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Opinion: World Islamic Economic Forum needs to under-promise and over-deliver

Rushdi Siddiqui The Malaysian Insider

Rushdi believes that a change agent must tell the truth to a benevolent dictator, religious hardliner, and compassionately connect with youth and have nots.

Rushdi believes that a change agent must tell the truth to a benevolent dictator, religious hardliner, and compassionately connect with youth and have nots.

The media blitz for the World Islamic Economic Forum (WIEF), to be held in London at end of October, has been immense and in “your face”. A small sample of the recent media headlines, wits WIEF references, includes:

“London seeks to solidify its role as Europe’s Islamic finance hub”
“Islamic Banking And Finance Draws Western Interest”
“London now a key Islamic finance centre”
“City Matters: Cementing ties with the Islamic world should be a key priority for London”
“Islamic Finance: London Eyes Becoming Western Capital of Sharia-Compliant Banking”

Yes, this is the first time the 9th WIEF is being held in a non-Muslim, G-20, country.

Yes, London has been involved in Islamic finance since in the early 1980s, when Malaysia started its incredible Islamic finance journey in 1983.

Yes, London has been the home of the important Euromony Islamic Finance events for more than ten years, Global Sukuk Summits, and host of Islamic finance seminars offered by IIBIF, law firms, accounting firms, university (like Oxford) courses and diplomas.

So, why all the WIEF hype about Islamic finance and London: pre-event media briefings, press releases, media interviews, by-lined articles, etc?

The WIEF is not just about Islamic finance, there will many other subjects covered, like US$2.3 trillion halal industry, but the US$1.3 trillion niche market seems to be the anchor tenant of the event. Why?

May be the hype is because heads of states, like the Malaysian Prime Minister or the Sultan of Brunei, are expected to be shaking hands, meeting people, and delivering speeches.  But, isn’t that expected of Muslim leaders, like Sh Mohammad of Dubai? Dubai will be putting showing their interpretation of an Islamic Economy in November with the Global Islamic Economic Summit (GIES).

Promoting status quo?

There is a concern on over-promising and under-delivering, resulting in promoting the status quo. Over the years, there have been many events on Islamic finance, OIC countries, halal industry, etc., where MOUs were signed, where announcements were made, where there were soft/hard launches, and so on, but follow-ups and follow-throughs were missing in action (MIA). Thus, an old Japanese proverb captures the MIA moment:

“Vision without action is a daydream. Action without vision is a nightmare.”

At the 9th WEF, I would like to see below-mentioned announcements based upon vision (collective), planning (blue-print) and actions (time-tables), and revisited at the next WIEF, possibly to be held in Dubai, UAE.

London to announce sovereign Sukuk

London is an almost complete Islamic finance hub, and the missing link is the issuance of sovereign Sukuk, which was rejected few years as “did not provide value”. The irony of the situation is the London Stock Exchange has a large number of Sukuk listed, yet none from the home country. Thus, listings are not enough, one needs to be an issuer to be inclusionary hub!

Rebranding of Islamic finance

Starting the conversation on the high profile WIEF platform will allow for meaningful inclusionary dialogue, and voting on the WIEF (or another) website and examine the results in Dubai. I would opt to rebrand it to capture its essence, which is Participatory Finance/Banking. For example, Muslim majority Turkey, also a G-20 country, has called it Participation Banking, and it was worked well in this strongly secular country. Thus, to overcome perception that Islamic finance is about religion, a rebranding exercise needs to be undertaken that conveys its participatory nature, link to the real economy and (ethical) rules of engagement.

Halal Industry Body

The fragmented and dispersed US$2.3 trillion halal industry, comprised of foods/proteins, pharmaceuticals, cosmetics, logistics/distribution, badly needs an AAOIFI/IFSB-type body.

In mapping halal in the 57 OIC and non-Muslim countries, it will reduce integrity risks, rising to level of systemic risk, because Muslims do not own/control the halal food supply chain.

It must be understood, that demand-based halal industry has larger reach and greater penetration in the Muslim/non-Muslim world than Islamic finance, hence, traceability from upstream (livestock treatment, feeds) to midstream (manufacturing/processing) to logistics/downstream (cross contamination issues) is a confidence inducing must.

An industry body, call it Halal Industry Body (HIB), is not about endorsing or adopting one set of certification process and procedures, but placing all country certification, certification bodies, etc., on one platform.

The net effect is information intermediation efficiency that will (1) educate the masses, (2) provide guidelines for interested players entering the industry and (3) press accountability of existing company/products.

Finally, and most importantly, the conversation of positioning halal as an asset class for starting the convergence with Islamic finance is must to provide an end-to-end halal solution!

Global Zakat Fund

The weakest link in Islamic finance is financial (non)-inclusion of the non-bankable, estimated to be about 1.2 to 1.5 billion of the 1.8 billion Muslims.

Obviously, Zakat is not meant to be seed money for ventures, however, some scholars have interpreted that percentage accumulated may be directed towards business.

For example, several years ago a Global Zakat fund was announced out of Southeast Asia, however, it never materialised for a number of reasons, including politics.

A formula of combining a global Zakat fund with crowd funding may be the equity approach to compliment the debt and collateral based approach of loans, Islamic or conventional, for SMEs and funding start ups, usually associated with the youth.

There are other issues that should be aired by speakers, like:

  • Awqaf, Islamic endowment/trust, as it would double the size of Islamic finance almost overnight and provide much financial multiplier effect into local communities.
  • WIEF should encourage Islamic financial institutions, with historical bias towards real estate and infrastructure projects, to be signatories of carbon, climate and equator principals, as “… we are Allah’s stewards and agents on Earth. We are not masters of this Earth; it does not belong to us to do what we wish. It belongs to Allah and He has entrusted us with its safekeeping”.
  • WIEF should lobby for the development of an Islamic sovereign wealth fund, as they, regular SWF, presently exist in many Muslim countries, like UAE, Kuwait, Saudi Arabia, Malaysia, Brunei, etc. For example, Malaysia’s sovereign wealth fund, Kazanah, is the only SWF that has been active in using Islamic structures and contracts, like Sukuk. Thus, an Islamic SWF would jump start Islamic asset management and pension industry, fast track development of Awqaf and alternative assets like PE and VC, grow takaful operators, and become profile passive/long term investors in global compliant companies.


The WIEF is uniquely positioned and strategically placed to take, say, Islamic finance and Halal Industry, totally US$4 trillion, as part of Muslim consumerism, to 2.0.

But, it must get the formula correct: part leadership, part substance, part lobbying, part revising, and all achievable without cheerleading! – October 22, 2013.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of Eat-halal.com.

About Waleed Ahmed