World Bulletin / News Desk
Speaking at the 13th Global Forum on Islamic Finance held under the 43rd annual IDB meeting in capital Tunis, Hajjar said: "According to World Bank estimates, more than $10 trillion is invested in negative interest rate bonds; $24.4 trillion is invested in low-yield government securities; and $8 trillion is sitting in cash, waiting for better investment opportunities."
He said there was a $2.5 trillion gap in annual investments to meet sustainable development goals.
"Besides the scale of the amount required to fund the sustainable development, the major issue is that funds are required for a longer term."
Mentioning international organizations such as the International Monetary Fund, Organisation for Economic Co-operation and Development and Islamic Development Bank, he said various policy initiatives had been endorsed to mobilize the institutions and to address the potential detrimental effects of a prolonged underfunding of long-term investment.
Islamic finance, as experienced by many centuries based on risk-sharing principles and asset-backed financing, could provide a possible solution, he said.
"The risk and reward sharing nature of Islamic finance helps in aligning the interest of all parties and ensure a fair distribution of income among parties that ideally should promote investment for longer tenures."
Islamic financial services, which is still in its “infancy stage”, are growing incrementally over the past 20 years, surpassing $2 trillion marks in terms of total assets, he said.