The bid by Dubai to become a global centre for Islamic products and services has progressed steadily in recent years, with the newly established Dubai Islamic Economy Development Centre (DIEDC) now leading efforts to expand and diversify the emirate’s offerings. Ongoing development will be supported by a host of new initiatives unveiled in 2014 and 2015, with plans for support services, start-up incubators and halal clusters driving a positive mid-term growth forecast.
Islamic Economy
Islamic products and services offer considerable opportunities for businesses in Dubai. According the 2014/15 “State of the Global Islamic Economy” report published by Thomson Reuters and DinarStandard, spending on sharia-compliant consumer goods is set to reach $3.7trn by 2019, growing by 10.8% a year from $2trn in 2013. Islamic assets reached a value of $1.66trn in 2013, led by growth in sharia-compliant funds and issuance of sukuk (Islamic bonds), and are projected to have reached $4.2trn in 2014. The UAE has already risen to become a growth leader in several sharia-compliant sectors: according to the report, the nation’s Islamic economy is the world’s second-most developed after Malaysia, with the UAE leading Malaysia in halal cosmetics and fashion, but trailing in finance, food, pharmaceuticals and tourism.
Expanded Offerings
Dubai’s leadership has moved quickly to capitalise on new opportunities and diversify its Islamic offerings in recent years, following the launch of an ambitious expansion strategy spearheaded by Sheikh Mohammed bin Rashid Al Maktoum, vicepresident of the UAE and ruler of Dubai. In January 2013, Al Maktoum announced plans to develop the emirate into the global capital of the Islamic economy, after which authorities launched the Dubai Global Sukuk Centre in February and the Hamdan Bin Mohammed e-University Centre for Islamic Banking and Finance in July. In October 2013, officials announced that the emirate’s Islamic economic development plan would focus on financial services, food, education and tourism, and would be rolled out within three years.
Set up in December 2013, DIEDC was mandated to establish the framework and infrastructure needed to expand Dubai’s Islamic economy. Broadening the scope of the original plan, the centre’s strategy focuses on seven pillars: finance, halal food, tourism, digital infrastructure, art, knowledge and Islamic standards.
Halal Foods
Early 2015 saw steady progress towards adopting a series of programmes and initiatives. Production of halal foods, for example, is expected to expand in 2015, after state-owned TECOM moved to launch a new manufacturing cluster in February 2014. Halal development received another boost in June 2014, when the DIEDC’s board of directors met to plan expansion initiatives across a host of sectors, and approved a proposal by the Department of Economic Development (DED) to set up a global centre for Islamic governance. At the meeting, TECOM proposed a plan to develop clusters for specific halal industries in Dubai Industrial City. Economic Zones World has also signalled an intention to grow its tenant base of halal manufacturers, while the DED proposed partnering with unspecified global players to expand halal manufacturing and redistribution. DIEDC continues to research and review how best to establish accreditation agencies for slaughterhouses, research labs, and other halal institutions.
Digital Development
Dubai is also moving to expand Islamic activities in the digital domain, a relatively undeveloped segment offering considerable potential. At the June 2014 DIEDC meeting, the Dubai Silicon Oasis Authority (DSOA) and TECOM Business Parks proposed setting up new business incubators for entrepreneurs and small- and medium-sized enterprises working in the Islamic economy’s digital sector. These plans advanced in January 2015, when the DSOA announced a proposal to launch the Dubai Technology Entrepreneurship Centre, which will cater to startups in Arabic digital content. The DIEDC also moved in December 2014 to partner with Thomson Reuters to set up a Global Islamic Economy Portal, which will monitor growth across major sharia-compliant sectors.
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