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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In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
A new relationship with the old country
Treaty of Friendship between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates
The United kingdom of Great Britain and Northern Ireland and the United Arab Emirates; Considering that the United Arab Emirates has assumed full responsibility as a sovereign and independent State; Determined that the long-standing and traditional relations of close friendship and cooperation between their peoples shall continue; Desiring to give expression to this intention in the form of a Treaty Friendship; Have agreed as follows:
ARTICLE 1 The relations between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates shall be governed by a spirit of close friendship. In recognition of this, the Contracting Parties, conscious of their common interest in the peace and stability of the region, shall: (a) consult together on matters of mutual concern in time of need; (b) settle all their disputes by peaceful means in conformity with the provisions of the Charter of the United Nations.
ARTICLE 2 The Contracting Parties shall encourage education, scientific and cultural cooperation between the two States in accordance with arrangements to be agreed. Such arrangements shall cover among other things: (a) the promotion of mutual understanding of their respective cultures, civilisations and languages, the promotion of contacts among professional bodies, universities and cultural institutions; (c) the encouragement of technical, scientific and cultural exchanges.
ARTICLE 3 The Contracting Parties shall maintain the close relationship already existing between them in the field of trade and commerce. Representatives of the Contracting Parties shall meet from time to time to consider means by which such relations can be further developed and strengthened, including the possibility of concluding treaties or agreements on matters of mutual concern.
ARTICLE 4 This Treaty shall enter into force on today’s date and shall remain in force for a period of ten years. Unless twelve months before the expiry of the said period of ten years either Contracting Party shall have given notice to the other of its intention to terminate the Treaty, this Treaty shall remain in force thereafter until the expiry of twelve months from the date on which notice of such intention is given.
IN WITNESS WHEREOF the undersigned have signed this Treaty.
DONE in duplicate at Dubai the second day of December 1971AD, corresponding to the fifteenth day of Shawwal 1391H, in the English and Arabic languages, both texts being equally authoritative.
Signed
Geoffrey Arthur Sheikh Zayed
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
TICKETS
Tickets start at Dh100 for adults, while children can enter free on the opening day. For more information, visit www.mubadalawtc.com.
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
Story of 2017-18 so far and schedule to come
Roll of Honour
Who has won what so far in the West Asia rugby season?
Western Clubs Champions League
Winners: Abu Dhabi Harlequins
Runners up: Bahrain
Dubai Rugby Sevens
Winners: Dubai Exiles
Runners up: Jebel Ali Dragons
West Asia Premiership
Winners: Jebel Ali Dragons
Runners up: Abu Dhabi Harlequins
UAE Premiership Cup
Winners: Abu Dhabi Harlequins
Runners up: Dubai Exiles
Fixtures
Friday
West Asia Cup final
5pm, Bahrain (6pm UAE time), Bahrain v Dubai Exiles
West Asia Trophy final
3pm, The Sevens, Dubai Hurricanes v Dubai Sports City Eagles
Friday, April 13
UAE Premiership final
5pm, Al Ain, Dubai Exiles v Abu Dhabi Harlequins
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Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
UAE currency: the story behind the money in your pockets
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
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