With a freewheeling commercial culture and a diverse population with cosmopolitan lifestyles, the booming emirate of 2.1 million people is not known for its Islamic scholarship.
But in the past few decades, Dubai has used its international ties to become the Gulf’s main center for finance, trade and travel. Officials said they would now focus on business related to the religious beliefs of the world’s 1.6 billion Muslims.
“The total foreign trade of the Muslim world is USD 4 trillion. This shows the potential that is available for Dubai,” Mohammed Al-Gergawi, chairman of Dubai Holding, a conglomerate owned by the emirate’s ruler, told a conference.
In finance, Dubai wants to become a top center for the issuance and trading of Islamic bonds, which are structured to avoid the payment of interest. It aims to rival the main hubs for Islamic bonds, Kuala Lumpur and London, by creating a set of clear, commonly accepted standards.
Abdulaziz Al-Ghurair, chairman of the authority overseeing Dubai’s financial center, said the emirate would also focus on Islamic re-insurance. In conventional insurance, risk is transferred from one party to another; under Islamic rules, risk is shared among members of an insurance fund.
Because there are only 19 Islamic re-insurance firms globally, Islamic insurers are forced to transfer some of their risk to conventional re-insurers, creating a business opportunity for Dubai in establishing more firms, Ghurair said.
He predicted the global Islamic re-insurance market would grow to USD 20 billion by 2020, from USD 11 billion at present.
Islamic endowments, estimated to be worth hundreds of billions of dollars globally, are another area which Dubai is targeting. Analysts say many of them invest their money passively and inefficiently, creating potential for economic gains if they are reformed.
Dubai intends to establish by the first quarter of next year an International Endowment Authority, headquartered in the emirate, which will promote best practices in the global industry, officials said.
The emirate will get involved in the business of certifying halal food and other products that are prepared under Islamic principles. It plans to set up an international laboratory and accreditation center by the first quarter of 2014, aiming to gain 10 percent of the global market in the next three years.
Officials said they would also promote Dubai as a center for Islamic tourism, education and fashion, though they did not give details of those initiatives.