Hussain Al-Shahristani, Iraqi deputy prime minister for Energy Affairs’ recent comments on collaboration with Iran has stirred the hornet’s nest and may have made Saudi Arabia a bit uneasy. CONTINUE READING

Foter / Public domain

The UAE and Saudi Arabia are set to join their Gulf peer Qatar in participating in the shale oil and gas revolution unfolding in North America. CONTINUE READING

Saudi Arabia, Egypt and Iraq will be among the world’s 30 largest economies by 2028, according to forecasts by a London-based economic consultancy. CONTINUE READING

druidabruxux / Foter.com / CC BY-NC-SA

Oil and gas exporters such as the UAE, Saudi Arabia, Qatar and Oman are succeeding in reversing the so-called “resource curse”, but they still have a long way to go before realizing their full potential. CONTINUE READING

Foter.com / CC BY-SA

Saudi Arabia may rein in massive public sector spending slightly in 2014, but it will still be enough to keep the non-oil sector humming along and ensure domestic demand continues to remain robust. CONTINUE READING

Juber Al-haddad ™ / Foter.com / CC BY-NC-SA

Saudi Arabia’s labor problems will “cloud” the country’s short-term outlook, according to analysts. CONTINUE READING

Faisal AlKhudairy \  فيصل الخضيري / Foter.com / CC BY-NC-SA

Saudi Arabia lags behind regional and global counterparts in healthcare infrastructure, which presents growth opportunities for the private sector, according to a new report. CONTINUE READING

Faisal AlKhudairy \  فيصل الخضيري / Foter.com / CC BY-NC-SA

United Arab Emirates and Saudi Arabia emerged as the best countries in the Middle East and North Africa region to do business in. CONTINUE READING

Asia Pacific’s net oil imports by 2035 are equivalent to the combined production of major OPEC producers such as Saudi Arabia, Iran, Iraq, Kuwait and the UAE, according to the Asian Development Bank. CONTINUE READING

tj.blackwell / Foter / CC BY-NC

Regional investors looking for a safe haven as the US Federal Reserve begins tapering, should look no further than Saudi Arabia. CONTINUE READING

Omar A. / Foter / CC BY-NC-SA

Saudi Arabia has one of the world’s highest concentrations of large companies, according to. CONTINUE READING

Saudi Arabia’s petrochemicals companies saw their half-yearly earnings collectively decline 3.5% this year, but analysts are expecting an improvement in profits in the second half. CONTINUE READING

isado / Foter / CC BY-ND

As the global oil and gas industry turns on its head, Saudi Aramco - the world’s largest oil-producing company — is not sitting still, but tapping into its formidable unconventional natural gas reserves. CONTINUE READING

Thomas Hawk / Foter / CC BY-NC

Saudi Arabia’s power needs have taken centre stage in recent years as the kingdom’s economy expands and the population rises at a fast clip. CONTINUE READING

Suncor Energy / Foter / CC BY-NC-ND

China’s economy is cooling off and that’s bad news for Saudi Arabia. CONTINUE READING

StuffEyeSee / Foter / CC BY-NC-ND

By Rushdi Siddiqui,

The Islamic Development Bank, held their 24th Annual Symposium in beautiful Dushanbe, Tajikistan, invited me to chair a session on ‘Innovating for Economic Development in IDB Member Countries’.

At first glance, the words ‘invention’ and ‘innovation’ are not typically associated with the Muslim world.

The word ‘imitation’ (or reverse engineering) often is linked to the third world, Muslim majority countries. Yes, there is some element of innovation involved in reverse engineering, from pharmaceuticals to electronics, but it’s not something to be proud about to entice, say, foreign direct investment. The bigger question is, how much longer should the Muslim world continue to flatter via imitation, i.e., a ‘Xerox’ society.

Innovation and invention have been traditionally linked to Islam/Arab/Muslims since the birth of the religion, but something happened along the way. We have become a society of buyers over builders, consumers over savers, exporters of capital and importers returns, hence, an unsustainable situation.

