I came to attend the first ever Global Islamic Economy Summit in Dubai, UAE. Academia, policy planners, civil society members, ministers, bankers, professionals and researchers from all over the Muslim world, the USA, the UK, Germany, Austria and France joined the summit that discussed the present challenges and future of Islamic economies, Islamic economic system, Islamic finance, halal food industry, Islamic travel industry and so on to lay the foundation for a strong and vibrant global Islamic business community. The speakers rightly highlighted on the ever expanding Islamic economies and their increasing importance in the global growth dynamics and consumer spending. 10 out of 25 most growing economies in the world belong to the Muslim world, where per capita spending is rising with continuous increase in disposable income and creating larger opportunity space for the big consumer and food companies. Entire Islamic finance is going through a change process with more shariah-compliant product offerings and client friendly product services. After the 2008 global meltdown, the Islamic finance emerged as a secure and people friendly financial system in the world. Efforts are on, how to make this more effective and focused on continuous solutions building for the clients.
His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai, inaugurated the two-day summit attended by over two thousand delegates. There were several panel discussions, a few overlapping ones. I was most intrigued with the one focusing on positioning Islamic economy in a defining role in the new and emerging global economic landscape attended by Baroness Warsi, senior minister of state, UK foreign and common-wealth office, Dr. Sapta Nirwander, Indonesian Deputy Tourism Minister, Ambassador Mouhamdou Doudou Lo, Director General, OIC and the following one on ‘Beyond halal food and Islamic Finance’, that started with an overview of key insights the State of the Global Islamic Economy Report. ‘The Islamic economy strategy capitalises on the vast opportunities available in the Islamic world, particularly in the financial sector and the real economy sector-halal, lifestyle, pharmaceuticals, etc. The estimated GDP of the Islamic economy is about USD 8 trillion and the total foreign trade of the Muslim world accounts to USD 4 trillion.’ ‘The rise of the Islamic emerging markets has led to a new normal’ for the global economy. One of the interesting things we are seeing these days is the rise of the global sovereign wealth funds, that accounts for USD 6 trillion of global assets and interestingly 42 per cent of the sovereign wealth funds now come from the Islamic nations.
Islamic finance though does not have much impact on global economy as of today, but many of the world’s rapidly growing economies are Islamic and have policy goals to support the sector. Islamic finance is geared to grow in importance over time. The sector is growing faster than in conventional retail. This is particularly true in the Middle East where there is a preference for Islamic finance and where product offerings are generally more aligned. Islamic governments are also supportive of the sector which helps to drive growth. The UK hosting the World Islamic Economic Forum (which was attended by Bangladesh President Abdul Hamid), planning sukuk (shariah compliant bond) issuance, as well as the prime minister’s personal endorsement- all also demonstrated the UK’s commitment to the rising Islamic Economy sector.
I was rather most intrigued by the speech from Dr. Ahmed Ali Al Madani, the distinguished President of the Islamic Development Bank, who also received lifetime achievement award for his key role in supporting the private sector in the Islamic world. Dr. Madani in his speech highlighted the importance of revisiting the Islamic financial products and services in view of the shifting needs of the market. He urged global community to build a secure financial system and ensure financial inclusion to support the marginalised ones. He focused on continuous review and reforms of the existing guidelines and make them more growth sensitive.
The summit did discuss Shariah compliant banking system, halal foods, lifestyles, family travel, asset management, Islamic investments and available business opportunities in the sectors of the Islamic economy and held the Islamic Finance and Innovation Challenge award. Incidentally I found myself the only individual attending the programme from Bangladesh.
Despite the onslaught of 2008, Dubai seems to have come back to track with lot of development and investment potentials. The ruler and the city dwellers were sure to win the ‘Expo 2020′ venue- which ultimately happened 2 days later. They are all working to ensure Dubai remains the jewel’ in the gulf and the ‘hub’ of Islamic economy.
The most surprise came when I was coming out of Dubai through the immigration. Usually immigration doesn’t ask you many questions while exiting a country. The gentleman at immigration counter looked at my passport many times, asked my dad’s name, and enquired- when I was expected to visit again and so on. When I asked him was there anything wrong, he smiled looking at my long term US, UK, Singapore, China and Indian visa and replied- no problem, but you are a Bangladeshi, correct?. What’s wrong with Bangladeshis, I enquired? The gentleman annoyingly said- Bangladesh, mafi Muslim (Bangladesh is not Muslim); they are killing our Muslim brothers. I had few more lines of unpleasant conversation with this ‘kind of insightful’ young immigration officer. Looking at what is happening around in Bangladesh, I wanted to keep mum. I could only think- our immediate past foreign minister was so wrong to understand the ‘Middle East’ psyche. I felt pity for my colleagues who are not being granted UAE visa for last one year or so to work in the UAE.
Bangladesh manpower export in last 10 months of the calendar year has witnessed 37 per cent decline with 8.7 per cent year-on-year reduction in inward remittances. The manpower export was 342,000- in 10 months of the present year against 544,000- during same period in 2012. While the estimate for 2013 full year is 400,000-, the actual for 2012 calendar year was 677,000-. Middle East employs almost 70 per cent of our manpower abroad. Manpower export to Kingdom of Saudi Arabia is off from 2008, while Bangladesh saw around 100,000- of its people going to KSA each year in the past. The UAE, the second largest host country from Bangladeshi expatriates started to reduce visa issuance to Bangladeshis from September 2012. From October 2012, they totally stopped issuing work visas to Bangladeshis. Bangladesh’s Middle East policy was always driven like an ‘orphan child’. We were forced to listen to the music played by few of our deemed to be articulate ministers. Middle East investment in Bangladesh be it- portfolio or foreign direct investment is one of the lowest in the world. Bangladesh is not being discussed in the right corners or tables in the Middle East, the rising wealthy part of the world and eager to spread outside to multiply their earnings through investment in capital markets, infrastructure and tourism. We need to wake up, do our home work and try to make best use of our ‘Middle East relationship’, by putting ‘right people for the right job’, including a dedicated envoy or representative for the Middle East.
By Mamun Rashid for Financial Express