Qatar partners Malaysia, Turkey to conquer Islamic finance market


Qatar is planning an bold new initiative with Malaysia and Turkey to serve the $2 trillion world Islamic finance market from hubs within the three international locations utilizing widespread platforms and know-how, as a part of efforts by the Gulf emirate to overcome a blockade imposed by its neighbors and diversify its economic system away from oil and gasoline.
“We have a vision to cover the entire globe’s Islamic financial transactions between three financial centers: Doha, Istanbul and Malaysia,” mentioned Yousef Mohamed Al Jaida, CEO of the Qatar Financial Centre in a gaggle interview on the sidelines of the annual Doha Forum. “This requires international platforms and technology which we believe Qatar Financial Centre has.”
Under the plan, Turkey would cowl Islamic finance wants in Europe, Qatar would serve the higher Middle East and Malaysia would promote to Asia, he added.
“That’s a big vision, we’re working on it and this is a new project,” Al Jaida mentioned within the interview with the Nikkei Asian Review and a small group of different publications. Relations between Qatar, Turkey and Malaysia had “intensified recently and become a lot closer,” he added. “We share similar visions, we share similar progressive outlooks… so there’s a lot to be achieved between these three countries.” He didn’t give time scales for the undertaking.
The London Stock Exchange is presently a worldwide venue for the issuance of sukuk, whereas Hong Kong and Luxembourg have additionally made inroads however Qatar believes the market needs to be led by Muslim international locations, Al Jaida mentioned.
Malaysia is already one of many world’s largest issuers of sukuk, or sharia-compliant bonds, with 34% of the worldwide market final 12 months. The Malaysian central financial institution signed a memorandum of understanding with the regulatory authorities of Qatar and Dubai in 2007 to promote mutual cooperation however efforts to consolidate the fragmented world Islamic finance business have foundered prior to now on regional rivalries and a scarcity of settlement on widespread requirements.
The new Islamic finance initiative types a part of plans by Qatar, a Gulf emirate which is the world’s largest exporter of liquefied pure gasoline, to diversify its economic system and develop away from its neighbors, 4 of which imposed a blockade on its borders and airspace final 12 months.
The United Arab Emirates, Saudi Arabia, Bahrain and Egypt accused Qatar of sponsoring terrorism and reduce off land, sea and air entry demanding that Doha change its insurance policies. Qatar rejects the accusations and says it’s the sufferer of a hostile act which is against the law underneath worldwide regulation.
Like different Qatari officers on the Doha Forum, Al Jaida described the blockade as a “blessing in disguise,” insisting that regardless of the appreciable additional prices imposed, it had compelled his nation to turn into extra self-ample in areas similar to meals manufacturing and to develop its port and air cargo infrastructure extra shortly.
Before the blockade, Qatar imported nearly all its meals through its neighbors however authorities-funded emergency schemes to develop native agriculture have helped to fill the hole and elevated commerce with Iran, Turkey and Oman did the remaining. State-owned Qatar Airways organized a large air cargo operation to fly in imported necessities through a disused airport and the nation quickly expanded its personal port services to exchange the misplaced services of Jebel Ali within the UAE.
Qatar, which enjoys the world’s highest per capita GDP at buying energy parity in accordance to the World Bank, misplaced some progress momentum throughout the blockade and had to redirect $50 billion from its sovereign wealth fund and reserves to prop up the banking system and defend the trade charge.
But now a extra assured Qatar is pushing its monetary middle aggressively in its place to the longer-established and bigger Dubai International Financial Centre, regardless of the irony of an remoted Gulf peninsula providing itself as a regional hub.
Al Jaida mentioned the UAE had undermined the enterprise mannequin of Dubai as a regional hub throughout the blockade by forcing worldwide corporations working within the area to arrange another base to serve Qatar. As a consequence, the variety of overseas corporations working within the Qatar Financial Centre had grown by 100% for the reason that blockade and Qatar now had the chance to problem Dubai as a hub within the Gulf area.
Qatar has attracted overseas companies by providing ensures that Doha will likely be a less expensive base to function from than Dubai, in return for a dedication to a minimal 10-year presence.
The Qatar Financial Centre gives 100% overseas possession, a authorized and judicial framework based mostly on English regulation, 100% repatriation of income and different regulatory benefits to entice companies. It compares itself to Hong Kong in providing corporations an entry level to a wider market underneath internationally pleasant phrases. —Nikkei Asian Review

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