Thank You Address by Mr Nik Mohamed Din Nik Musa, Director General of Labuan FSA at Djibouti-Malaysia Business Forum 2023

Djibouti-Malaysia Business Forum

Thank You Address by

Mr Nik Mohamed Din Nik Musa
Director-General of Labuan FSA

29 November 2023


H.E. Mr. Abdoulkader Kamil Mohamed, Prime Minister of Djibouti
H.E. Mr. Ilyas Moussa Dawaleh, Minister of Economy & Finance
H.E. Dr. Ahmed Robleh Abdilleh, Minister of Health
H.E. Moustapha Mohamed Mahamoud, Minister of Education
H.E. Yonis Ali Guedi, Minister of Energy
Her.E. Safia Mohamed Ali Gadileh, Secretary of State for investment and Private Sector Development
H.E. Ahmed Osman Ali, Governor Central Bank of Djibouti
Mr. Youssouf Moussa Dawaleh, President of Djibouti Chamber of Commerce
Mr. Mahdi Darar Obsieh, Director General of National Investment Promotion Agency
Mr. Mohamed Ahmed Ali, Chief Executive Officer, Salaam Group

Ladies and gentlemen,

Assalamualaikum, Good morning and Bonjour,

1. First and foremost, I would like to express our deepest gratitude to Almighty God for His abundant grace, which has brought us together on this blessed morning in the beautiful country of Djibouti in this historic Palais Du Peuple building. Our appreciation is extended to His Excellency President of Djibouti for granting the state guest status to the delegation of Malaysia. We wish to convey our sincere thanks also to the National Investment Promotion Agency (NIPA) and the Salaam Group for organizing this auspicious event. We are truly privileged to be here and eagerly anticipate the opportunity to foster and strengthen the trade and economic ties between Malaysia and Djibouti.

2. As head of the Labuan Financial Services Authority, I can honoured to represent the Malaysian delegation comprising Export-Import Bank Malaysia, Chartered Institute of Islamic Finance Professionals, and business leaders and industry experts covering manufacturing, energy, financial, education and health industries. Your presence adds immense value to this gathering, and we are grateful for your participation in this momentous occasion.

3. This business forum serves as a platform for dialogue, collaboration, and knowledge-sharing, the first of many, on topics that shape the dynamic world of international trade. In the challenging and ever-changing landscape of the global economy, the collaboration between Muslim countries holds immense potential. The recent years saw many notable developments in the Islamic economies, including further acceleration of digitalisation, heightened intra-OIC trade deals, Islamic finance, and increased government focus on food security and healthcare. Although the global Islamic economy continues to be underpinned by a large and growing Muslim population of 1.9 billion or 25% of global population, the trade deals amongst Muslim nations accounted for only 3.3% of global trade.

4. Therein lies the opportunity for Malaysia, one of the most open economies in the world with a trade to GDP ratio averaging over 130% since 2010, to have closer ties with Djibouti. Malaysia’s robust economic and financial ecosystem is supported by advanced technology, innovation and a growing digital economy, served by able corporate leaders, professionals, entrepreneurs and government workforce. As one of the fastest-growing nations in the region, Malaysia offers a favourable business environment with mature and integrated supply chains, making it an ideal destination for investments and business ventures.

Ladies and gentlemen,

5. Malaysia’s trade in year 2022 recorded a new milestone, surpassing US$500 billion for the second consecutive year and registered the fastest growth since 1994. Trade grew with double-digit expansion of 27.8% to US$565 billion compared to 2021. A significant growth in exports was also recorded with your esteemed country, where the trade expanded by 119% to US$375 million, following robust exports of palm oil and palm oil-based agriculture products. However, the Malaysia-Djibouti trade volume has a lot of room to grow as it only represented less than 0.1% of Malaysia’s total trade last year. Over the last 26 years, Malaysia's exports to Djibouti have grown at an annualized rate of about 19%, while for Djibouti's exports to Malaysia, stood at over 10%, thus reflecting a strengthening economic relationship.

6. I would urge Malaysia and Djibouti to enhance bilateral trade relations and explore new avenues for investment prospects towards a more mutual growth and prosperity. This is where Labuan International Business and Financial Centre can be positioned as the gateway for Djibouti to South-East Asian region and beyond. Located off the north-west coast of East Malaysia, Labuan is strategically located in this region of 600 million population. The Centre has evolved into the top three important international financial centre in Asia. Since the 1990s, Labuan has seen remarkable progress, with nearly 900 licensed international financial institutions and about 4,000-plus active companies. Labuan's 3% tax regime, free capital flows, favourable business environment and compliance with international regulatory and prudential standards are designed to attract international businesses.

7. The gateway for Djiboutians can be through our new initiative called IDAC or Islamic digital asset centre. Although Labuan is thousands of miles away, use of digital will bring us closer together. It is a proven and tested digital or online platform that allows corporates including SMEs, to raise funds via issuance, listing and trading of asset-backed securities tokens. This can be far-reaching and cost effective for investors who can be retail-based, high networth and institutional. In addition, entities can digitally tokenise their physical assets to raise funds and structure the assets to back or be attached to the funding instrument to be more attractive to the investors.

8. And lastly, IDAC can be a virtual platform to structure socio-finance products such as saving for hajj, pension fund, waqf foundation and zakat fund especially for Muslim ummah working abroad. These products have received the Shariah certificate of our international Shariah body. The good news is that the Government has recently announced in October that Labuan entities conducting Islamic financial activities will enjoy 0% tax for the next 5 years.

Ladies and gentlemen,

9. Tomorrow marks a significant milestone in the collaboration between our countries as we witness the signing ceremony of the memorandum of understanding involving the Authorities, institute of professionals and the private sectors. We hope this collaboration will be the first of many, InsyaAllah. Again we express our heartfelt gratitude to all the esteemed attendees for being a part of this historic event. We look forward to a future filled with collaborative ventures that will contribute to the growth and success of both our nations.

10. Thank you, shukran, and mêrci beaucoup. May our endeavours be blessed with success, and as they say in French “Que nos efforts soient couronnés de succès”.

Wabillahhi tawfik wal-hidayah wassalam w.r.t.

Mr Nik Mohamed Din Nik Musa
Director-General, Labuan FSA
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