The first revelation to the Prophet Muhammad (peace be upon him) was about reading:

Translation: In the name of Allah, the Most Beneficent, the Most Merciful.

Read: In the name of your Lord Who created.

Quran: 96:1

Created man from a clot of blood

Quran: 96:2

Read: And your Lord is the Most generous

Quran: 96:3

Who taught [man the use of] the pen

Quran: 96:4

and taught man that which he did not know

Quran: 96:5

Reading implies searching and seeking information to the far corners of the world, from Arabia to China and beyond, that yields knowledge, which eventually becomes wisdom. A wisdom that gets applied for betterment of man (individually), society (collectively) and the stewardship for future generations.

Thus, our predecessors have contributed to sciences, humanities, culture, arts, mathematics (algebra, logarithm, system of numbers), etc., and acknowledged by the likes of Prof Carole Hillenbrand’s book, ‘What the East taught the West.’

Furthermore, there is a ‘mobile’ museum, 1001 Inventions: The Enduring Legacy of Muslim Civilisation, .. ‘…1001 Inventions uncovers a thousand years of scientific and cultural achievements from Muslim Civilisation from the 7th century onwards, and how those contributions helped create the foundations of our modern world.’ It has been showcased in the GCC: Abu Dhabi, Doha, and Dhahran.

There are number of theories, from conspiracy to self destruction, on what happened along the way for the Muslim world, as a whole, to become a ‘knowledge deficient society.’ We only have to look at the small number of patents filed form the Muslim world to the US Patent/Trademark Office, countries aspiring to become knowledge based economies in their 2020/2030 vision planning, countries establishing entities, like Malaysia’s Talent Corporation, to bring back the emigrated human capital, and so on.

Innovation formula?

There is neither an exact formula for innovation nor a firm timetable with milestones. Instead, innovation is about establishing a fluid enabling infrastructure, with accountable benchmarks, customised to the local situation. Some of the elements of enabling include:

Initially government leads but removes itself from being a market participant to avoid crowding out affect, hence, a sunset privatisation of innovation

Availability and accessibility of risk capital PLUS mentoring, Muslim majority countries are about collateral based finance, including Islamic banking. Therefore, funds alone will not result in success, but MUST include mentoring to include, say, opening doors to suppliers/customers, legal documentation, etc.

Culture and cluster that is focused addressing national/regional needs, hence, one size fits all becomes a ‘white elephant’ project.

Education both university oriented (reverse linkage) and harnesses power of street smarts via inclusion to offer market demand, not just based, solutions.

First step

The IDB has the credibility and financial muscle to possibly fast track innovation in selected Muslim countries like the UAE, Malaysia, Turkey, Saudi Arabia, etc., however, it must take a stakeholder approach.

It must understand that the constraints of a country and work within those challenges to offer a market based solution as innovation is not only about economic development, but, as important, economic diversification.

The benchmarks must be reasonable and measurable with two important milestones: employment generation and raising the gross national income (GNI).

Thus, as a first step, IDB should create an Innovation Council (IC) for several selected member country as pilot programmes. The members of the IC may include financiers, regulators, businessmen, academics, etc., to give 360 degree review of the landscape and a pathway forward towards leading instead of following.

The writer is co-founder and MD of Azka Capital, private equity advisory firm focused on halal industry initiatives, and he is an advisor to Thomson Reuters on Islamic finance and Halal industry. Views expressed by the author are his own

News that Saudi Arabia would allow foreign investors to participate in the Tadawul market would give fresh impetus to the market and bring a number ofinternational money managers to the bourse. CONTINUE READING

KhanSaqib / Foter / CC BY-NC-SA

By Elza S. Maalouf, Founder & President Integral Insights Consulting, Member of the Evolutionary Leaders Organization

Corporations, like cultures, cannot skip a development stage. Life conditions in the Middle East have remained at tribal levels with egocentric overtones, which have resulted today in the sweeping revolutions of the Arab Spring. Corporate cultures in the Arab world were no exception to these values. Today visionary leaders, men and women, are changing these patterns and investing in human capacities that will outlast the Age of Oil.I have been working with Middle Eastern corporations for over a decade as a consultant and advisor to business founders and CEOs. Over the years, I have seen corporate training seminars delivered by Western consultants and trainers with the same exact content as it was delivered in the West as if the region were an extension of Anglo-Saxon values that just needed to catch up.

