A new study shows that Malaysia is at the center of the world’s global Islamic economy even though the United Arab Emirates (UAE) is fast catching up on it.
The economic gap between the two leading countries of the Islamic economic world is closing down according to the study titled “State of the Global Islamic Economy Report 2018/19,” commissioned by the Dubai Islamic Economy Development Centre (DIEDC).
The Islamic economy comprises of those Muslim-majority countries which where there os existence of a financial sector and those that are governed according Islamic law.
“Although Malaysia once again tops the Global Islamic Economy Indicator, the UAE ranks in first place across the remaining five sectors — halal food, halal travel, modest fashion, halal media and recreation, and halal pharmaceuticals and cosmetics — compared to three sectors in 2017/18,” the research said. The report also explored the current situation of the quality of the entire Islamic economy ecosystem which included studies about social considerations relative to a country’s size.
A dominant Islamic finance ecosystem supports the lead for Malaysia. But according to the man tasked with that job, the gap between Malaysia and the UAE is getting narrower. UAE comprises of seven emirates including Abu Dhabi and Dubai.
“The Islamic economy sector has grown in importance over the last few years, and the year-on-year growth has been quite significant,” Abdulla Mohammed Al Awar, the CEO of the Dubai Islamic Economy Development Centre, said.
He aim of the center is to develop Dubai as the centre for the global Islamic economy, and make Dubai as the most important growth engines of of Islamic finance as well as a provider of solutions for the halal industry.
“Ever since the launch of our strategy in 2013, we’ve witnessed the local growth of the Islamic economy in the Emirate of Dubai,” Al Awar added.
“We did a measure of that in 2017, and realized that the contribution of the Islamic economy sectors in the Emirate of Dubai was close to 8.3 percent, which is close to $9 billion in terms of the contribution to GDP (gross domestic product), so that’s significant that there is another layer of economic contribution that was in place after that vision,” Al Awar said.
The report noted a rise in penetration of Islamic banking, particularly in the UAE, which has been able to draw attention of both Muslims and non-Muslims because the system is intently focused on implementing socially-responsible practices and investments.
“The value of assets in the burgeoning sector was estimated at $2.4 trillion in 2017, and is expected to surge to $3.8 trillion by 2023,” the report said. To lean into this trend, the DIEDC has plans for developing the sukuk (Islamic bond) market and increasing sukuk issuances and listings in Dubai.
According to a recent statement by Hamed Ali, the CEO of NASDAQ Dubai, global Islamic economy has been boosted by some of the very important measures taken by Dubai which includes increased activities in all of the areas of Islamic finance.
(Adapted from TheSunDaily.com)