We are pleased to reshare a piece written by Afshin Molavi, Director at Oxford Analytica on the Islamic Banking, a continuously growing sector in the Gulf countries and beyond. His piece for The Majalla also cites one of PITAPOLICY’s articles on Islamic Finance co-written by Afaf Qayyum–we are very excited!
Also, we are excited to reshare a piece by our Founder, Mehrunisa Qayyum, contributed a piece on MENA enterprises to The Majalla, which is based in the United Kingdom. MENA enterprises follows Molavi’s piece.
From Humble Beginnings: Dubai positions itself to become a key player in Muslim markets
By: Afshin Molavi Originally published by The Majalla (Follow them @The_majalla)
In the year 1963, Egyptian economist Ahmed El-Najjar started a quiet revolution in a small, unknown city about 75 kilometers outside of Cairo. In the city of Mit Ghamr, home to pious villagers and traditional Egyptians, El-Najjar set up the first Islamic bank. His bank prohibited interest (riba), granted loans very cautiously, and adhered to the key Islamic economic principle of profit-and loss-sharing. It was an undisputed success. Still, the bank closed its doors in 1967 due to pressure from the government, which associated Islamic banking with the Muslim Brotherhood.
A precedent had been set in spite of the Egyptian government’s opposition. Dubai’s turn was next: in 1975, the Dubai Islamic Bank opened its doors. It was the first modern Islamic bank, far more sophisticated than the Egyptian experiment, and one that was in a position to compete with Western banks. Today, Dubai Islamic Bank has branches all across the UAE, makes global investments, and is widely considered to be one of the top Islamic banks in the world. [Click here to continue.]
MENA Enterprise: Strategies & Challenges for Next Generation Investors
Originally published by The Majalla (Follow them @The_majalla)
“Invest in whichever sector that could serve the young generation … in the service sectors, like education, healthcare and coffee. We’re talking about frontier markets … Iraq, Lebanon and Tunisia,” advises Shwan Taha, founder of Rabee Securities, the first international Iraq-based brokerage firm. On February 2, Taha’s firm brokered the largest initial public offering in the Arab world since 2008, when the Saudi Arabian Mining Company began trading publically.
At the second annual Wharton MENA Business Conference on February 16, Taha joined other high-profile Middle Eastern business leaders, including Global Chairman of Booz & Company Joe Saddi and Chairperson of Global Investment House Maha Al-Ghunaim, at a conference entitled “Economies of Freedom: Reshaping the Future of the MENA Region.” Held at the Wharton Business School in Philadelphia, the day was dedicated to five panels on entrepreneurship, energy, investing, women in business, and assessing the ‘new normal’ in the economies of Egypt and Tunisia.
A potential entrepreneur or investor sitting in the audience of the Wharton Business School panel would find it difficult to segment the right frontier market from the emerging markets within the Arab world—never mind the difficulty of calculating the political risk that varies across countries in the MENA region. Investing in any sector involves challenges like accessing financial capital, but business people in the region would do well to take into account the unique additional challenges facing their business.
Identifying the niche
When discussing growth markets in the region, Taha left out the technology sector, which has burgeoned in countries like, Egypt, Jordan, Lebanon and Saudi Arabia. While Saudi Arabia is the only Gulf country on this list, the absence of other Gulf countries is not surprising for two reasons. First, the Saudi government has made huge investments in technology partnerships with universities. Second, market research and the Arab Social Media report indicate that Saudi residents are increasingly representing a huge share of Arab social media users: Arabic is the fastest-growing language on Twitter, and Saudi Arabian users represent about thirty percent of those communicating over Twitter in Arabic. [Click here to continue]