Even the best theories from management science fall short on achieving the intended results if they are not tailored to the memetic contours of each culture. In contrast to this one-model-fits-all approach, our consultancy honors all cultures, value systems and levels of development in society, and takes into consideration the environment and habitat in which they operate.

Specifically, the framework I use originated from the emerging science of memetics based on the seminal work of Professor Clare Graves and his successor and colleague Dr. Don Beck. A meme is like a gene that contains units of cultural information. Memes form into general groupings such as politics, language, economics, religion, education, health care, architecture, etc .The natural organizing principle that brings these groupings together is called a value-system or vMEME.
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By Rushdi Siddiqu, Global Head of Islamic Finance at Thomson Reuters

APRIL 1 — “I never considered a difference of opinion in politics, in religion, in philosophy, as cause for withdrawing from a friend.” — Thomas Jefferson

“Life is not a spectator sport. If you’re going to spend your whole life in the grandstand just watching what goes on, in my opinion you’re wasting your life.” — Jackie Robinson

Everyone has an opinion; however, some people are shy to share. An interactive article, much like a survey, requiring readers’ opinions may actually encourage wider audience participation. For many of us, constructive comments about an online article actually provide more insights than the article itself.

Politics

Why is that when China, North Korea, Russia, Venezuela (under the late Hugo Chavez) made/make provocative comments about the US, the reaction from the Tea Party loyalists and Fox talk show hosts are not immediate and proportional, if at all, when compared to comments from stateless extremists like Al Qaeda?

Is it because, in the mind of the loyalists, these sovereignties are not trying to expand religion, and they can actually do economic and/or military harm to the US? What about election year politics?

Many of the Muslim countries are trying to diversify their economies from natural resources, commodities, conventional banking, basic manufacturing, typically 4-5 economic sector bias, to a knowledge based economy as part of 2020 and 2030 vision plans.

The knowledge pursuit implies linkage of educational budgets for clusters, technology parks, equity financing (venture capital and crowd funding), legal protections, mentoring, etc. One way of looking at the output would be the number of patents registered with the US Trade & Patent Office. Does Malaysia have the most patents from the OIC?

Why do selected Muslim countries with excessive surplus continue to purchase trophy assets in the US and western Europe, at times at top of the market, and not invest more of the money in the “national mission” of establishing and enabling an educational infrastructure for future generations?

I recently had an eye-opening conversation with the former Prime Minister Tun Abdullah Ahmad Badawi, where he articulated that education starts in the mother’s womb with appropriate nutrition, food and spiritual guidance! The Muslim world needs this type of thinking to close the “knowledge” approach gap with the developed world.

Why has the OIC, as a whole, not captured the imagination of emerging market investors like BRICS? Is it because, out of the 57 OIC states, 22 are least developed but only three are G-20, there is corruption, capital flight, brain drain, and a host of most of the world’s intra-country conflicts, etc? Thus, requiring a sub-OIC, like SAMI +3, Saudi Arabia, Ankara, Malaysia, Indonesia, Pakistan, Nigeria, and Egypt? Who will promote such a clustering?

Inferiority complex

Why is it when celebrities like Mike Tyson or the late Michael Jackson allegedly “revert” to Islam, it spreads like wildfire on Muslim websites (with excitement)? Why is it when the UK wanted to issue a sovereign Sukuk (roughly and badly translated as an Islamic bond), the Islamic finance world spoke of it as a “badge of arrival” for the niche market? Do Muslims have an identity crisis and still mentally and/or are psychologically colonised by Western/conventional offerings?

