Author: Rushdi Siddiqui
Co-founder and MD of Azka Capital, Private Equity Advisory & Advisor to Thomson Reuters on Islamic finance and Halal industry.
Muslim consumerism is linked to real economy sectors.
Dubai actually has most of the attributes of an Islamic economy. For example, an activity log for a person in Dubai may entail:
He lives in a residence that is Islamically mortgaged by, say, Tamweel, and it is ‘insured’ by Takaful Re Limited. The profit rate payment is off Thomson Reuter’s six-month Islamic Interbank Benchmark Rate (IIBR). He has peace of mind as his biggest asset is Shariah-compliant.
The white goods in his home, like washing machine, dryer, refrigerator, etc., were financed by Noor Islamic Bank and purchased at a major retail outlet near Burj Khalifa/Dubai Mall, built by a Shariah-compliant company, Emaar.
The food, from the fast moving consumer goods like meat/chicken, the cosmetics, like perfumes and make-up, and the pharmaceuticals, like cold medicine, in the house are halal, as certified by a recognised entity. As GCC is a net importer, the distributor is acutely diligent on halal supply chain integrity and cross contamination.
The family clothing is purchased on-line, www.shukronline.com, which sells ‘contemporary styled Islamic modest clothing’ ethically produced in sweat free shop premises, and retail stores for Abayas and suits from major designer catering to the Muslim market. The vehicle he gets into go to work is Islamically financed by Emirates Islamic Bank and insured by Abu Dhabi National Takaful company, and it also provides family coverage.
He drives on the highway that is project financed by Abu Dhabi Islamic Bank, and has Salik (tolls) where proceeds used for repayment, operating and maintenance. He drops his daughter at Dubai metro, project financed partially by Dubai Islamic Bank led consortium, as she is a senior executive at Al Islami Foods. He then drops off his visiting son at Terminal Three for Emirates Airlines flight on A380, financed Islamically by consortium of Islamic and conventional banks, where he is returning to New York University, as his college education is financed by Al Hilal Bank.
He then drives into a gas station, upstream operations were financed by the Islamic structure by NBAD, and pays by his Ajman Bank Islamic credit/charge card (accumulates points for Hajj/Umrah), and purchases snacks which have all certified halal ingredients. He also buys the Khaleej Times to read the fortnightly column on Islamic finance called Participation Finance (author of this article).
He eventually drives to his mix-use office tower, financed Islamically by First Gulf Bank. He then opens his computer to check on his current/checking account at Al Hilal Bank, and the secure IT provider is Path Solutions, a winner of numerous Islamic finance awards. He also examines his Shariah-compliant stocks, like Emaar, listed on the world’s only Islamic stock exchange, DFM, and compares returns to Dow Jones Islamic Market Index and SAMI Halal Food Index. Finally, he looks at his Shariah-compliant savings at National Bonds to see if he won the monthly millionaire prize.
He also is interested in deploying some of his savings to fund ideas for the youth locally, but Islamic microfinance is too small for him, and Islamic Venture capital and private equity is too big. He read about the world’s first Islamic crowd funding based in Egypt, www.shekra.com as a way to invest small amounts in pre-screened compliant companies.
He is a construction business owner and needs to import materials, hence, relies much on Shariah-compliant letters of credit/trade finance funds offered by institutions like Mashreq Al Islami. He must also make employee payroll, offer health benefits, etc., and financial institutions like Standard Chartered Saadiq.
It is the month of Ramadan and he has meetings with overseas vendors at an Islamic hotel, Al Jawhara Gardens Hotel, so they may understand the spirit of the month. He tells his guest that his Islamic bank understands additional financial commitments for Muslims during Ramadan, hence, deferred his monthly mortgage payment towards end. Finally, to better prepare himself for the meeting, he has done research on commodity prices and cross currency rates on Thomson Reuter’s Islamic Finance Gateway.
It is near Ifthar time, and he drives to Sharjah Islamic Bank’s Ramadan Tent to break fast with friends and family. Some of the food is provided by Al Islami foods, which is promoting its Al Farooj Fresh chain of restaurants.
The above examples show His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai’s vision for Dubai as an Islamic economy led by Muslim consumerism and supported by halal industry companies and Islamic and conventional banks.