Conclusion - lessons from the 1990s Allow me to set my concluding remarks in the contest of the specific question posed for this panel, namely "Fix versus float - what have we learned from the 1990s?" My answer falls into two parts. First, the 1990s served to confirm what had already become apparent from our experience with a currency board in the 1980s, namely that a currency board can be a viable and, arguably, optimal regime for certain types of economy, but not all. The necessary conditions for success include sufficiently flexible costs and prices, a sound banking system, adequate fiscal discipline and the requisite foreign exchange reserves to back the monetary base, preferably free of other encumbrance. Not all these desiderata were satisfied in one instance of a 1990s' currency board, which has since passed into history. The second lesson concerns the novel feature to emerge late in the 1990s and persist through to the current decade - namely deflation. Society globally has been re-learning how to live with this, after a gap of a lifetime. It seems perfectly possible to live with modest deflation, as our ancestors did, once you have adapted to it. We are reasonably confident that the US economy, to whose monetary stance we in Hong Kong are tied, will not develop in such a way as to make our problem - if that is indeed what it is - any worse.
Scholars and researchers need to think through what it takes to internationalise the industry, how to enhance cross border transactions of Islamic Finance services or how products could be structured to meet the sophisticated needs of the economy. Second, broaden your worldview to think about all issues surrounding the ummah, not just those directly within the realm of Shariah and Islamic finance today. We now see many traditional sectors ripe for disruption, with incumbents blindsided by new technologies and new business models. Islamic Finance will not be isolated from these rapid changes. The Islamic finance community must be innovative and competitive to fulfil the needs of Islamic Finance users and ensure products and services offered remain relevant. That would entail understanding issues faced by society at large. Some of the most critical issues confronting the economy and society all over the world include accessibility to affordable housing, quality of living standards, and better avenues to good healthcare and education. How could Islamic finance and Shariah scholars contribute towards solving some of the problems in the real world? How should Islamic finance position itself to become the preferred solutions providers on issues faced by the real economy and society? Third, start “walking the talk”. As scholars, you will have plenty of ideas about how to make the world a better place. I call on you to translate these ideas and proposed solutions into concrete actions. We have enough of polemics and preaching. You will likely need to work with others to make this happen.