Faith, finance, food and fashion

Islamic finance isn’t just about finance, but linked to faith, food, fashion, etc., hence, when will it or, rather, how will it step up and be the financial “lubricant” to these satellite-linked activities? Islamic finance needs to serve the economy, and not be positioned as the economy!

Should Ogilvy Noor, an Islamic branding consultancy, examine the merits of rebranding Islamic finance to Participation Finance, especially if the cross-sell to non-Islamic customers and countries is one of the KPI growth stories? Furthermore, how best to “educate” the anti-syariah movement, which attempts to link, without evidence, Islamic finance to terrorism financing?

Why Islamic finance, biased towards real estate financing, does not finance a real economy-linked movement like the halal food industry, as they are both mentioned in the same chapter of the Quran? The irony of the situation is a Muslim can consume the end product of certified halal food companies, like Malaysia-based Prima, but may not be able invest in the stock as it violates one of the financial ratios (too much conventional debt)!

Is the blame game spread to both halal (need to tell a better story of halal as an asset class) and Islamic finance (halal, asset backed, is ripe for Sukuk offering)?

Is food manufacturing considered a “sexy” or exciting industry compared to mega developments and information super corridors, etc.? Do people get excited about a food park or cows or chickens? Yet, everyone knows how important food security is to a country; hence, the disconnect.

Why is ethnic cuisine a great ambassador for a country? For example, in US, we have Italian, Chinese, Lebanese and Mexican food, Turkish delights, Pakistani biryani, Indian curry, Polish sausages, etc.

What Malaysian food/meal would be a good ambassador to the US? Would satay be a perfect food ambassador as the signature dish of Malaysia Airlines? How many Malaysian fast-food franchises exist in the US/UK?

Why is healthy food, vitamins, etc, expensive in Malaysia? This is one area, along with health club membership, the government should sunset subsidise until people feel the difference and understand the implications of health.

Human element

Why do Muslim countries not encourage local sport development by way of budgets, facilities and international coaches? Some of the countries offer “citizenship” for non-nationals to represent the country, and, even then a victory appears to be hollow.

For example, assume 25 per cent of the 1.8 billion Muslims are under 15 years old, there are Michael Jordans, Lebron Jameses, Tiger Woodses, David Beckhams, etc, in the Muslim world, and they would be wonderful ambassadors and role models for the country and its youth.

Who has a greater contribution to society, one who does not wear the “veil” and provides much charitable contributions, including the kindness of a smile, or the taker of charity, who passes judgment?

The highlight of the Proud to Be Human moment for 2012 had to be the recovery of Malala Yousufzai, the brave young Pakistani girl shot by the Taliban for promoting girls’ education. Her actions should earn a Nobel Peace Prize for the courage of a “special ops soldier”.

The Nobel committee needs to send a strong signal about girls’ education by awarding her the 2013 Nobel Peace Prize for Courage and Contribution to Girls’ Education in Emerging Markets.

“Too often we… enjoy the comfort of opinion without the discomfort of thought.” — John F. Kennedy

So, what is your thoughtful opinion?

* This is the personal opinion of the columnist.

Faisal AlKhudairy \  فيصل الخضيري / Foter.com / CC BY-NC-SA

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

Halal needs to move from certification and ingredients to an asset class

It is one of the legs of an Islamic economy for Dubai, as recently mentioned by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. It is a $640-billion (Dh2.35 trillion) niche market with greater reach and traction than Islamic finance for Muslims. It is also a consumer non-cyclical, linked to the real economy and asset-backed. Furthermore, companies such as Nestlé, Unilever, Cargill, Kraft and other Fortune 500 companies produce goods for this niche market.

We’re talking about the halal industry: from food and pharmaceuticals to cosmetics, logistics and more — $2.1 trillion in total, with the food sector comprising about a third.

