China’s Silk Road strategy can help Islamic economy

Dubai: Companies in the Islamic economy should capitalise on growth opportunities presented by China’s One Belt One Road initiative, which can be used to introduce Asian markets to Islamic finance products, an expert has said.

Abdullah Al Awar, chief executive officer of Dubai Islamic Economy Development Centre, said in a speech at Hamdan Bin Mohammad Smart University on Monday that there’s “great potential” to build on the UAE’s existing ties with China and other countries that influence the Silk Road initiative.

China’s One Belt One Road initiative is a development strategy led by the country’s government. It aims to revive the ancient Silk Road to connect various countries and hence, boost global trade.

The CEO said that China’s economic position and its “significant impact on the global economic policy” enable it to have a greater impact on global finance.

Al Awar suggested multiple ways to boost ties with China including creating joint coordination committees to collaborate on establishing global standards for Islamic finance products, mainly for sukuk.

“In addition to supporting and strengthening the efforts of the UAE-China Council in providing the required finance for the Silk Road initiative, especially in the area that covers the region, we can look at establishing a joint Islamic finance platform between both countries to be based in Dubai,” Al Awar said.

He also suggested establishing an Islamic Arab-Asian bank based in Dubai to provide the liquidity required for financing projects, especially those related to this region. Another recommendation was to create a joint research centre to assess the needs of the region and countries situated on the Silk Road initiative.

“The huge projects offered by the Silk Road initiative offer incredible opportunities to boost global economy, develop the infrastructure of the emerging countries, increase production and trade, and offer jobs and opportunities that will eventually reduce unemployment, poverty, and stagnation while raising the purchase power of people,” the CEO said.