Islamic banking, finance leaders share 2020 vision at industry's premier event

Addressing the most important networking event on the Islamic finance industry calendar, which is taking place at Dubai's JW Marriott hotel from 13th-15th March, Ziad Makkawi, CEO of Dubai Bank, said, "By 2020, Sharia'h compliant products will be part of what mainstream financial institutions offer. Islamic financial institutions today are trying to play catch up, but they will become part of the mainstream."

The International Islamic Finance Forum was inaugurated earlier in the day by HE Dr Mohamed Khalfan bin Khirbash, UAE Minister of State for Finance and Industry and Chairman of Dubai Islamic Bank.

"Islamic banks have proved a continuous success, able to consolidate their positions in financial and banking services in the region and worldwide," he told the 400 delegates from 50 countries. "We have witnessed a noticeable boost in the Islamic banking sector in the past year, and new terms have emerged as a result of the sector's progress, such as Sukuk, Ijara, musharaka and mudaraba.

"The success of Islamic financial institutions has prompted many major international banks to invest in this particular field," he added.

Makkawi's comments were made in a special 'Leaders Table' forum on the topic of 'Dubai Inc and the Role of Islamic Finance', which also included Tamweel CEO Adel Al Shirawi; Dr Habib Al Mulla, Chairman of Dubai Financial Services Authority; and Iqbal Khan, CEO of HSBC Amanah Finance, UAE.

Dr Al Mulla predicted that the Islamic banking and finance sector's 20 per cent per annum value increase will continue to 2020, but said he was "pessimistic" that the quality of services would also improve. "There's a lack of skills for a proper, serious Islamic financial market and I don't see that changing for 15 years," he warned.

Al Shirawi said he would like to see a significant increase in the number of Sharia'h scholars in the region. "We need institutional training for the next generation," he said.

On a more positive note, Khan, said he expected Saudi Arabia would become a 100 per cent Islamic market by 2020, and predicted that the reach of banks and financial institutions offering Islamic products would expand in European and Asian countries with large Muslim populations, particularly Germany, France and India.

Earlier, the high profile panel of business leaders discussed the impact of a possible Dubai Real Estate 'bubble' on the Islamic banking and financial services sector.

"We're not in a bubble situation yet, there's still today a balance between supply and demand," said Makkawi. "The big question is come 2007/2008 are we still going to be in that situation? The jury is still out on this one."

"Will market supply overcome market demand? Frankly, yes, and we should support it," said Al Shirawi. "The only way to stabilise inflation is to over supply. 20-25 per cent over supply is good for everybody."

Commenting on the opening day of the 2005 International Islamic Finance Forum, event director Chris Mullinger said, "Openness, inclusion and expansion have been the keywords of the day. The breadth of the debate, from issues specific to the Islamic banking and financial sector, to more broader related issues, such as the relationship between banks and the real estate industry and even the effect of traffic congestion on the economy of Dubai, have clearly defined the International Islamic Finance Forum as a key event on the financial calendar."

The 2005 International Islamic Finance Forum is organised by IIR Middle East, in association with DowJones Indexes and Saudi Economic & Development Company (SEDCO), Saudi Arabia.