According to a consultant study, “Consumer spending on food in the GCC is expected to reach $106 billion in the next five years … [and] Saudi Arabia and the UAE together account for around 75 per cent of the region’s total food retail market”.

Halal was in the Arab Spring countries long before Islamic finance, and they are now just talking about building enabling environment for sukuk. Here, an agriculture sukuk would have a more direct impact than general purpose sukuk.

Halal presence is a better indicator of Muslim purchasing power than the traction of Islamic finance in Western countries. “Halal has gone mainstream,” says Darhim Hashim, CEO of the International Halal Integrity Alliance. “There are now aisles — no longer shelves — in supermarkets such as Asda and Tesco, dedicated to halal products.”

Halal needs to move from the present conversation of certification and ingredients to an asset class. Thomson Reuters and Idealratings launched the world’s first halal food index, the Socially Acceptable Market Investments Halal Food Index, at the World Halal Forum in 2011. At the launch, there were 240 companies from 15 Muslim countries, including seven from the UAE, thus facilitating inward investing and intra-Organisation of Islamic Cooperation (OIC) investing.

Two points need to be addressed. Firstly, Muslims do not control the halal food supply chain (the OIC, overall, are net importers), especially at the important midstream, manufacturing and processing stages. Secondly, the present approach to food security by way of agriculture, food and land bank funds has yet to meet expectations.

There is a third way, beyond domestic growth and importing, that is less about securing food supply and more about controlling it. However, to control it, one has to know the farm to fork to finance supply chain, as well as traceability, leakages and the like.

Shaikh Mohammad’s announcement has reached the far corners of the food and finance world, and Dubai has the vision, will and means to address food security and build a global brand in the food industry, much like Emirates is for air transportation.

— The writer is Global Head, Islamic Finance & OIC Countries, Thomson Reuters

By Rushdi Siddiqui, Global Head Of Islamic Finance at Thomson Reuters

The “Muslim travellers” is an important segment in the travel industry, however, not many hotel chains or destinations haven taken a serious look at their needs. So, many travellers have to manage their requirements while travelling or stick to familiar holiday destinations.

Now the media is full of reports on Muslim Travel market, as there are a host of destinations, hotel chains, tour operators etc., all targeting the billions of dollars of these travellers.
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Padraic Ryan / Foter.com / CC BY-SA

By Rushdi Siddiqui, Global Head of Islamic Finance at Thomson Reuters

In this age, which believes that there is a short cut to everything, the greatest lesson to be learned is that the most difficult way is, in the long run, the easiest. — Henry Miller

Of all the sports I play — basketball, tennis, football, biking, running and hiking — hiking provides a number of lessons for Islamic finance and the halal industry.

The metaphor is applicable to many economic sectors, industries and companies, but more so in these two inter-related yet mutually ignored movements.
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February 04, 2013

FEB 4 — I never thought I would say that publicly, but the lesson learned is, “Never say never!”

“Never’s a hard call, isn’t it? Never-ish.” — Terry Venables

Tweeting: Reasons and dangers

First, I wanted to understand why people tweeted.

Because they have something of substance or importance to say? On hindsight, probably not, because hyper-connectivity updates make a minute ago seem historical!

Because they want to connect with “like-minded people?” On hindsight, some of those “minds” should be blocked!

Because they want a following? On hindsight, thank God for the ability to block, as this becomes an addiction for some!

Because they want to only follow, say, a famous athlete, movie star, etc?

Or that they just want to be part of a fad and then drop out when it fades?

Second, I wanted to know the “dangers” of tweeting.

That which has been tweeted cannot be deleted. Possibly retreated. But from a public relations 101 angle, that which cannot be deleted is a disaster for reputation management.

The 24/7 information download world we live in reminds us more often than not of our missteps and failures than it does our successes. Hence to say “be careful before touching send button” cannot be overemphasised.

