July 23, 2011 By KC Saleem

Islamic Economic Summit: Does it Hold out a Different Promise?



Economic summits are both remarkable and notorious. Remarkable in the sense that they are usually convened in the context (or aftermath) of several financial breakdowns and that economic think-tanks are expected to contribute tips on how to save economies from ever colliding with the icebergs of slump. Notorious in the sense that not only is the economy ever salvaged by the expertise of think-tanks but these summits themselves account for, among many other factors, the breakdowns which they try to block. Economic summits, being convened with the aim of equitable distribution of wealth, of development, of the alleviation of poverty, are lavish parties which consume huge amount of money with nothing worthwhile to offer. For example the world economic forum, in the words of Andrew Gowers, is a bean feast of pomp and platitude. Taking a further dig at the lack of prescience of the forum, Indian editor Vinod Mehta writes in his autobiography Lucknow Boy: Sadly, the WEF is increasingly looking like a dinosaur. This year, when the movers and shakers met, Tunisia, Egypt and much of the Middle East was in the throes of a democratic revolution which the wise men of Davos had neither anticipated nor authorized.

I was having these initial reflections when I got a call to attend the Global Islamic Economy Summit, being convened in Dubai this year. Besides the fact that there is the adjective Islamic in the title, I thought there would be nothing much to offer in the summit. But I had reasons why I had to go. The summit is being convened under the directions of Mohammed bin Rashid Al Maktoum, whose brilliant book on Dubai’s development My Vision: Challenges in the Race for Excellence I have translated into Malayalam. He is a no non-sense leader of nation, though the Dubai economic meltdown is being cited by critics as an example of his sloppiness (the immediate escape of Dubai from the slump with the assistance of the Prince of Abu Dhabi is an indicator of Al Maktoum’s skill of negotiation as well as of the resilience of the United Arab Emirates.

Though nothing can prove the Summit successful or failure at this stage, as the words transpired there have yet to be translated into deeds, it is relevant to report the exchanges and ideas as they would help us evaluate the direction that the much used and abused phrase ‘Islamic economics’ has taken and the promise it holds out. The summit is remarkable for the picture it describes of the economic behavior of Muslims which is motivated by their faith at least partially.

The summit held forth on Muslim spending, significance of the Islamic world and the promise it holds for economic growth and profitability. Held in Dubai’s Madinat Jumeira and attended by over 2000 delegates from across the globe, the summit appeared to have assessed the potential of Islamic economy sector and the scope of convergence for global opportunities.

A report presented by Thomson Reuters, which co-sponsors the summit, estimates the global expenditure of Muslim consumers on food and lifestyle sectors, in aggregate, to be $ 1.62 trillion in 2012 and expects to reach $ 2.47 trillion by 2018. These figures form the potential core markets for halal food and lifestyle sectors.

According to the report, the Muslim consumers globally spent $ 1088 billion in food and non-alcoholic beverage (F&B) consumption in 2012 which is 16.6 per cent of global expenditure. This is expected to grow to $ 1626 billion market by 2018. In clothing and footwear, Muslims spent $ 224 billion – 10.6 per cent of the global expenditure – and is expected to grow to $ 322 billion by 2018. In travel market, Muslims spent @ 137 billion on travel in 2012 (excluding Haj and Umrah) which is 12.5 per cent of global expenditure. This is expected to grow to $ 181 billion in five years. In pharmaceutical market, global Muslim spending was $ 70 billion in 2012 – 6.6 per cent of the global expenditure – and is expected to grow to $ 97 billion by 2018. In cosmetics and personal care, Muslim consumers are expected to spend $ 39 billion by 2018. In 2012, it was $ 26 billion.

The report says that “in addition, Islam financial assets are currently estimated to be $ 1.35 trillion in total disclosed assets (2012) and growing at 15-20% a year in most core markets. This Report estimates the potential universe of Islamic banking assets in its core markets (assuming optimal scenario) to be $ 4.1 trillion.”

Inaugurating the summit, UAE Vice President, Prime Minister and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum said that excellence will not be the result of copying others but rather by innovating new quality services and initiatives that shall add value and create an integrated Islamic economic system and boost Dubai’s competitiveness as a capital of Islamic economy.

Caption: www.uaeinteract.com

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