Riyadh, Asharq Al-Awsat- Located in southeastern Asia at the southern tip of the Malay Peninsula, Singapore is the smallest nation in Southeast Asia with a population of 4.5 million, 15 percent of which are Muslims.

The country’s Gross Domestic Product is at US$240 billion with the annual per capita income at US$49,700. And as one of the Asian Tiger economies, Singapore is considered a significant financial center, with the world’s major financial corporations such as Barclays, HSBC keen on gaining a foothold there and turning it into a mammoth financial market.

Singapore has 114 commercial banks(only six of which are local, with the rest being either foreign or joint banks), in addition to hundreds of other financial institutions such as insurance companies, brokerage firms and banking and financial consultancies, making it one of the world’s top five markets in currency trading.

Singapore was introduced to Islamic finance with the Malaysian May Bank in 2001 via the Islamic-compliant Ethical Growth Fund. Hence, the bank managed in 2005 to offer online Islamic-compliant saving account services. In 2003, Singapore joined the Council of Islamic Financial Services based in Malaysia as an observer before it gained full membership in 2005. Mainly targeting the companies owned by Muslims, financial corporations and charities, the OCBC got the first license to offer Islamic-compliant deposit services in 2006. On 7th May 2007, the first license of full Islamic bank was issued in Singapore for the Asian Islamic Bank.

There is no doubt that the decision-makers in such an important global financial center will not miss out the growth of the Islamic finance industry and will look forward to its future, especially when it neighbor is the jewel of Islamic finance, Malaysia.

Therefore, Singapore is planning on becoming a major player in the Islamic finance market by making available the legal and legislative makeup needed for its work. In 2006, the Singaporean Monitory Fund allowed banks to enter into commercial activities such as commodities trading in order to ease financing by means of dividends. Moreover, observatory bodies noticed that many Islamic financial contracts were being subjected to more taxation than traditional financial ones due to the nature of Islamic-compliant structure i.e. sales tax and income tax. This caused the government to carry out some amendments and exceptions to customs law, in an effort to make Islamic financial dealings equal to that of traditional ones on the basis of assessment.

Apart from the legal and custom dimension, Singapore made available an Islamic indicator for the Singaporean Islamic financial market as a support service aimed at attracting Islamic finance, more specifically from the Gulf, and allowed incorporating Islamic funds into the stock exchange. Observatory bodies realized how significant the existence of qualified cadres are to put Singapore on the international map of the Islamic finance industry and acted to qualify personnel of the Islamic financial sector by cooperating with both the Muslim Scientists League in Singapore and the International Islamic Finance Institute in Malaysia.

There is no doubt that Singapore’s cumulative expertise-which it acquired through a continuous struggle and unabated efforts- helped guarantee its success making it in the process an international financial center, despite it lacking the potential at our disposal.

It makes me wonder why we are hesitant in taking the initiative to turn Riyadh into an Islamic finance hub, which it is qualified to be, particularly at a time when the world has acknowledged the success of Islamic finance and the solid grounds on which it stands.