Dubai tops in Shariah-compliant free zones

Abdullah Mohammed Al Awar, CEO of the Dubai Islamic Economy Development Centre; Badr Buhannad, executive vice-president for corporate strategy, ICT and risk management at the Dubai Silicon Oasis Authority; and other officials during the Press conference on Wednesday.

Dubai ranks first among the world's leading Islamic economy-enabling free zone cities that collectively contribute $55 billion to the global Shariah economy, findings of a new study revealed.
Other cities ranked after Dubai include Kuala Lumpur and Johor Bahru in Malaysia, and Manama in Bahrain, according to the Free Zones Outlook Report released on Wednesday by the Dubai Silicon Oasis Authority (DSOA), the regulatory body for Dubai Silicon Oasis.
The report, developed in collaboration with Thomson Reuters, estimates that in 2015 free zones contributed $55 billion (Dh202 billion) to the Islamic economy, valued at $1.9 trillion, and projections suggest this number will increase to $117 billion by 2021.
Free zone contribution to the halal food sector amounted to $34 billion and is expected to hit $74 billion by 2021, while the $7 billion contribution to the modest fashion sector is projected to double by the same period.
According to the report, Malaysia was one of the first nations to develop the concept, creating dedicated free zone "hubs" across the country. At present, 30 free zones across 18 cities worldwide support Islamic economy activities.
Dr Mohammed Alzarooni, vice-chairman and CEO of the DSOA, said the authority actively participates in boosting the growth of the emirate's Islamic economy sector.
"Through the DTEC [Dubai Technology Entrepreneur Centre], we support start-ups in the fields of technology, digital Islamic economy, online Arabic content and smart city initiatives. Our ultimate aim is to contribute to shaping the UAE's post-oil economy."
Abdullah Mohammed Al Awar, CEO of the Dubai Islamic Economy Development Centre (DIEDC), said free zones represent ideal platforms to grow the key sectors of Islamic economy.
"Even though the facilities free zones provide may differ around the globe, their value proposition is essentially the same - they enable local and foreign investors alike to operate, network and expand. However, the benefits are mutual; today and in the near future, Islamic economy can offer real added value to free zones," said Al Awar. In January, the DIEDC launched of a new strategy for 2017-21 for the development of the Islamic economy system.
The strategy includes identifying new performance indicators for monitoring growth of key sectors and measuring their contribution to the UAE's economy. It also focuses on ensuring long-term impact, and its main objective is to lead the growth of the Islamic economy sectors on a local, regional, and international scale, and to set a benchmark for the Islamic ecosystem worldwide.
Nadim Najjar, managing director of Thomson Reuters in the Middle East and North Africa, said free zones allow constituents to maintain superior quality of products and services and adhere to best practices. "There are ample opportunities for free zones to create significant economic value across all pillars of the Islamic economy. Our report projects that the value of Islamic free zone exports will more than double over the next five years."
Maximising free zone use across all sectors of the Islamic economy has the potential to spearhead significant growth of the SME segment in the UAE, said Najjar.
"These sectors can go a long way towards achieving the goals of the UAE Vision 2021, including raising SME contribution to non-oil GDP to 70 per cent and increasing non-oil sector contribution to the total GDP to 80 per cent," he said.
- issacjohn@khaleejtimes.com

Issac John

issacjohn@khaleejtimes.com