The apology tweet cannot undo the damage done, case in point people like Rupert Murdoch and many athletes, politicians, business leaders and why even some spiritual leaders.

There is also the danger of pranks played on tweet accounts. Ones opened in your name or those hacking into your account to score a point or to make a statement for individual/group benefit. This has happened to political and spiritual leaders of late.

It’s interesting to note that politicians, like US President Barack Obama, have a team that tweets on their behalf. Why you ask? These are what you call an “impersonal tweet” driven by careful public relations management.

The tweet can bring “rain or sunshine” to the subject matter depending on prominence of the tweeter. For example, during a recent college football game, the sportscaster made remarks concerning the beauty of one of audience members, and she suddenly went from less than 10,000 followers to over 200,000 followers (including a superstar basketball player by the name of Lebron James). So tweets can create overnight fame or notoriety depending on which side of an issue one stands and supports, and the reaction one poses to responses.

There are the spam tweets, hence, the nuisance of time consuming blocking comes into the picture.

Third, and probably the most difficult question, what value will I bring into the tweeting wide world? I come from the realms of Islamic finance and halal hence, and, much like TV sitcom actors, we have generally encased ourselves in that narrow arena. But this is what we do, and does not define who we are.

At one level, all of us have secret aspirations of becoming superstar athletes, CEOs of Fortune 500 companies, top journalists, movie stars, doctors, scholars, can-do politicians, inventors and entrepreneurs, better dads/moms, sons/daughters, even bad guys, etc., where what we say moves companies, markets, voters and arguments.

Thus, it seems tweeting is about being the first on headline commenting and/or reporting from the mundane (subjective) to the moving.

Exposure and experience

The nature of my “calling card”, global in title, has made me an international road runner. It has exposed me to so much in the last 15 years, from airline lounges, airlines and journeys of, at times, 17 hours, airports, hotels, taxis, tourist traps, meetings, etc. Thus, at times, I feel like a secret shopper, business development officer (outside my profession), observation tower (of people, marches, events, speeches, natural phenomenon, etc.), roving reporter, etc.

I want to share these moments, in the form of 140-character mini op-eds, but never took the first step for a number of reasons (probably intimidated by such media), and, on hindsight, missed the opportunity to connect and learn from others (much earlier). Initially, I would have probably tweeted to connect with fellow practitioners in Islamic finance and halal (large community?), and then expanded to the more pressing issues in the Muslim world, from sports to athletes to policy to tolerance to hypocrisy, and connectivity and perception influence of the non-Muslim world.

Lincoln quotes for Muslims

Let’s start with a tweet for all Muslims and non-Muslims:

“I don’t like that man. I must get to know him better.” Abraham Lincoln, 16th president of the US. How is this even different to the basic teachings of Islam or any other religion? Muslims, including myself, are you reading, understanding, and executing? The non-Muslim world needs to heed the advice of this statesman towards Islam.

He also said: “… Nearly all men can stand adversity, but if you want to test a man’s character, give him power.’” All of us have examples of people we know or can predict who will fail or have failed this character test! The Muslim world is not only cursed with black gold (oil), but also power without accountability still prevails in many parts of its society. Do we thank the colonial geographic boundaries that seem to have created mental barriers?

What would I ask in the world of Islamic finance and halal

I would tweet the following:

Students: they are spending money on courses, diplomas, etc., and want meaningful jobs upon graduation; yet, we talk about shortage of skilled people, huh? Walk the talk, Islamic finance.

Scholars: they are entitled to a livelihood to support families, but what is reasonable number of board membership?

Man on street: Islamic finance is not Qard Hassan (benevolent loan) or charity, but about profits not profiteering. Where are the imams, as they are the local trusted gatekeepers to the community, and, in Arab Spring countries, it’s about the mass retail.

Disenfranchised (bulk of the 1.6 billion Muslims): we are still waiting for Islamic finance and many of our Muslim-majority countries are non-co-operative, whom do we turn to? Shadow banking system is the only alternative as only collateral is life/blood?

