For UAE, Islamic economy is the way to go

As the world reels under economic unpredictability and the market volatility grows, wisdom lies in tapping the benefits of Islamic economy. The Islamic bonds (sukuks) issued by UAE banks are being ranked as one of the world’s best-performing instruments. We will see rapid expansion of Islamic finance as more and more customers are added to the already huge and solid base of Islamic banking customers in the next few years.
The high growth rate of Islamic banking assets is a very positive sign. Sometime back, a report indicated that the compound annual growth rate or CAGR for Islamic banking assets in the UAE is expected to be about 17% over the period 2013-18. This shows there is a marked shift from the conventional financial system to Islamic finance.
While Islamic economy strides ahead, it is only when we keep pace with its changing dynamics can we succeed. There has to be a strategy that takes into account Islamic products, along with Islamic finance. Islamic economy doesn’t mean banking alone, it comprises halal foods and tourism. The UAE has to assume a pioneering role in halal research which will give more options to the travel industry. The country should invest heavily to woo more tourists who opt for halal-friendly products. Besides this, Islamic fashion, art and design also need to be given the right impetus. Islamic values-driven media and recreation ecosystem must be pushed further and brought into the mainstream. Logistics, distribution channels and marketing of the sector need to be backed.
For sustained growth, we have to keep promoting Islamic economy as a whole rather than giving an isolated push to just one aspect.
‘Salaam Gateway’, the online platform for all Islamic economy-related stuff launched last year, is a wonderful business tool. It not only helps a trader spread but is a great way to connect with the other global stakeholders in the business. More initiatives like Salaam Gateway’ are the need of the hour. They will boost the ethics and culture behind Islamic banking. It is crucial that the global community realizes the potential and significance of such an economy at a time when clouds of uncertainty loom over global economy. Islamic economy is our only hope to bring about sustainable development for our children.
Islamic banking profit pool will touch $30.5 billion by 2018 with higher retail focus. It is important for the players of Islamic economy to understand that innovation will hold the key to shape the growing sector. The UAE needs to consolidate its efforts by taking novel steps to globalize the Islamic economy and propound unified standards that are recognized as well followed globally. For this, a roadmap has to be chalked out. The plan of action must take a futuristic view while taking steps to make the sector popular worldwide. Sharing its knowledge and experience with the world would provide more opportunities to other emerging players.
Last year, the UAE was ranked as having one of the healthiest Islamic economy environments globally. The third ‘State of the Global Islamic Economy Report’ (SGIE 2015-2016) underlined the outstanding growth of the Islamic economy across strategic sectors, while giving the UAE an emphatic thumbs up in almost all areas that go behind its development.
With the UAE taking on greater global importance in the Islamic economy, it is imperative that the country will adopt more dynamic measures and set an exceptional precedent for the world to emulate.