x Abu Dhabi, UAEMonday 22 January 2018

Islamic finance goes to The City

In the shadow of an instantly recognisable skyline, world leaders, industry heads and global delegates gather today for the start of the 9th World Islamic Economic Forum (WIEF).

Arab women shopping on London’s busy Oxford Street. The 2.78 million Muslims in Britain contribute £31 billion (Dh185bn) to the country’s economy. Peter Dench / Getty Images
Arab women shopping on London’s busy Oxford Street. The 2.78 million Muslims in Britain contribute £31 billion (Dh185bn) to the country’s economy. Peter Dench / Getty Images

In the shadow of an instantly recognisable skyline, world leaders, industry heads and global delegates gather today for the start of the 9th World Islamic Economic Forum (WIEF).

The venue is not one you might expect. That skyline is not dominated by mosques and minarets, but by the Shard and the London Eye.

The forum, which insiders like to call the Davos of the Muslim world, is being held for the first time in a country that does not have a Muslim majority.

It is a significant departure for the not-for-profit organisation based in Kuala Lumpur that “aims to build bridges through business”. In the past it has been held in Malaysia, Kazakhstan, Indonesia, Kuwait and Pakistan.

Bringing the discussion into the non-Muslim world for the first time is a risk, but a calculated one.

“London is home to a vast multicultural population and a great gateway for trade and commerce, finance, culture, ideas and philosophy,” says the chairman of the WIEF, Tun Musa Hitam, the former deputy prime minister of Malaysia.

“It represents our first step in promoting direct engagement in Europe as much as with it.”

Just how much Muslims contribute to the wealth and economy of the host country is underlined by a report issued on the eve of the forum by the Muslim Council of Britain, the UK’s largest umbrella body of Muslim organisations.

The report, called The Muslim Pound — celebrating the Muslim contribution to the UK economy, reveals that Britain’s 2.78 million Muslims have a spending power of £20.5 billion (Dh121bn), and contribute more than £31bn to the UK economy.

In London there are more than 13,000 Muslim-owned businesses and the richest of the country’s 10,000 Muslim millionaires have liquid assets worth £3.6bn.

For Farooq Murad, the secretary general of the MCB, this “positive contribution of Britain’s Muslim population needs to be vigorously highlighted”.

For London, though, the three-day forum is a chance to position itself as the western hub of the Islamic finance industry, just as Dubai is doing on an international level.

Sheikh Mohammed bin Rashid, the Vice President and Ruler of Dubai, announced plans this year to make Dubai the capital of the world Islamic economy. In November he will host the inaugural Global Islamic Economy Summit, which describes itself as the first forum for Islamic finance sectors and the halal industries.

The summit’s aim is to identify a road map for the future of the Islamic economy and it will also be the occasion for the Global Islamic Economy Awards, whose purpose is to build the Islamic economy through the recognition of pioneering companies.

London and Dubai are not the only players. In August, the Malaysian prime minister, Najib Razak, who is a guest at this week’s forum in London, announced a new brand identity for its Islamic finance industry – Malaysia: World’s Islamic Finance Marketplace.

This is a high stakes game. The value of Islamic finance and investment is expected to reach US$2.5 trillion (Dh9tn) by 2017 and the Islamic economy as a whole is estimated to be worth $8tn.

Yet there is more than finance to the story of the WIEF coming to the banks of the Thames river.

The mayor of London, Boris Johnson, credits British Muslims with making the UK an attractive prospect for the WIEF, bringing investment and building export ties, both of which should significantly bolster the UK economy.

This makes it an important good-news story in the UK, where the political climate for Muslims can feel fraught.

In May, the murder in Woolwich of an off-duty soldier sparked anti-Muslim riots and attacks on mosques, Islamic community centres and directly against Muslims.

This year’s three-day event is the usual mix of high-profile plenary sessions, networking and masterclasses on the themes of global opportunities, smart economies and smart societies.

Alongside the main programme will run the Marketplace of Creative Arts, Mocafest, which showcases Muslim arts talent from around the world.

Established in 2003, the WIEF was set up as the business face of the Organisation of Islamic Cooperation (OIC), with the goal of enhancing the economic well-being of the people of Muslim nations and Muslim communities worldwide through trade and business opportunities.

This was to be done by packaging the Muslim world as an attractive trade partner and making the forum a site for the exchange of ideas, information and knowledge as well as the opportunity to do business.

“Collaboration is the salient feature of 21st century international relations. Business partnerships can become genuine bridges towards peace and prosperity between the Muslim and non-Muslim worlds,” says the organisation.

At last year’s forum, deals worth an estimated £5.8 billion were struck and Mr Johnson is aware of the opportunity the event brings to Britain’s capital.

“The presence of WIEF in London recognises the UK’s position as a major centre of Islamic finance,” he says. “Islamic finance is already playing a major role in shaping the economic and physical landscape of our capital city. The newly opened Shard, the extraordinary redevelopment of Battersea power station and the Olympic Village were paid for at least in part by Sharia-compliant finance.”

London’s mayor says he is honoured that his city has been selected and, after the success of the Olympics last year, he is keen to emphasise that the capital can “stage world-class events with flair”.

While the event does not have the scale of the Olympics, it certainly has the diversity. On the guest list are 17 global leaders, 11 ministers, five central bank governors and more than 1,500 delegates from 120 countries.

Dignitaries include Sheikh Hamdan bin Mohammed bin Rashid, Crown Prince of Dubai, King Abdullah of Jordan, Prince Salman bin Hamad bin Isa Al Khalifa, Crown Prince of Bahrain, and the presidents of Afghanistan, Kosovo and Bangladesh.

Although the forum will cover a broad range of subjects of relevance to the business world and the halal lifestyle, of prime interest is Islamic finance, which is to dominate discussions across the three days.

The UAE is represented by Sultan Al Suwaidi, governor of the Central Bank, and Abdullah Saleh, governor of the Dubai International Financial Centre. The governors of the central banks of Malaysia, Oman and Nigeria will also be part of the forum.

“With some of the world’s fastest growing markets in Muslim majority countries, demand for Islamic finance is growing and this presents major opportunities for the UK,” says the UK prime minister, David Cameron.

“I am determined that we do everything we can to make Britain the best place to start, grow and do business and this demonstrates that we are a global partner of choice for Islamic finance with the expertise, innovation and services that are fundamental to the industry’s growth.”

With backing coming right from the top, Islamic finance is a particularly hot topic in Britain. An Islamic Finance Task Force was established in March to encourage the setting up of Sharia-compliant products. Just last week Mr Cameron announced plans to make government finance schemes that were compatible with Islamic finance principles available to Muslim students and entrepreneurs.

Among those hoping to do business at this week’s forum is the Dubai entrepreneur Shakeeb Saqlain, 32, chief executive of the website IslamicBanker.com.

He realised when he worked at Bloomberg that there was a gap in the tools available to Islamic finance industry professionals.

“I saw first-hand how businesses rely on timely, accurate information to make major decisions and take advantage of business opportunities when they appear,” Mr Saqlain says.

“But in Islamic banking, and more generally in OIC markets, information is not easily accessible and communication is a burden,”

He set up his website to fill that gap. It hosts 15,000 members across the world, providing them with dedicated financial tools, such as Sharia stock screening and a sukuk monitor, and is so successful that the updated site he is launching at the forum will be by invitation only.

This notion of using business to bring people together also underpins the report on the Muslim Pound and is at the heart of the forum’s mission.

“We staunchly believe that when people get together for business, they forget their political, religious and ideological differences,” says Mr Hitam. “There is one compelling commonality – and that is the impetus to be peaceful and prosperous. This is what matters most.”