Research and analysis

UAE: Islamic finance - visit by Economic Secretary to the Treasury

Published 14 November 2014

This research and analysis was withdrawn on 5 August 2016

This publication was archived on 5 August 2016. This article is no longer current. Please refer to Overseas Business Risk - United Arab Emirates.

0.1 This publication was archived on 5 August 2016.

This article is no longer current. Please refer to Overseas Business Risk - United Arab Emirates.

0.2 Summary

Andrea Leadsom visited Dubai for the 10th World Islamic Economic Forum (WIEF). Her presence and key note speech reinforced HMG’s commitment to Islamic Finance (IF). She made substantive announcements to support the UK’s aim to be the Western hub for IF, catching the eye at this high profile event.

0.3 Detail

Andrea Leadsom MP, Economic Secretary to the Treasury (EST), visited Dubai on 28 October to attend the World Islamic Economic Forum (WIEF). She spoke at the opening plenary session on the role of Sukuk in developing global trade. The programme also featured meetings with the Dr Zeti, Governor of the Malaysian Central Bank, Younis Haji Al Khoori, Undersecretary of the UAE Ministry of Finance (MoF), Mohammed Al Gergawi, UAE Minister for Cabinet Affairs (with the Islamic Economy portfolio) and Dr. Ahmad Mohamed Ali Al-Madani, President of the Islamic Development Bank (IDB). The Minister also held media interviews and attended a networking reception of UK Delegates.

Islamic Finance and Economy

At the opening session of WIEF, the Minister spoke about the popular inaugural UK Sovereign Sukuk issued earlier this year, the first by a western country. She highlighted a suite of developments announced since London hosted the 9th WIEF last year. These included the creation of an Islamic Index on the London Stock Exchange and the creation of the first Islamic Underwriting Agency. Looking to the future, the Economic Secretary announced the UK Export Finance (UKEF) ambition to enter the Sukuk Market, potentially with an Airbus customer in the next few months; and the commencement of feasibility work next year on a Shari’ah compliant deposit facility at the Bank of England (BoE), to improve the access to liquidity for Islamic banks.

The Minister made the case that the UK is open for both conventional and Shari’ah compliant investment, noting the Shard and Chelsea Barracks as recent projects funded by Islamic Financial products. EST spoke of the need for the UK to build thousands of new homes and that these projects could be suitable for Islamic funding.

The Economic Secretary’s speech was one of the few of contain new announcements and talking points. The Ruler of Dubai and Prime Minister of the UAE, Mohammed bin Rashid, attended for her session , which ensured good profile locally. Among the other key note speeches, Prime Minister Najib of Malaysia made the most impact with his focus on on education in the Islamic world, and the need to boost low literacy rates.

During the meeting with Governor Dr Zeti, the Minister reiterated her desire for continued development of Islamic Finance opportunities between Malaysia and the UK. Governor Dr Zeti raised the issue of liquidity for Islamic banks and the Minister confirmed the BoE were looking to develop a facility to help this.

UKTI hosted a side event at the WIEF the following day to highlight the attractive environment that the UK offers for Shari’ah compliant investment. The event was well attended and included speakers from Linklaters, the European Islamic Investment Bank and Ethical Asset Management.

Bilateral Issues

In her meeting with the Emirati Finance Ministry, Mrs Leadsom pursued a number of bilateral issues. Al Khoori agreed on the importance of resuming negotiations on a UK-UAE Double Taxation Agreement (DTA) and we suggested dates.

Media

EST conducted two interviews with Gulf News and Sky News Arabia, focusing on the key announcements made during the her earlier speech. There was good local pick up of her speech.

WIEF also saw the launch of UK based ‘Halal Gems,’ the first ever premium interactive digital magazine for halal-conscious foodies.

0.4 Comment

The Economic Secretary’s visit to Dubai ensured an appropriate UK presence following last year’s event in London and ensured that the 2800+ delegates will continue to regard the UK as the Islamic Finance hub outside the Islamic World.. The announcements during her speech were well received. The potential for UKEF to provide finance via a Sukuk in particular caught the eye, and the British Islamic banks welcomed the Bank of England looking to put them on a level playing field with conventional institutions.

0.5 Disclaimer

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