Sabah Al Binali: Many challenges to becoming a hub of Islamic economy



Three years ago plans were launched for the emirate of Dubai to become the global capital of the Islamic economy. This month Dubai hosted the Global Islamic Economy Summit. This is a good point at which to review how Dubai, which has usually been successful in managing its economic projects, has progressed.

When such a challenging vis­ion is set the technocrats must first interpret this vision into a set of key performance indicators (KPIs) that everyone agrees upon. I have searched for such KPIs and have only been able to find newspaper reports from this month that give the growth of the sukuk market in Dubai: from Dh26 billion to Dh496bn in the past three years.

Normally the activity of a fin­ancial market is measured by two main statistics: the size of the market as a percentage of the global market and the ­value traded as a percentage of the size of the market.

The newspaper reports gave the size of the market but without referencing the total global market.

For value traded I went to the website of the relevant exchange, Nasdaq Dubai.

The ­total value traded for Thursday, October 20, 2016, the last trading day of last week, was given on the website as zero. This is because almost all global trade in sukuk is over the counter rather than via an open market platform.

The exchange is developing a sukuk trading platform and this month it launched a global sukuk index in an effort to bring more clarity to the market. This should in time develop the necessary liquidity, which is the most important KPI.

I decided to try a different method to understand how the Islamic economy is developing. Two ideas that seemed worthy of investigation were: 1. Sukuk are just a way of borrowing, so why not look at the main lending channel in the country – banks; and, 2. One would think that Saudi Arabia might be the primary candidate for the glo­bal capital of the Islamic economy. It is hard to argue with the location of The Holy Kaaba, Islam’s most sacred site, which sits in the centre of Al Masjid Al Haram, Islam’s most sacred mosque.

Clearly the relevant statistic was to compare the size of Sharia-compliant bank lending in Dubai with that of Saudi Arabia.

The Central Bank of the UAE does not differentiate between banks in different emirates but does separate the reporting of conventional banks from that of Islamic banks. According to its August monthly statistical bulletin, which it says are preliminary numbers, the total assets of Islamic banks was Dh493bn.

The Saudi Arabian Monetary Authority does not segregate banks the same way, so I started adding up the assets of the banks that are Islamic according to their second-quarter financial reports for this year.

Three banks combined – Al Rajhi, with the equivalent of ­Dh331bn; Al Inma, Dh98bn; and Al Jazira, Dh68bn – are equal in size to the whole Islamic banking sector of the UAE. Saudi Arabia has nine other banks, some of which are pure Islamic, some of which have Islamic operations. It seems clear that Sharia-compliant lending in Saudi dwarfs the UAE, let alone Dubai.

Saudi Arabia’s Islamic fin­ancial activity does not end with its domestic banks.

The Islamic Development Bank (IDB) represents everything that one would want in an Islamic economy centre, and it is based in Saudi.

The IDB has an asset base of about Dh76bn. It has two subsidiaries focused on Sharia-compliant trade. It has regional offices in Morocco, Malaysia, Kazakhstan and Senegal. It has a membership of 56 countries from four continents. It has a Waqf (Islamic Trust) foundation. It has an education programme that has been in operation for 40 years.

Not only is the IDB based in Jeddah, but Saudi Arabia is the most important of its 56 members. The bank’s website shows that Saudi Arabia holds 23.5 per cent of shares in the bank, while the UAE holds 7.5 per cent.

It took me less than half an hour to find all of these facts, and they do not provide much hope. They are also solely foc­used on the financial sector of an Islamic economy. The approach by the Dubai execution team reminds me of the execution of the DIFC. Some beautiful buildings. Some overpriced cafes. But an anaemic market compared with Saudi Arabia’s.

Nothing can be global or international if it is not connected to its neighbours. We still haven’t connected our equity markets inside the UAE. How are we going to connect to the rest of the world?

We can overreact and treat an honest analysis with hostility or we can break out of our denial, accept reality and remember that we are one nation.

Sabah Al Binali is an active investor and entrepreneurial leader with a track record of growing companies in the Mena region. You can read more of his thoughts at al-binali.com.

This column is also appearing in our sister paper, Aletihad.

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UAE v United States, T20 International Series

Both matches at ICC Academy, Dubai. Admission is free.

1st match: Friday, 2pm

2nd match: Saturday, 2pm

UAE squad: Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Rameez Shahzad, Amjad Gul, CP Rizwan, Mohammed Boota, Abdul Shakoor, Ahmed Raza, Imran Haider, Sultan Ahmed, Zahoor Khan, Amir Hayat

USA squad: Saurabh Netravalkar (captain), Jaskaran Malhotra, Elmore Hutchinson, Aaron Jones, Nosthush Kenjige, Ali Khan, Jannisar Khan, Xavier Marshall, Monank Patel, Timil Patel, Roy Silva, Jessy Singh, Steven Taylor, Hayden Walsh

Springtime in a Broken Mirror,
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Funding: $200,000 plus undisclosed grant
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Sinopharm vaccine explained

The Sinopharm vaccine was created using techniques that have been around for decades. 

“This is an inactivated vaccine. Simply what it means is that the virus is taken, cultured and inactivated," said Dr Nawal Al Kaabi, chair of the UAE's National Covid-19 Clinical Management Committee.

"What is left is a skeleton of the virus so it looks like a virus, but it is not live."

This is then injected into the body.

"The body will recognise it and form antibodies but because it is inactive, we will need more than one dose. The body will not develop immunity with one dose," she said.

"You have to be exposed more than one time to what we call the antigen."

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The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

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- set out well ahead of time

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- enter the right cabin. The train may be too busy to move between carriages once you're on

- don't carry too much luggage and tuck it under a seat to make room for fellow passengers

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Next time when procastinating online remember that you can save thousands on paying for a personal trainer and a gym membership simply by watching YouTube videos and keeping up with the latest health tips and trends.

As social media apps are becoming more and more consumed by health experts and nutritionists who are using it to awareness and encourage patients to engage in physical activity.

Elizabeth Watson, a personal trainer from Stay Fit gym in Abu Dhabi suggests that “individuals can use social media as a means of keeping fit, there are a lot of great exercises you can do and train from experts at home just by watching videos on YouTube”.

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Torrena said that “most people believe that dieting and keeping fit is boring”.

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