Is­lamic econ­omy gain­ing huge rel­e­vance world­wide

The Pak Banker - - MARKETS/SPORTS -

With Is­lamic fi­nance rapidly chang­ing the way we do busi­ness to­day and go­ing in­creas­ingly main­stream, the Is­lamic econ­omy has proven its ca­pa­bil­ity to not just drive na­tional eco­nomic growth but also help heal the wounds in the af­ter­math of fi­nan­cial crises that have left mil­lions of peo­ple across the world dis­il­lu­sioned and seek­ing a more or­gan­ised and mean­ing­ful eco­nomic sys­tem.

Un­for­tu­nately, it took the global fi­nan­cial cri­sis of 2008 for the world to truly un­der­stand the po­ten­tial that lies within the Is­lamic econ­omy ecosys­tem. Both Mus­lims and nonMus­lims to­day are wak­ing up to the fact that con­ven­tional fi­nance with its un­fet­tered mar­ket mech­a­nisms is not al­ways the most ef­fec­tive means to en­sur­ing long-term sus­tain­able growth. With the plum­met­ing of oil prices and the volatil­ity of the stock mar­kets, the Is­lamic econ­omy is in­creas­ingly gain­ing mo­men­tum and tremen­dous global rel­e­vance for its tenets of an eth­i­cal and just fi­nan­cial sys­tem.

Let us ex­am­ine some aspects of Is­lamic econ­omy that have given it this cred­i­bil­ity and con­text within a rel­a­tively short span of time.

In its ethics and val­ues, the Is­lamic econ­omy fo­cuses on the real value of money, and has an inherent sense of fair­ness, shared risk and zero tol­er­ance for spec­u­la­tion. In ad­di­tion, the Is­lamic econ­omy's prin­ci­ple of so­cial dis­tri­bu­tion of funds has cap­tured the at­ten­tion of a world seek­ing a more sta­ble and re­spon­si­ble eco­nomic fu­ture. Peo­ple have tra­di­tion­ally re­mained cyn­i­cal about the pos­si­bil­ity of in­no­va­tion in a Sharia-com­pli­ant econ­omy. My mes­sage to scep­tics and naysay­ers is sim­ply this: Adopt­ing a more eth­i­cal and re­spon­si­ble ap­proach to busi­ness and in­vest­ments is in it­self an in­no­va­tive step that will leave be­hind a legacy our next gen­er­a­tion will thank us for.

While the world to­day is seek­ing in­no­va­tive and sus­tain­able so­lu­tions for the preser­va­tion of nat­u­ral wealth, Is­lam had cen­turies ago adopted sus­tain­abil­ity as the core of all eco­nomic and so­cial de­vel­op­ment prac­tices.

What is in­no­va­tion, af­ter all? And why should we place it at the top of the agenda? Sim­ply put: In­no­va­tion is about re­defin­ing a prod­uct's value and mean­ing. I be­lieve we all agree that in­no­vat­ing sim­ply for the sake of in­no­va­tion makes no sense.

In­no­va­tion must ad­dress cur­rent chal­lenges, such as en­vi­ron­men­tal con­cerns, job cre­ation and eco­nomic re­cov­ery. It has to be log­i­cally sound. It has to drive busi­ness - not to what is pop­u­lar but to what is right, to fo­cus on qual­ity rather than quan­tity, and on the com­mon good rather than in­di­vid­ual prof­its.

In the last three years, we have wit­nessed Is­lamic econ­omy sec­tors buzzing with in­no­va­tion and en­trepreneur­ship. The UAE has been at the fore­front of pro­mot­ing an econ­omy be­yond oil, sug­gest­ing the need to think of sus­tain­abil­ity as the way for­ward in all busi­ness trans­ac­tions. This vi­tal change in the cul­ture of in­vest­ment will even­tu­ally shape in­vest­ment trends and in­flu­ence the emer­gence of a sus­tain­able in­vest­ment land­scape.

While the fast-grow­ing and pre­dom­i­nantly young Mus­lim pop­u­la­tion of 1.7 bil­lion rep­re­sents a ma­jor client base for busi­nesses around the world, the am­bi­tious new gen­er­a­tion it­self of­fers hope of re­ju­ve­nat­ing global eco­nomic growth.

From the UAE, In­done­sia and Malaysia to the United States, the UK and France, and ev­ery­where in-be­tween, bud­ding en­trepreneurs are con­tribut­ing to so­cial and eco­nomic de­vel­op­ment in cre­ative ways - at a time when the sole in­ten­tion of all busi­nesses around the world is to pri­ori­tise eco­nomic di­ver­si­fi­ca­tion and pro­mote non-oil growth. Whether it is in mo­bile bank­ing, e-com­merce, tech­nol­ogy, medicine, or halal prod­ucts, com­pa­nies are com­pet­ing to come up with new so­lu­tions to cre­ate wealth, gov­erned by sus­tain­abil­ity and re­spon­si­ble prac­tices. At the Dubai Is­lamic Econ­omy De­vel­op­ment Cen­tre (DIEDC), we be­lieve that in­no­va­tion is a work in progress.

Dur­ing the Global Is­lamic Econ­omy Sum­mit 2015, we launched the ' In­no­va­tion 4 Im­pact' com­pe­ti­tion in col­lab­o­ra­tion with the Dubai Sil­i­con Oa­sis Au­thor­ity and Thom­son Reuters. The aim of this ini­tia­tive was to sup­port start-ups and busi­nesses in the Is­lamic dig­i­tal econ­omy space and serve as an in­cu­ba­tor for SMEs across the world. The Dubai Tech­nol­ogy En­tre­pre­neur Cen­tre is yet an­other en­abling ini­tia­tive launched by the Dubai Sil­i­con Oa­sis Au­thor­ity that al­lows young en­trepreneurs to in­no­vate and ad­vance their busi­nesses within a highly mo­ti­vat­ing and ef­fi­cient work en­vi­ron­ment.

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