As has been noted many times by NACM and FCIB, commerce in the Middle East is a very intriguing and potentially lucrative pursuit for companies. However, cultural and banking differences, not to mention general unfamiliarity, has rendered some credit department afraid to extend terms to businesses there in part because they don’t have feet on the ground, so to speak. The Dubai Chamber of Commerce and Industry believes businesses in the UAE should capitalize on that and market such expertise, even if the rollout of any widespread effort may be limited…for now. It's a development Western-based businesses should potentially monitor.
A new report from the Dubai Chamber, noting that Islamic Finance is expected to expand globally to about $2 trillion (USD) by 2015, urges business there to export their expertise in things like Middle Eastern business practices and, specifically, how Sharia Law can affect business dealings with those who are complaint. The first wave of a potentially widespread effort of focus would be on companies in regions where significant Muslim population already (Turkey, parts of Southeast Asia, etc.). Still, it would almost surely set the stage for more services to emanate from the Middle East designed for businesses in traditional, Western economic powers as well.
“Dubai banks are potentially well positioned to harness organic growth in these markets where Islamic products can appeal to the predominantly Muslim indigenous population,” the Chamber noted in its release about the study. “However, to compete with conventional international institutions, Dubai’s Islamic finance sector must scale and breach the critical mass required to make products feasible.”
The study also, importantly, noted that the there is a growing young population that still abides by Sharia law that has garnered significant increases in income in recent years.
-Brian Shappell, CBA, NACM staff writer