London, Asharq Al-Awsat—The ninth World Islamic Economic Forum (WIEF) launched on Tuesday at London’s ExCel Centre, for the first time ever in a non-Muslim country. Entitled ‘Changing Worlds, New Relationships,’ the forum’s main focus is to enhance relations between Islamic countries and the Western world.
Malaysian Prime Minister Najib Abdul-Razak initiated proceedings to an audience which included 18 global leaders, among whom were Sheikh Salem Abdul Aziz Al-Saud Al Sabah, the Deputy Prime Minister of Kuwait, and King Abdullah II of the Hashemite Kingdom of Jordan.
British Prime Minister David Cameron rounded off the first day’s proceedings by outlining Britain’s plans to boost its role in accommodating Islamic finance. Cameron was clear that Britain recognizes the importance of Islamic finance and incorporating it within Western markets.
“Already London is the biggest centre for Islamic finance outside the Islamic world. But today, our ambition is to go further still,” said Cameron.
“I don’t just want London to be a great capital of Islamic finance in the western world, I want London to stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world,” outlined Cameron.
He announced that London will be launching a new Islamic Market Index on the London Stock Exchange (LSE) “to be launched as early as next year.” This measure will propel the UK as the first non-Islamic country to issue an Islamic bond—known as sukuk. An Islamic bond is issued in recognition of ownership of an underlining asset, by the bond holder, and structures returns, with no charges, in accordance with Islamic finance.
Islamic finance is based on principles of Shari’a law, which is largely guided by the principle of risk-sharing. Trade is the emphasis in Islamic finance and money bears no value itself, it is only a measure of value for an underlying asset—including both goods and services. Consequently, interest is forbidden as no charges should be imposed on the use of money.
Towards the end of his address, Cameron emphasized: “Investing in London is good for you and opening London up to your investment is good for us.” He also highlighted how Islamic investment has contributed to London’s infrastructure and businesses—acknowledging that Thames Water, Barclays, Sainsburys, Harrods and the Olympic Village were all partially financed by Islamic investors, among other projects and businesses.
Approximately 40 percent of the world’s 25 fastest growing markets are within Muslim-majority countries. Additionally, global Islamic investments have grown dramatically over the years, expected to hit USD 2 trillion by 2014.
Other speakers focused on the theme of developing Islamic economies and the promotion of economic equality in Islamic states.
Prince Salman Bin Hamad Bin Isa Al Khalifa, Crown Prince of the Kingdom of Bahrain, pointed out that, with regards to the Middle East, “undoubtedly the world’s focus has been on our political development. But the catalyst, the driver and ultimately the solution to our region’s issues lie as much in economic development, in enhanced opportunity and in education.”
The ninth WIEF continues until Thursday, hosting a variety of events tackling investment, development and strategies for greater economic linkages between the Muslim and non-Muslim world.