Organization:Dubai Islamic Economy Development Centre
}} The Dubai Islamic Economy Development Centre (DIEDC) was established to articulate the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, to position Dubai as the global capital of Islamic economic jurisprudence.
As part of this priority, DIEDC is mandated to develop legal and institutional infrastructures that accelerate the development of Dubai's Islamic economy across various sectors. The centre is empowered to support government and private sector Islamic economy initiatives within seven key pillars of focus that include financial services, the halal industry, tourism, digital infrastructure, art, knowledge and standards.
DIEDC will also serve as an incubator of ideas and repository of knowledge on the Islamic economy. In addition, the centre is committed to shaping an enabling business environment that nurtures and sustains the backbone of an Islamic economy.
Global Islamic Economy
The Islamic economy has gained increasing importance due to a growing demand for products and services that are compliant with the principles of Islamic sharia. The demand for halal products, in particular, is driven by the increase in the global Muslim population, which is growing significantly faster than the global non-Muslim population.
In 2012, the volume of economic activities that are consistent with the principles of Islamic shariah was estimated to be worth US$3 trillion. The 57 member states of the Organisation of Islamic Cooperation (OIC) represented 8.9% of the global GDP in 2012. Projected growth of the OIC markets 2013 through 2018 is forecast, by the IMF, to average 6.3%, compared to the global average of 5.3%.
With a large number of Muslim countries are currently classified among the group of countries with emerging markets that are projected to register rapid growth, the promise that Islamic economies hold for global economic growth and profitability is well recognized. The emergence of an Islamic economy as a definable economic paradigm opens up a new horizon of opportunities that can benefit societies worldwide.
The Establishment of DIEDC
The Dubai Islamic Economy Development Centre (DIEDC) was established in 2013 under the supervision of His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, to develop and promote Dubai as the global capital of Islamic economy.
DIEDC is founded on the seven pillars of finance, the halal industry, tourism, digital infrastructure, art, knowledge and standards. The organization is mandated to establish a sound infrastructure and comprehensive framework to oversee the implementation of initiatives that help achieve the tenets of an enabling Islamic economy.
Through planned strategies and initiatives, DIEDC intends to engage with stakeholders to equip a generation of qualified professionals with the skills required for driving growth across the seven constituent pillars while creating a dynamic and competitive environment to fuel growth within the sector.
DIEDC's Vision is to make Dubai the capital of the Islamic economy.
DIEDC's Mission is to articulate ‘Dubai The Capital of Islamic Economy’ strategy through implementing programs that help realize the vision.
Board of directors
His Excellency Sultan bin Saeed Al Mansouri, Chairman Minister of Economy in the Federal Government of the United Arab Emirates
His Excellency Sami D Al Qamzi, Vice Chairman Director General of Dubai Economic Development Department
His Excellency Essa Kazim, Secretary General Governor of Dubai International Financial Centre (DIFC) and Chairman of Dubai Financial Market (DFM)
His Excellency Eng. Dawood Abdulrahman Al Hajiri, Member Director General of Dubai Municipality
His Excellency Dr Hamad S A Al Shaibani, Member Director General of the Department of Islamic Affairs and Charitable Activities in Dubai
His Excellency Majid Saif Al Ghurair, Member Chairman of Dubai Chamber of Commerce and Industry (Dubai Chamber)
His Excellency Essa Abdullah Al Ghurair, Member Chairman of the Awqaf & Minors Affairs Foundation
His Excellency Helal Saeed Al Marri, Member Director General of Department of Tourism and Commerce Marketing - Dubai
His Excellency Dr. Mohammed Al Zarooni, Member Director General of DAFZA
The Pillars of the Islamic Economy:
Key Pillars:
- Islamic Finance
- Halal Industry
- Islamic Lifestyle
Enabling Pillars:
- Knowledge
- Standards
- Digital Islamic Economy
Finance
The interest in Islamic finance stems from the robustness and stability it provides. Islamic finance offers significant growth opportunities in the markets of countries that have a predominantly Muslim population, as well as among communities where Muslims are a minority. Since the global financial crisis in 2008, an increasing number of voices in the strongholds of traditional banking (the US and Europe) have started speaking about the seeds of crisis inherent in traditional banking. There is also the growing consensus that had the world adopted Islamic banking, it would have been possible to avoid the crisis, or at least mitigate its severity.[citation needed] In the same context, many reports indicated a rising trend in the growth of Islamic banking services, even among non-Muslims.
The most notable examples of such rapid growth include the following:
- According to a recent Thomson Reuters report, the value of Islamic financial assets amounted to about US$1.3 trillion in 2012.
- According to the same report, total assets of Islamic banks worldwide were US$985 billion in 2012. Thomson Reuters estimates that assets of Islamic banks worldwide will continue to grow significantly over the coming years.
- Islamic finance instruments have seen an unprecedented demand over the past few years. The growth of Sukuk in global markets during the year 2012 hit a record 46 per cent, and the value of existing Sukuk by the end of 2012 was estimated at US$251 billion. Demand for Sukuk is expected to remain strong in the coming years, with double digit growth.
The Islamic finance pillar within the ‘Dubai: Capital of Islamic Economy’ strategy focuses on coordinating and managing efforts to develop the financial services sector of Islamic banking by expanding the customer base of these services and the introduction of new financial and banking instruments that meet contemporary needs and do not conflict with the principles of Islamic sharia. This is especially crucial given recent economic findings that investors are likely to allocate 50 per cent, on average, of their portfolios towards investment in Islamic finance instruments.
