Dubai is in a position to vie with London to become the world’s Islamic finance hub in 2014 following an announcement of its leaders to turn the emirate into a global centre of Islamic economy, a prominent Pakistani Islamic economist has said.
Muhammad Zubair Mughal, CEO of the Pakistani-based Al Huda Centre of Islamic Banking and Economics, said he expected Islamic finance worldwide to surge to new highs of more than $two trillion in 2014.
Quoted by the Saudi Gazette newspaper, he said Shariah-compliant banking would dominate Islamic finance this year, accounting for 78 per cent. Sukuk would account for 16 per cent while the rest would cover Takaful, Islamic funds and microfinance.
“Dubai and London will be in competition in 2014 to be the global hub of Islamic banking and finance,…Kuala Lumpur (Malaysia) will also be vying for the spot,” he said.
He said Islamic finance industry growth will go double digit in 2014 which will turn the $1.6 trillion volume in December 2013 to $two trillion by the end of 2014.
“The rising trends of Islamic finance in Europe plus the rising and substantial share of international sukuk market will contribute to it,” he said.
“It is anticipated that India and China may step toward the Islamic finance in 2014 where more than 200 million Muslim populations are in search of a compatible financial system with their religious beliefs and thoughts.”
Mughal said the Islamic finance industry has not been affected by the 2008 global fiscal turmoil but added that due to the “Arab Spring” the industry has faced recession in some countries in MENA, though there are chances of their revival in 2014.
He expected rapid growth in sukuk (Islamic bonds) activity in 2014, noting that both Muslim countries and non-Muslim countries the UK, China, South Africa and Europe, will benefit from such an increase.
“2014 will prove a better period for Islamic microfinance industry as different international institutions, including Islamic Development Bank (IDB) have declared it a potential tool for poverty alleviation around the globe.”