Regulators/public sector: need to establish foundation for market, initially lead market and then regulate market, and cannot be an indefinite market participant as the “crowding out” phenomenon kicks in.

Anti-shariah movement: present your evidence on it financing terrorism, Malaysia and Dubai would host such an event to discuss its veracity.

Conventional institutions in Islamic finance: are you about absorbing liquidity or providing value and commitment? HSBC Amanah downsized operations in a number of countries where margins are not being met, profits versus commitment (beyond short term).

Islamic finance: you have proved you are viable (alternative), credible (non-Islamic institutions involved), durable (better survived the recent external shock, but not by much), but what are your sustainable and scalable growth plans?

Halal industry: what is your story (brand)? Why are you even more fragmented than Islamic finance? Don’t you realise you’re an asset class? Malaysia, you will just lose the halal hub title if you do not focus in building such companies (inorganically) as global brands versus the continued comments of Jakim, HDC, etc.

Modern-day lifetime achievement award for Islamic finance: Sh Mohammad bin Rashid Al Maktoum, Ruler of Dubai, VP and Prime Minister of UAE, two words: continued commitment.

The rest of the world: what is Islamic finance and how has it changed lives, inspired humanity, or rather where is IF in moments of global tragedies and catastrophes?

OIC tweets

I would tweet on following:

Why do we have “His/Your Highness”, “Your Majesty”, “Sultan”, “Emir”, “Prince and crown prince”, “Datuk and Tan Sri”, “King and Queen”, etc. when the Prophet of Islam did not have such references. Yes, we respect our leaders and titles like President, Vice-President, Prime Minister. Why can’t we make them more human, approachable and accessible? Aren’t these titles creating a mental and social class war/barrier? Is this an effective way to rule in the 21st century?

Where is the healthy food in Malaysia? Yet, what little is available tends to be expensive! I have been coming to Malaysia for 15 years, and go to the gym religiously, and rarely see Malaysian men there. Obesity-cum-diabetes is a major issue in the GCC, and Malaysia may not be far behind! (But Malaysian men may be spending time on football pitches and badminton courts — who knows?).

We have 57 Muslim countries in the OIC, but what clustering has captured the investing world’s attention like BRICS? I suggested SAMI + 3 — Saudi Arabia, Ankara (Turkey), Malaysia, Indonesia, Egypt, Pakistan and Nigeria. It could also be MIST + 3, but MIST implies a fog, haze, etc, lack of clarity.

To tweet or not

When Microsoft started making computers in the ‘70s, it wanted to put a PC in every home. In less than 40 years the world has changed and today we have a computer in every pocket/handbag.

The dangers of tweeting remain. Once you start, it is difficult to get out of it. It may rule your life (i.e. one keeps checking the phones at the expense of real-life human contact). But like everything in life, moderation is key in action.

Need to tweet to connect with a society wired on social media, yet to do so with wisdom, caution and more importantly substance. There are always the red herrings of “committed” tweeting communities that feel the need to share their every move — it is this culture that perhaps still stops those who would/could benefit the world of “tweet” from tweeting.

In conclusion, to tweet or not to tweet is no longer the relevant question to being relevant today. Maybe the question should be — do I tweet to share my next appointment or my next meal or my next relationship — or do I tweet to make the world a better place? To do my small part in making that difference?

So, for those about to tweet, we salute you (but be careful and responsible).

Saudi Arabia is set to build 2.4 million housing units by 2020, but the Kingdom’s real estate investment is short by SR400 billion to meet anticipated housing demand.

Saudi Arabia housing stock will rise to just over seven million units by 2020, compared to 4.6 million by 2010, according to National Commercial Bank Capital research.

wallyg / Foter.com / CC BY-NC-ND

Nwardez / People Photos / CC BY-NC-SA

The Middle East is awash with billions of dollars worth of undiscovered oil and gas buried deep in the region, according to the United States Geological Survey. But the largest deposits are not in Saudi Arabia. CONTINUE READING

By Rushdi Siddiqui, Global Head of Islamic Finance at Thomson Reuters

For the first column in 2013, I did not want a me-too article about sukuk issuance for year ahead, central bank authorisation of a mega Islamic bank, or new IFSB or AAOIFI standards, but shine a spotlight on ‘unsung heroes’ of an Islamic financial institution.

