Islamic finance pits UAE economy head and shoulders above the rest
Sheikh Mohammed rings the bell at the Dubai Financial Market on Wednesday. (Image courtesy: WAM news agency)
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Dubai’s Sheikh Mohammed bin Rashid al-Maktoum aims to position the UAE in the world’s top economies by promoting the country as a hub for Islamic finance, reported local newspaper Khaleej Times on Wednesday.
Sheikh Mohammed spoke about the initiative to encourage sukuks, entitled ‘Transforming Dubai into a Global Centre for Islamic Bonds,’ at the Dubai Financial Market on Wednesday.
He asserted that the UAE “seeks to maintain its position as the overall top-ranked economy through such projects and initiatives.”
“Transforming Dubai into a global center for Islamic sukuks is intended to cement confidence in our economy among international financial circles,” he carried on to say.
Sheikh Mohammed stressed the importance of activating the role of Islamic economy in the UAE’s national economy
“Today, Dubai possesses all the potential and privileges that qualify it to achieve its goal of becoming a global center for Islamic sukuks. We will work on completing the necessary organizational framework and mobilize efforts and energies, national cadres and experts to give this sector the anticipated momentum.”
The new initiative will encourage organizations to issue sukuks instead of bonds and builds on Sheikh Mohammed’s January declaration to create an Islamic finance council to regulate Shariah-compliant equity — and his desire to integrate Islamic economy as part of the overall Dubai economy.
Islamic banking experts share the view that the UAE has the necessary ingredients to emerge as the capital of Islamic finance, in fact Shariah compliant banks already account for 15 percent of the banking activity in the country.
“Dubai is an established financial hub both for the Middle East and internationally. The initiative announced by Sheikh Mohammed will provide further impetus for Dubai to raise its prominence as a center of Islamic finance. The need for improved infrastructure in Africa and the Arab Spring countries will create greater demand for capital raising in the future, including through use of the sukuk. Dubai is in a strong position to capitalize on this demand as a global capital markets hub,” said Afaq Khan, chief executive officer, Standard Chartered Saadiq.
Also present at Wednesday’s event were Minister of State for Cabinet Affairs Mohammed Abdullah al-Gergawi, Minister of Economy Sultan bin Saeed al-Mansouri and a number of key officials, bankers and businessmen.
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