Head of Islamic Development Bank says Dubai will be used by countries in central Asia, Africa
Countries as distant as central Asia and Africa are expected to use Dubai to obtain expertise and financing channels as they develop their Islamic banking industries, the head of the Jeddah-based Islamic Development Bank said.
Over the last few years, the use of Islamic finance has been spreading beyond its traditional bases in the Gulf and southeast Asia to other countries with sizeable Muslim populations, such as Nigeria andKazakhstan.
IDB president Ahmad Mohamed Ali, whose multilateral lending institution has 56 member countries, said Dubai could play a key role in this process.
"We want authorities here to give channels to these countries who are less developed, to benefit from the special position of Dubai as a hub," he said in an interview late on Sunday.
In January, Dubai's government announced plans to become a global centre for Islamic business. "As the IDB we welcome such an initative - it is not just in the interest of Dubai but in the interest of the industry as a whole," Ali said.
The AAA-rated IDB said earlier this month that it would launch a $10 billion Islamic bond issuance programme in Dubai, a major boost to the emirate's ambitions.
Ali said on Sunday that the listing of the sukuk programme in Dubai was in the "finishing stages". He added that the IDB, which also has issuance programmes in London and Malaysia, planned to make public issues every year and also cater to a growing number of requests for private placements, most of them from central banks.
"Last year we were in June, next year we try probably a little bit earlier...around the middle of the year roughly."
This year, the IDB issued a $1 billion, five-year sukuk in June and a five-year, $700 million private placement in March.
The IDB is a backer of the Malaysia-based International Islamic Liquidity Management Corp, formed to help Islamic banks manage their short-term liquidity needs, and is working with public and private institutions to develop more tools which can be used for this purpose, Ali said without elaborating.
"I think the biggest challenge and the most pressing one is the management of liquidity...We are looking for other ways."
The board of the IDB's insurance unit has given in-principle approval to an insurance product designed to boost the credit ratings of sovereign issuers, although final details are still under consideration, Ali added.