AS LORD Mayor of the City of London, the UK’s historic Square Mile financial district, I am proud to be a global ambassador for my country’s financial and professional services sector.
Part of my role involves travelling around the world to bolster ties between the UK and exciting, innovative, countries that offer opportunities for greater cooperation in financial and professional services.
Malaysia is one such country.
My visit to Kuala Lumpur (KL) last week comes on the back of a solid bilateral relationship, one that was strengthened just last month during a visit to the UK by Malaysian Prime Minister Tun Dr Mahathir Mohamad.
Bilateral trade stands at £4.8 billion (RM24.86 billion) which includes export of financial services to Malaysia totalling nearly £100 million. The UK is currently the eighth-largest foreign investor in Malaysia, with the value of UK foreign-direct investment stock in Malaysia reaching £3.2 billion in 2018.
Going the other way, Malaysia is a big source of investment in London, most famously in the Battersea Power Station redevelopment, soon to be home to Apple’s European headquarters.
Yet despite these strong ties, I believe there is still room to take our partnership further, a view shared by the Malaysian Finance Minister Lim Guan Eng, who I look forward to seeing this week.
He recently called the UK-Malaysia relationship a “golden opportunity”, a statement with which I very much agree. In my meetings with industry and government partners, I’ll be discussing how exactly we can do this, focusing on high-growth sectors like green and Islamic finance, where both our countries already have much expertise.
London, and more broadly the UK as a whole, is a world-class centre for the mobilisation of green capital and the enhancement of cross-border green financial collaboration, both arguably the most important but underdeveloped tools for implementing the United Nations Paris Agreement.
As a leading international financial centre, we are well placed to provide support and funding for sustainable projects, and the London Stock Exchange, who will join me in meetings in KL, boasts nearly 100 green bonds worth US$25 billion (RM103.5 billion).
The City Corp has been at the forefront of the UK’s green finance journey, and as a result is familiar with the opportunities and challenges going green presents. We know all too well that sustainability is not a single-country issue, and believe that if we stand a chance at controlling climate change, all countries need to play their part.
That’s why during my visit to KL, I’ll be offering our support to help the Malaysian government move forward with its green agenda.
Moreover, I’ll be introducing the UK’s newly established Green Finance Institute, and explaining how it too can play a role. Launched last week officially in London (July 2), the £4 million project between the City Corp and Her Majesty’s Treasury is a “one-stop shop” for all work relating to the sector — from green financial technology to international engagement.
Malaysia is already part of the Banque de France’s Network for Greening the Financial System, a group of banks and supervisors working to strengthen the global response required to meet the goals of the Paris Agreement, and I hope the country will also consider working with the UK institute in much the same way.
After all, Malaysia has led the way in combining sustainability and Islamic finance, issuing the world’s first green sukuk back in 2016. This was truly a pioneering moment, and one that led to other countries following suit, most recently Indonesia listing US$2 billion of green sukuk last month.
Both our countries have much expertise in Islamic finance. The sector already accounts for around a third of Malaysia’s financial industry, and here in the UK we will soon issue a second sovereign sukuk. I, therefore, look forward to some robust discussions on how we can work together more closely in this area, combining our unique mix of knowledge and expertise in green, Shariah-compliant financing and banking for the benefit of both countries, and indeed the world.
Of course, we recognise that Brexit is causing short-term uncertainty, but here in the City of London, we remain focussed on the long-term. We and our industry partners know that London’s strengths as an international financial centre will remain, as will our policy of welcoming greater ties with our partners like Malaysia.
Estlin is the Lord Mayor of the City of London. The views expressed are of the writer and do not necessarily reflect the stand of the newspaper’s owners and editorial board