Dubai’s Ruler issued a decree yesterday to launch an Islamic economy development centre, overseen by a board of senior figures within the federal and local Government.
The move marks a step forward in the emirate’s efforts to become the global centre of the Muslim world economy.
Under the decree issued by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, the centre will have the legal capacity to promote Dubai as a capital for the Islamic economy.
According to the official news agency Wam, the centre’s role will include the “promotion of economic activities compatible with Islamic law in goods and financial service sectors, as well as the non-financial sector as a main pillar on which the economy of the emirate is based”.
Sheikh Mohammed also issued a decree to form the centre’s board of directors, to be chaired by Mohammed Abdullah Al Gergawi, the Minister of Cabinet Affairs in the UAE federal Government. Mr Al Gergawi is a close adviser to Sheikh Mohammed through his other role as chairman of Sheikh Mohammed bin Rashid Al Maktoum Executive Office and Foundation.
Sami Al Qamzi, the director general of Dubai Department of Economic Development, was named as vice chairman of the board. Essa Kazim, the chairman of Borse Dubai and Dubai Financial Market, will be the board’s secretary general.
With a potential value of US$6.7 trillion, the Islamic economy is one of the biggest concentrations of economic power in the world.
Sheikh Mohammed has set a three-year timetable for the emirate to be the centre of the Muslim world economy.
“Historically, it’s been Bahrain that has been a centre for Islamic finance but since the unrest there in 2011 Dubai has gained market share across all sectors,” said Liz Martins, senior economist at HSBC in the Middle East and North Africa. “Dubai can play on its developed services and commercial sectors as well as its political stability.”
According to Wam, as well as setting out a strategic plan for the development of the sector in the emirate, it will also have regulatory powers.
It will draw up standards to judge the extent to which any commodity or financial service complies with the provisions of Sharia law. The centre will promote such standards locally and globally.
Research will also be conducted by the centre into the contribution of Islamic activities to the emirate’s GDP.
Dubai’s economy has rebounded robustly from a debt crisis in 2009, led by brisk activity in trade, tourism and retail. Its economy swelled by 4.9 per cent in the first half of this year, according to official estimates.
Now the emirate hopes to add an extra edge to its competitiveness through becoming a major centre for the world’s 1.6 billion Muslims.
According to Wam, an executive director will be appointed at the centre, appointed by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai.
A report released last month by the Dubai authorities and Thomson Reuters, estimated Muslim consumers’ global expenditure on the media, food and lifestyle sectors (including cosmetics and tourism) at $1.62tn last year. It puts the figure at $2.47tn by 2018.
The report also put the value of Islamic financial assets at $1.35tn, which is expected to grow 15 to 20 per cent per year in core markets.