Dubai Islamic Economy Development Centre (DIEDC) in partnership with Thomson Reuters and the Dubai Chamber of Commerce and Industry has launched a report outlining key findings from the Global Islamic Economy Summit (GIES) 2013.
GIES 2013 Review details the discussions of 25 sessions held at the summit and outlines key recommendations across the six pillars identified by DIEDC to articulate Dubai’s vision of developing as the capital of Islamic economy. The pillars include Islamic finance, halal food, halal travel, halal lifestyle, SME development and Islamic economy infrastructure.
His Excellency Essa Kazim, Secretary General of DIEDC, said, “GIES 2013 Review is a valuable repository of information on the effectiveness and efficiency of efforts by industry leaders to drive the global Islamic economy, and serves as a roadmap for its growth. We are proud to share with the world the milestones Dubai has achieved in positioning itself as the capital of the Islamic economy. We will continue to bridge ideas and aspirations to achieve better outcomes at the Islamic Economy Summit 2015.”
State of the Global Islamic economy: Need for Common standards, Convergence and Cross-border trade
A consensus highlighted in the Review is that global growth of the Islamic economy must revolve around a more integrated interplay of three Cs – Common standards, Convergence, and Cross-border trade – or risk inefficiency and slower growth if the status quo of fragmented markets and disparate efforts persist.
Development of the Islamic economy has to yield to common standards and governance structures, notwithstanding cross-country differences. This is imperative for the halal sector where the multiplicity of certification and accreditation standards is a handicap for market players, which are predominantly SMEs struggling to grow and reach new markets.
For Islamic finance, common standards and contract templates for banking, capital market, takaful, and asset management will facilitate higher levels of cross-border flows currently blocked by different sharia interpretations and legal practices.
The Review reflects repeated calls for passporting regimes to be implemented to break down barriers to cross-border flows especially for funds and the coordination of takaful operators. At the same time, convergence of the Islamic finance and halal sectors is recognised as being long overdue, with the Islamic finance industry being asked to dedicate more resources to the financial requirements of SMEs in the halal sectors. These SMEs, in turn, need to upgrade their business savvy to appeal better to potential investors and financiers.
Common standards and convergence will lead to greater cross-border links; at the same time, trade barriers must be reduced through preferential trade agreements especially to increase intra-OIC trade.
Steps forward for growth of the Islamic economy
GIES 2013 Review has detailed key recommendations for each of the six pillars of the Islamic economy. While speaking in different terms, Islamic finance and the halal sectors recognise that what the ‘halal’ or ‘sharia-compliant’ labels represent will require transformation; this includes the management of awqaf (endowments). In the halal sector, there is a clear shift towards ‘tayyab’ (wholesome) that incorporates a concern for animal well-being, organic food, and end-to-end sustainable value chains. In Islamic finance, the focus is towards moving from ‘form’ to ‘form and substance’, where Islamic banks, takaful operators and fund managers are recognising the need to take back the ‘ethical’ label in order to gain a larger and mainstream market share.
The Review also presents recommendations based on key insights from industry leaders for the fledgling sectors of halal travel and lifestyle.
H.E. Hamad Buamim, President and CEO, Dubai Chamber of Commerce and Industry, said, “The report highlights our key recommendations made at the conference and as such presents a roadmap for Dubai’s future development as capital of Islamic economy. Most pressing are the need for a proper regulatory framework governing halal industries, the unification of the word halal, and innovation across the Islamic economy spectrum. However, all are areas where Dubai has the ability to progress and lead developments globally. Dubai is a dynamic city with a sophisticated and varied Muslim consumer base, yet also has the distinct advantage of being able to bring the benefits of halal to non-Muslim consumers.”
Abdulla Mohammed Al Awar, CEO of the Dubai Islamic Economy Development Centre, said, “The report highlights Dubai’s endeavours to manage, support and empower various stakeholders to create ambitious initiatives across the six pillars of the Islamic economy. While the Islamic finance and halal sectors represent great opportunities in the coming years, we seek to ensure success for the other pillars that constitute our strategy through increasing awareness of the potential growth the Islamic economy represents – not only for Muslim countries but in significant non-Muslim parts of the world as well.”
Nadim Najjar, Managing Director, Middle East and North Africa, Thomson Reuters, said, “Thomson Reuters is proud to be working with DIEDC and the Dubai Chamber of Commerce and Industry to shape the global Islamic economy agenda yet again. This partnership confirms our role as a key contributor to the growth of local markets through enhancing transparency, offering quality content, helping companies function better, and assisting professionals to make informed business decisions across the MENA markets.”
He concluded, “The emergence of an Islamic economy as a definable economic paradigm opens up a new horizon of opportunities that, if nurtured, can bring tremendous benefits for societies all over the world. Last year, the GIES initiated critical dialogue on the development of the integrated sectors of Islamic Economy. Going forward, we would like to build on the foundations of GIES and pave the way for meaningful discussions across all Islamic economy sectors.”