The UAE, and in particular Dubai, is already an Islamic finance hub. Dubai Islamic Bank was the world’s first Islamic commercial institution, dating from 1975. Now Dubai has re-emerged as the major hub in the GCC and the wider Middle East region. The political unrest in Bahrain has resulted in business being diverted to Dubai, and although Bahrain remains the base for institutions such as the AAOIFI, Dubai is attracting more commercial business. Its economy is booming once again with record amounts of spending by visitors from Saudi Arabia, including government employees who have recently benefited from substantial pay rises, but are fearful of visiting countries such as Syria or Egypt. All Dubai hotels are currently fully booked and the annual shopping festival has been the most successful ever.
Dubai Islamic Bank has an extensive branch network in Pakistan, and there are substantial movements of Shariah compliant funds to and from South Asia. Dubai is also the gateway to Iran, with all its major Islamic banks having branches in the emirate, which continue to thrive despite the US sanctions. Bahrain has no access to the Iranian market. Dubai also has an excellent financial infrastructure, especially with the Dubai International Financial Center, an English common law jurisdiction. Certainly the outlook for 2012 looks very promising when viewed from Dubai.
RODNEY WILSON
Emeritus Professor at Durham University and Visiting Professor, Qatar Faculty of Islamic Studies.