Monday, May 13, 2013
Dubai
Labelling products and companies with a ‘Shariah-Compliant’ tag, as part of Dubai Government’s plan to promote Islamic economy in Dubai might take a long time as the Department of Economic Development is yet to prepare the industry-wide standards for Islamic economic products and services, an official said.
“We are looking at value-based Islamic standards that will make the economy more sustainable. We do not have any set time frame for the roll out of the Islamic standardization,” Harun Kapetanovic, Economic Advisor to the Department of Economic Development (DED) told delegates at the 3rd Annual World Islamic Finance Conference in Dubai. “We are currently working on these. These are new and we have to develop these standards.
“Once finalized, these will have to be tested and be accepted by the business community to adopt. Then we will implement them.”
Dubai Government unveiled its plan to develop Islamic Economy - a parallel to the conventional economy - based on accepted Islamic principles where each sector/industry will have set Islamic standards for companies and products that will help consumers to make a choice - between conventional and Islamic products and services.
Islamic economics in practice, or economic policies supported by self-identified Islamic groups, has varied throughout its long history, although these are prescribed to be sourced from the teachings of the holy Quran and the sermons issued by Prophet Mohammad (PBUH) about 1,400 years ago. Islamic economy is linked the lifestyle, governance prescribed by the Islamic theology.
The global Islamic economy has been growing fast worldwide and today accounts for $2.3 trillion in gross product activity, helped and supported by a growing community of 1.6 billion Muslims.
Islamic principles have so far made a difference in certain sectors of economy, especially the banking, finance, insurance, food processing and tourism industries where a consumer can now distinguish the difference between the two and make the call.
Halal food and ‘dry hotels’ are clearly a consumer choice that is visible in the market. However, there are certain sectors where this type of clear distinction between the two would be difficult, such as trade, retail, energy, power, construction sectors, etc. A ‘Shariah-Compliant’ tag would be difficult to attach to these sectors.
“There are two areas - companies and products, where we are working,” Kapetanovic said. “We want to set up guiding principles for companies to be managed as per the Islamic principles - that have emerged from the Arab World. The key would be to make them engage in responsible practice and remain transparent.”
He said, corporate governance and corporate social responsibility has been part of the Islamic business practices. The new guidelines will reflect these and companies will have to adopt those as part of their business practices - in order to be qualified as ‘Islamic’ or ‘Shariah-Compliant’ companies.
Although it’s a long journey, it has begun towards the right direction, they say. However, there are issues and complications as the industry moves forward.
“Capitalism has disappointed us,” Suhail Zubairi, Chief Executive of Dar Al Sharia, a Dubai Islamic Bank subsidiary, said. “Islamic economic principles, if developed properly, could stabilize things. However, Islamic financial and economic practices should be completely different from the conventional ones. We should not converge Islamic finance practices with conventional economy - this way we just confuse the consumers.”
By Saifur Rahman Associate Editor
Gulf News 2013. All rights reserved.
