Favourable regulation key to Islamic finance growth
Muscat: Developing an enabling and empowering environment, including the necessary legislative and regulatory framework, is needed to support the growth of Islamic economy, according to an expert.
This can be done by working on several key strategic pillars, Abdulla Mohammed Al Awar, chief executive officer of Dubai Islamic Economy Development Centre (DIEDC), said at the 2nd Islamic Banking Knowledge Forum hosted recently by Bank Nizwa in Muscat.
DIEDC was established in 2013 with a vision to position Dubai as the ‘capital of the Islamic economy’ and with a mission to implement a comprehensive strategy with practical programmes and initiatives to achieve this goal.
Al Awar noted that the centre is founded on the seven pillars of finance, the ‘halal’ industry, tourism, digital infrastructure, art, knowledge and Islamic standards.
He explained that the Islamic economies of the world represent more than $7 trillion in the gross domestic product (GDP).
Islamic financial assets are estimated at $1.81 trillion and are expected to reach 3.25 trillion by 2020, the expert said, adding that the 1.7 billion Muslim population is growing at twice the rate of the global population.
According to him, fast growing and relatively young population of Muslims is increasingly asserting its Islamic sensitivities in the marketplace to products as varied as food, banking, and finance extending all the way to fashion, cosmetics, travel and healthcare.
On DIEDC’s strategy regarding Islamic finance, Al Awar said that the centre works with both public and private sector partners and reaches out within the Middle East and beyond to build the international bridges essential for the global success of Islamic finance.
The centre also works with the Islamic finance industry to develop the regulatory framework that will enable the sector to flourish and become a global alternative to conventional finance, he added.
Commenting on the halal industry pillar, he said that the centre pursues national halal regulations, standards and auditing processes and works with public and private sector stakeholders to consolidate and unify halal certification standards globally.
He added that the centre’s other strategies in this regard include driving the development of the ‘Halal Park’ concept to enable halal sector companies to set up in Dubai and receive globally recognized halal certification as well as creating a knowledge base accessible to stakeholders, especially potential entrants to the sector.
On the pillar of tourism, Al Awar said that Muslims globally spent around $142 billion on tourism in 2014, which accounted for 11 per cent of global expenditure, and is expected to reach $233 billion in 2020. He clarified that the data excludes Haj/Umrah pilgrimage.
He noted that the centre’s strategy is to attract investment in this sector, create awareness and consolidate family friendly tourism travel guidelines and certification standards to protect consumers and ensure sector integrity.
Digital economy is another pillar that DIEDC is seeking to promote through supporting digital start-ups among Muslim entrepreneurs, encouraging technology companies to create Arabic and Sharia-compliant content or products and working with the digital media industry to develop the regulatory framework that will enable the sector to flourish.
Art and design
Al Awar said that in order to promote Islamic fashion, arts and design landscape, the centre strives to establish an enabling environment for a modest fashion incubation platform to develop sector talent.
According to him, DIEDC also encourage film festivals to establish dedicated awards for Islamic heritage films and promotes the adoption of architecture that reflects Islamic lifestyles and values.
In addition, the expert said that the centre works with stakeholders to align academia with government and industry to address skill shortages within the Islamic economy and conducts studies and specialised research on the Islamic economy to create a global knowledge resource.
Commenting on the standards and certification pillar, Al Awar said that, as part of its efforts, the centre works with stakeholders to develop a framework for certifying halal products and services that is globally acceptable.
Copyright reserved to Times of Oman 2015