23oct

On October 22б 2020 an online seminar of Prof. Kabir took place.

Prof. Kabir provided participants with a brief overview of the current state of the Islamic finance market according to the latest Islamic Financial Services Board report and shared the concept and specifics of the key sukuk* structures, and its distinguishing characteristics. He outlined the advantages of sukuk both for issuers and governments, the latter often acting as the guarantors of sukuk issuances. Professor Kabir presented case studies of selected issuances, and told about new concepts of sukuk presented in research papers. In particular, infrastructure sukuk, the profitability of which is tied to the country’s GDP.

The issue of guarantees, their necessity and compliance with the spirit of Islamic finance, caused a discussion among the participants. Subsequently, this question was addressed to Professor Kabir by Mr. Mikhail (Shamil) Orlov, the managing director of the Agrofinmost project. The lecturer explained the conditions imposed by the Sharia law relating to the guarantees. He noted that an excessive emphasis on guarantees continues to be a negative feature of the Islamic financial sector. The professor shared his position that the participants of the Islamic finance market should avoid copying the Islamic financial instruments prevailing in practice, which often imitate conventional instruments. Instead, they should create solutions which are closer in spirit to the investment market and meet the interests of real people.

In opinion of Professor Kabir Hassan, in attempts to obtain high credit ratings, participants of the market of Islamic finance and sukuk often ignore the essence, the basis that should fill Islamic financial transactions. The participants of the seminar agreed on the need to continue the discussion on these topical subjects. According to Mikhail (Shamil) Orlov, one of the hot topics for the application of the Islamic financial instruments is the solution of issues related to food security in the world. Islamic finance is primarily an ethical approach, it focuses on solving social issues, and cooperation with experts in the field of Islamic finance, such as Prof. Kabir Hassan, is very important for the project.

The seminar was attended by specialists and researchers of the Islamic financial market from Russia, Kazakhstan, Kyrgyzstan, Malaysia, Indonesia, Qatar, Nigeria and other countries. The seminar was also attended by Russian specialists in Islamic finance and law. Particularly, Mr. Alexander Kazakov and Mr. Andrey Zhuravlev, lecturers of Islamic finance disciplines in Russian universities and members of the Russian Association of Experts in Islamic finance (RAEIF), took part in the seminar and discussion. The moderator was Madina Kalimullina, RAEIF Executive Secretary, Senior Research Fellow at the HSE-Skolkovo Institute for Law and Development.

Dr. Kabir Hassan is a professor of finance at the University of New Orleans and has served as a consultant to many international organizations, including the World Bank and the Islamic Development Bank. Professor Kabir is Editor-in-Chief of the International Journal of Islamic and Middle Eastern Finance and management. (Q3 WoS)

The online seminar was held within the framework of the training and research agenda of the Agrofinmost project, which aim is searching for the best ways to use Islamic financial mechanisms in order to increase and optimize the export of agricultural products and increase the level of food security in the world.

*Sukuk are investment securities, which are an alternative way of attracting project financing. The investors’ return depends on the cash flow generated by the project or the asset underlying the sukuk. The sukuk market is a fast-growing segment of the Islamic finance market. In 2019, the total market for outstanding sukuk exceeded $500 billion (IFSB, 2020).