In January this year, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice President of the UAE and Ruler of Dubai, revealed his vision to position Dubai as the Global Capital of the Islamic Economy, and two months later, the UK Government launched the UK’s first Islamic Finance Task Force to cement London’s status as the western hub for Islamic finance by showcasing the UK as the preferred choice for the Muslim world to invest in and do business with. Two initiatives, but one shared vision around the importance of Islamic finance.
I am certain that both Dubai and London are well placed to capitalise on the global interest around the fast-growing Islamic Finance sector where total Sharia-compliant assets are expected to grow beyond $2 trillion by 2014. Each city has something unique to offer.
Dubai’s future plan is to expand beyond Islamic finance. This will cover activities in areas ranging from banking and insurance to food production, education, tourism, trade policies and commercial laws — to name a few — that are conducted according to the principles of Sharia. No stranger to Islamic finance, Dubai pioneered the field with the creation of Dubai Islamic Bank in 1975. Today, Dubai is one of the leading players in Islamic Finance in the region. So much so that the Bank of London and the Middle East (BLME), the largest Islamic Bank in Europe, announced in May 2013 the opening of its representative office in the Dubai International Financial Centre (DIFC).
London, for its part, continues to focus on Islamic Finance, leveraging the UK’s position as Europe’s premier centre for Islamic finance as part of its world-leading financial and professional services industry.
The global market for Islamic Finance at the end of last year was worth around $1.3 trillion, according to the UK Islamic Finance Secretariat. The value of Sharia-compliant assets has grown by 150 per cent since 2006 and the UK now leads the western world in Islamic Finance with $19 billion of reported assets.
So far, banks in London have issued 37 sukuk raising $20 billion, all currently listed on the London Stock Exchange. There are more than 20 international banks which offer Islamic products, of which six are Sharia-compliant; this is more than any other western country. London has also welcomed recently the Abu Dhabi Islamic Bank, joining the community with a premium location in Knightsbridge.
The sector has been made even stronger by the first class professional services London provides; these include 25 law firms specialised in Islamic finance, and dozens of other firms from accountants to insurance brokers with dedicated Sharia-compliance departments. All of this is backed by the UK’s first class educational system and business schools, many of which now offer qualifications in Islamic Finance.
Every time I return to London, I am struck by the way Islamic Finance has transformed our capital’s skyline. Iconic landmarks like the newly opened Shard or the London 2012 Olympic Village were financed in whole or in part by Islamic Finance.
It is, therefore, no coincidence that London has been granted the honour of hosting the 9th World Islamic Economic Forum (WIEF) next month, the first time it has been held outside the Muslim world.
The forum will take place at the ExCeL Centre from October 29 to 31, 2013, and is set to attract more than 1,500 delegates from over 80 countries. The WIEF has invited a number of Heads of State and Government to attend the forum. Prime Minister David Cameron, the Mayor of London Boris Johnson, and many ministers from the UK Government are all confirmed to attend. Delegations to the WIEF are expected from across the Islamic world and beyond. The forum will position London as a world centre for Islamic banking and finance and a first class destination for Islamic finance investment.
Hosting the event at ExCeL is in itself a good example of partnership between the UK and the UAE; the ExCeL Centre, which hosted many London 2012 Olympic events, is part of the Abu Dhabi owned Adnec Group. As Global Market Abu Dhabi establishes itself and seeks international partners, it will be interesting to see whether Islamic Finance will be an area where GMAD will also look to focus.
I believe this sector provides an outstanding opportunity for both our countries to join forces to achieve our shared Islamic Finance ambitions and to help the industry thrive. Our governments can work in cooperation to establish the global standards and governance arrangements necessary to underpin this industry’s future sustainability.
Against this promising backdrop, preparations are underway this week by my Embassy team here in the UAE to receive Baroness Warsi, the UK Senior Minister of State at the Foreign & Commonwealth Office. Baroness Warsi, who co-chairs the British Government’s Islamic Finance Taskforce, will visit the UAE to speak at key events for senior officials and practitioners operating in the Islamic Finance sector in the UAE, starting with a keynote address at an event on September 11, 2013 at DIFC. During her visit, Baroness Warsi will also explore ways of cooperation between the UK and the UAE to establish global standards that will benefit the Islamic financial centres across the world.
Baroness Warsi’s visit to the UAE is yet another indicator of the close and strong relations between the UK and the UAE.
— Dominic Jermey is the UK Ambassador to the UAE