The Islamic finance pillar will monitor the evolution of banking services offered by Islamic banks including deposits and funding of various types, and track the development of debt instruments that conform to Islamic sharia and are tradable on stock exchanges. This includes the promotion of Sukuk as a key financing tool and a viable alternative to conventional bonds. It also involves encouraging Islamic financial institutions to introduce innovative finance instruments.
Halal Industry
‘Halal’ defines a consumer product or a group of consumer products where the sharia principles and measures are observed throughout the various stages of the supply chain process, including the production, transportation, and distribution phases.
A ‘Halal Certificate’ is currently granted worldwide to more than 500 products that include food, cosmetics, pharmaceuticals, textiles, and leather goods. Muslims globally spent US$1.62 trillion on halal products in 2012. This is expected to grow to US$2.47trillion in 2018.
While such high demand provides greater opportunities for growth in the halal products industry, it offers an enormous incentive to make the development of the halal products industry one of the central drivers in the implementation of ‘Dubai: Capital of Islamic Economy’ strategy.
The halal products pillar in the ‘Dubai: Capital of Islamic Economy’ strategy focuses on enhancing efforts to ensure the development and growth of the halal products sector by expanding the range of raw materials, and acting as a global gateway for producers and consumers.
The halal products pillar will also oversee the creation of a world class accreditation and certification platform to certify such products globally through testing laboratories that utilize the best available skills in this field.
Islamic Lifestyle
Dubai has consistently aimed to be a world leader in preserving genuine Islamic art and Islamic heritage by promoting heritage events and encouraging Islamic innovations. Dubai's Islamic architectural designs and artistic creations have attracted the attention of design experts across the globe. Architects worldwide today seek to compete by innovating and creating radical, out-of-the-box designs.
Modest Islamic fashion and clothing have simultaneously gained international appeal and the market for such fashion was valued at over US$224 billion in 2012, translating to nearly 11 per cent of the global expenditure on clothing and footwear.
Given the potential, the Dubai Islamic Economy Development Centre will promote a number of activities to coordinate with stakeholders in ensuring the launch of these initiatives in the coming period:
- Develop and promote the Islamic fashion sector as a key component within the broader fashion strategy.
- Build partnerships with international museums to display Islamic art in Dubai.
- Build partnerships with international auction houses to develop trade in Islamic art.
- Focus on Islamic Art education in academic institutions.
- Launch awards for Islamic architecture.
- Launch competitions in Islamic fashion design.
The global tourism industry has begun to recognize the growing opportunities of the family tourism market, and Islamic tourism in particular. According to Thomson Reuters report, the volume of spending by Muslim tourists was estimated at about US$137 billion in 2012 (excluding the Hajj and Umrah), which accounts for 12.5 per cent of global tourism expenditure.
Amidst this scenario, international hotels in Muslim-majority countries now prioritize providing an environment that appeals to the entire family. As part of this priority, specific facilities have been integrated for Muslims such as places for prayer and private, secluded beach resorts for women, as well as heritage tourism packages.
The diverse tourist offerings and vignettes of Islamic heritage that Dubai offers to travelers have helped positioned the emirate among the most popular international destinations for family tourism today. The ‘Dubai: Capital of Islamic Economy’ strategy will further streamline Dubai's tourism sector, in conjunction with stakeholders in the field, and make it the preferred destination globally for family tourism.
Digital Infrastructure
Innovative technologies have always played a key role in shaping developed economies. In the last three decades, several leading institutions have ensured that sufficient funding is allocated to the development of innovative technologies, which in turn contribute to the growth of their respective economies. Dubai is an established pioneer in this field and has launched iconic projects such as the Dubai Internet City and Dubai Silicon Oasis that attract leaders in the digital economy arena to develop these technologies from Dubai.
Building on this success, the ‘Dubai: Capital of Islamic Economy’ strategy seeks to win leadership status for Dubai in the Islamic digital economy sector by attracting new players from around the world and supporting them with the requisite infrastructure to ensure the sustained growth of the key economic sector.
Knowledge
Dubai is a key global economic hub. It is therefore necessary to develop the human capital required to fuel it. It is also crucial to provide access to research that would be the basis of all new ideas and innovations that emerge from Dubai as part of a vision to position the emirate as a global reference point for anyone seeking information on the nuances of an Islamic economy.
The Dubai Islamic Economy Development Centre will launch initiatives that further develop the educational infrastructure for the Islamic economy. This pillar aims to leverage Dubai's achievements in creating conducive academic environments through free zone clusters such as the Dubai International Academic City and Dubai Knowledge Village for global institutions to operate from both regionally and on a more macro level.
Establishing a world class research centre based in Dubai and covering various sectors of the Islamic economy is also a key focus area within this pillar.
The centre will collaborate with stakeholders to:
- Establish Islamic economy centers within universities with the aim of offering undergraduate and post graduate degrees, as well as training in specific Islamic economy sectors and research capabilities.
- Develop an online comprehensive portal for information and news on the global Islamic economy.
Standards
Islamic standards are controls that govern contracts and economic activities linked to the provisions and principles of Islamic law.
Dubai: Capital of Islamic Economy's strategy for commercial and industrial standards seeks to establish the trust and credibility of products that fully conform to sharia principles.
This strategic pillar of ‘Dubai: Capital of Islamic Economy’ has been mandated with developing control and audit systems as well as standards that all institutions and companies active in the Islamic economy sector will be required to endorse. The centre will also implement any new standards that might be required to facilitate the work of these companies, including commercial and industrial criteria and specifications to which all products and services must comply with to ensure their continued conformity to sharia principles.
The provision of such a system of standards that covers all aspects of the Islamic economy sector will ultimately facilitate the operation of economic enterprises and institutions in a safe environment at minimum risk.
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