop will be increased and they get some money which has been useful for theirsocio economic condition and their financial enhancement. >>sidibe: one word is very important in islamic mode of operation, its solidarity. so when islamic nations are grouped together one of the key words is solidarity and partnership. that is what happens in partnership you share you share what you know, you share what you have. >>zaman: all our efforts are here focused to the comprehensive human development. we want to have

adevelopment with a human face. the idb is quite strong in terms of supporting the social infrastructure which is health and education, safe water and sanitation. we are also helping in clean energy and renewable energy and mainly food security and we are confident that with the close cooperation with the government of bangladesh and the people the idb's assistance in this country would help to reduce poverty and perhaps to eradicate it within a short space of time. >>reporter: education too is seen as one of the weapons in the fight against poverty. >>reporter: whether it be at places like the islamic university of technology in dhaka, supported by the i d b, or in this school for youngsters in dharmadas village in the north east of the country the poorest end of bangladesh. >>this village school, supported by muslim aid, has been running for four years and teaches some 30 children who otherwise would get

no education at all. >>wilmot: this is one of 100 schools that we have for children who dropped out of school. in bangladesh 50% of children drop out of school because of poverty, or they didn't even go to school. so what we are trying to do is help these kids get back into the formal education system. what we have found ion our experience over the last ten years in doing this service to the communityis that 90% of our kids go on to complete formal education. without this, these kids would have been almost semi illiterate. >>reporter: and this upper school, again supported by idb and the government, caters mainly for thechildren of farmers, who might not be able to go on to higher education. so vocational training is important, to enable people to earn a living independent of subsistence farming. >>reporter: some 80%

of employment and about 80% of production in bangladesh comes from small and medium sized enterprises; s m es. >>so, in the heart of dhaka, muslim aid runs an institute of technology helping people work in the sector and even set up their own businesses. students are provided with technical knowledge and skills in a wide range of areas such as computers, air conditioning and engine mechanics. >>wilmot: this has happened in many of our muslim aid institutes of technologies, we have four of them in bangladesh, which is helping people escape from poverty through skill training, through education. this is a disabled guy whose father wanted him to beg based on his disability but his mother wanted him to get an education so he completed his education so he was literate, but then his father still forced him to beg on the streets of dhaka." >>reporter: for the last three

months, with the help of muslim aid, shamina mia has been learning how to service mobile phones. >>wilmot: and don't forget mobile phones is huge in bangladesh 50 million of them and probably is going to double to another fifty million so there's huge importance for mobile communications in the country. and repairing them is very important. so this skill is a very marketable skill. he started business yesterday and yesterday he earned 1,500 taka. >>reporter: that's over twenty dollars in a country where over 57 million people 36% of the population try to survive on less than one dollar a day.

>>in recent years, the islamic finance industry has been experiencing double digit growth...and has moved firmly from the fringes of the financial world to the mainstream. the same can also be said for the halal business. both have caught the attention of non muslim corporations and countries eager to get in on the boom. and that presents both a challenge, and opportunity for muslim countries. >>allah has permitted al bayaa, which is trade and allah has prohibited ariba ariba, which is interest or usury. >>musa: in trade in the modern day you have so many risks.

you have market risk, you have credit risk, you have systemic, systematic risk. so for assuming that risk which you've done now it is legitimate for you to enjoy the profit. >>reporter: based on that system of risk...and profit sharing, the islamic financial system worldwide now boasts around 1 trillion dollars of assets, and is growing at around 15 per cent annually. >>abdullah: do remember that it's started from the very small base so those double digit growth numbers are fairly spectacular but if you look at all the assets in the world it's only about one percent so we still have some way to go. >>reporter: and it's not confined to muslim countries, with places such as london and singapore also actively promoting islamic financial services. >>the islamic bank of britain was the first in europe to be fully sharia compliant. >>pasha: our growth rate has been quite phenomenal, from a zero start we have nearly 50 thousand customers in the uk, some of these customers come from all types

of backgrounds, in fact our very first customer when we opened the bank was a non muslim customer. >>reporter: it's those high growth rates that present serious opportunities, especially for countries in central asia like kazakhstan well positioned to provide a home for the oil wealth of the gulf. >>massimov: first bank in kazakhstan called el halal bank and we introduced a new law about islamicfinance and we're going to expand it and we start up negotiations with a number of countries from the region from saudi arabia, from bahrain and from some others to attract more investment over here.i personally view islamic finance is a good source for the development not only for kazakhstan but for the whole region at the same time. >>reporter: malaysia was one of the first countries to develop a modern-day islamic banking system,which is now thriving alongside the conventional interest-based system.

>>malaysia is the largest issuer of sukuk roughly islamic bonds and is aiming to become a global hubfor all types of islamic finance. >>to that end, the country's central bank has established an institute that trains people in the intricacies of islamic finance to phd level. >>natt: the objective of inceif is really, to ensure that there is a continuous talent pool where the industry can tap from, and so that this will ensure that the industry will continue to grow on a sustainable basis. >>reporter: the growth and strength of islamic finance in malaysia is helping boost its ambitions to be a leader in another industry that is a natural fit for muslim countries. >>abdullah: another interesting area where islamic finance is moving forward, it's the recognition of the whole halal food chain and the fact that if you need to borrow money, you should borrow moneyislamically

in order to support your halal food business. >>reporter: the halal industry is based on the making of products sanctioned for muslims to consume, slaughtered in the correct way, and free of pork products and alcohol. >>catering to more than one and a half billion muslims, the halal industry is estimated to be worth some 2 trillion dollars with growth expected to be as much as 25 per cent annually. >>as with islamic finance, muslim countries can't take their leadership in the industry for granted.indeed, far from it. >>it's actually large multinationals and non muslim countries that have by far the biggest share of the market, whether it's thailand producing halal chickens or australia halal meat. >>bidin: if you don't have these basic industries then you don't have halal industry so what we're seeing here is there is an urgent need for the muslim countries to look at this thing very

seriouslyand start developing their own halal industry. >>malaysia's muslim owned prima agri products knew it didn't have the scale or the knowhow to make an impact on the world halal stage on its own. so they teamed with an australian company with a long history of producing meat products for fast food chains. >>kadir: we have been going around we have been identifying partners in the world wide actually youknow, and trying to get them to work with us, at least in the context of trying to advise or, if possible, even to manufacture on behalf of these big players and the non halal big players to come anduse malaysia, or use my company for example to go forward in them penetrating the halal market. >>reporter: it's precisely the type of collaboration that the wief aims to facilitate as it seeks to boost trade, investment and economic development across the muslim

world. >>in that package we heard from the prime minister of kazakhstan, karim masimov. and next year the country will be hosting the 7th world islamic economic forum. that's it for this week's world business. thanks for watching. we'll see you again at the same time next week.