Dubai, UAE: As a prelude to the Global Islamic Economy Summit (GIES) taking place in Dubai next year and in line with the initiative Dubai Capital of Islamic Economy launched by H.H. Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice-President and Prime Minister and Ruler of Dubai, Dubai Chamber of Commerce and Industry, in partnership with Dubai Islamic Economy Development Centre (DIEDC) and Thomson Reuters, organized a roundtable discussion, ‘Ethical and Islamic Finance’ at the Chamber premises on Monday.
The first of the GIES Series Roundtable, presided over by H.E. Hamad Buamim, President and CEO, Dubai Chamber, was attended by H.E. Essa Kazim, Secretary General, DIEDC, Abdulla Mohammed Al Awar, CEO, DIEDC, Mr. Nadim Najjar, Managing Director, Middle East, Africa, & Russia/CIS, Thomson Reuters, and a number of GCC and global CEO’s and Islamic Finance experts.
The three roundtables over the course of 2014-15 will each discuss respectively: Ethical & Islamic Finance, Leadership for the Islamic Economy and Wholesome and Halal Food. The experts at this first roundtable discussed meaningful actions that the Islamic finance industry can take at a collective level, while agreeing upon resolutions to key issues and challenges facing the industry, which shall be documented in a white paper.
The topics discussed during the three sessions revolved around building a robust institutional investor base for Islamic finance, Sharia governance and templatisation of Islamic product offerings and the convergence of Islamic finance with the ethical and socially responsible investment industry.
The speakers also came up with proposals and recommended the setting up of specific task forces for reviewing some of these issues in further depth, organizing shared roundtables with the socially responsible investment industry to enhance awareness and possibilities of cooperation.
They also recommended developing standards equivalent to triple bottom line reporting for Islamic financial institutions, and disseminating independent and objective research to institutional investors about the potential positive or negative impact of Islamic finance on the economic development and financial stability of their economies
In his welcome address, H.E. Buamim stated that Islamic finance is a key pillar of Dubai’s Capital of Islamic Economy vision, and an area of expertise in Dubai’s finance sector while globally, Islamic banking products and services have consistently gained market share, growing up to 50% faster than the traditional banking sector in some markets.
The UAE is emerging as a serious player, with total Islamic banking assets of US$95 billion in 2013 compared to US$83 billion in 2012 and this momentum will continue with UAE Islamic banking assets forecast to grow at a compound annual growth rate of 17% until 2018, said H.E. Buamim.
He further added that the roundtable with visiting top-level CEOs is discussing the Islamic Economy in finer details which is an opportunity for all interested to look at the sector’s future prospects and the ways to optimize its potential as these experts’ comments will form the basis of a white paper that will help drive further improvements in the sector.
The President and CEO of Dubai Chamber invited the participants to attend the upcoming 10th milestone Global Islamic Economic Forum being organized by Dubai Chamber in cooperation with the World Islamic Economic Forum Foundation under the theme ‘Innovative Partnerships for Economic Growth’ which reflects the essential character of Dubai and how the city united peoples and cultures from across the world.
H.E. Essa Kazim, Secretary General, Dubai Islamic Economy Development Centre (DIEDC), said: “It is a well evidenced fact that we are witnessing an increased global uptake for Islamic finance and related products and services across communities and countries. The increased popularity of Islamic pension and asset management is a case in point. The global Islamic finance market is projected to reach US$2.6 trillion by 2017, with the MENA region and Asia accounting for a large share. Large global organizations and entities are ensuring that Islamic finance is here to stay and thrive, serving the needs of people of all faiths and economic strata.”
He added: “Going forward, three key factors will become integral if we are to sustain the current momentum in Islamic finance including investment in research and development – that will step-up innovation, the development of a talent pool, and the increased use of technology in Islamic finance.”
Leading the discussions of the three focused sessions, Mr. Abdulla Mohammed Al Awar, CEO DIEDC, emphasized on the importance of producing pragmatic recommendations that can be implemented in order to conquer the major challenges of the Islamic finance industry.
The creation of taskforces to explore the building of a strong institutional investor base were highly recommended by most participants, particularly focusing on developing pension funds and on increasing outreach to sovereign wealth funds, he said.
Compliance with sharia rulings has also been a key discussion point during the roundtable, said Al Awar adding that the participants recommended conducting studies on the prospects of adding specialized adjudication of sharia for Islamic financial services in order to ensure cross-border certainty and law enforcement of regulations.
Taking a proactive role to resolve key issues facing the development of the Islamic finance industry will further bolster Dubai’s vision to become the ‘Capital of Islamic Economy’, added Al Awar.
On his part, Mr. Nadim Najjar, Managing Director, Middle East, Africa, & Russia/CIS, Thomson Reuters, said that today, we are seeing a global momentum around Islamic Economy. This is no longer just an arena for one country; Islamic Economy is a global economy now which also means that it is no longer an opportunity exclusively available to Muslims.
‘‘We believe that Dubai could build on this new economic Islamic landscape – as it did in trade and aviation,’’ he said adding that the three sessions of the roundtable discussed building a robust institutional investor base, Sharia governance and templatisation of Islamic product and the future of Islamic finance: Driving the broader ethical framework besides discussing related key issues to resolve and proposed solutions for joint action for challenges faced by the industry.
In this respect, we see the GIES Series as a long term forum for identifying and launching innovation relating to the Islamic Economy, said Mr. Najjar.
The roundtable’s headline sponsor was the Abu Dhabi Islamic Bank while the support sponsor was Emirates Islamic Bank.