At an Islamic award ceremony and ensuing Press release, the CEO of an Islamic financial institution usually thanks his staff and employees, and typically says, “… without our hard working employees none of these achievements is possible…” These are not hallow words, as he ‘flies or falls’ based upon staff meeting their KPIs down the chain of command to the clerk in the mailroom and the janitor.
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yewenyi / Foter.com / CC BY-NC

China recently replaced the UAE to become the Saudi Arabia’s largest exporting market. The Asian giant’s share of Saudi exports stood at 15.4%, according to National Commercial Bank report.
This is a significant development for both countries. CONTINUE READING

Saudi Prince Mohammed Bin Nayef’s appointment to the Kingdom’s powerful interior ministry job - replacing Prince Ahmad bin Abdel-Aziz Al Saud — is being seen by many as a precursor for higher office. CONTINUE READING

OneEighteen / Foter / CC BY-NC

Saudi Aramco ‘s decision to proceed with the 400,000 barrels per day Jazan Refinery is part of a trend of turning the Middle East into a beehive of global refining activity. CONTINUE READING

Saudi Arabia will emerge as the second fastest growing G20 country after China this year, while Gulf economies will outpace global and emerging growth, according to Barclays Capital research. CONTINUE RE

Bakar_88 / Foter / CC BY-NC-SA

ADING

Bakar_88 / Foter / CC BY-NC-SA

After stellar growth in the past two years, a moderation in oil prices poses stiff challenges for Saudi Arabia in 2013 and beyond.

Saudi economic growth is expected to moderate in 2013 as the global economic slowdown continues to fester and erase some of the exuberance of emerging economies. CONTINUE READING

© Salim Photography/ www.salimphoto.com / Foter / CC BY

While regional stalwarts Saudi Arabia, UAE and Kuwait grab all the economic headlines, the Omani economy is quietly showing impressive growth and resilience. CONTINUE READING

The Saudi banking sector is marching forward, shrugging off global fiscal challenges facing the rest of the world. CONTINUE READING

By Rushdi Siddiqui, Global Head of Islamic Finance at Thomson Reuters

President Barack “Peace” — as no new wars in last four years — Obama may be less beholding to special interests during the second term. He will now want to leave a legacy behind, both domestically and on foreign policy. However, his legacy will now be held hostage to the court of public opinion.

The re-election of Obama, both on popular (50 per cent to 48 per cent) and electoral (303 to 206) votes, is a message sent by the American people to work smarter (not only harder), longer, faster, and with partners, to “fix” what is broken, “mend” what needs fixing, “push” forward what is working and a “probation” to try new initiatives.

The post-election comments for the peaceful president from world leaders, from secular to spiritual, have been positive, glowing, and extending an open hand to assist in the hard work ahead as all of us are in the same “boat” called humanity wanting dignity.

In the second term, Obama needs to focus on Asia, generally, before China’s once-in-decade political make-over starts execution (no pun intended), and possibly, a leading Muslim country, specifically, as an example a country which closely represents US ethnic, religious, and cultural diversification and “tolerance.”

Maybe it’s time for the president and the US to find and get behind an “Egypt of Asia”, as the oil and (perceived) regional influence of certain countries of recent past did not pan out as expected.

Omnipotence?

Will there be peace and stability in the Middle East within the next four years? It may be easier to have an Olympic gold medal winner in badminton from Malaysia than find the elusive peace in a region of piecemeal countries united and, yes, divided by tribalism.

The omnipotence of the US as the voice of reason and calming stability backed by her economic and military might has been downgraded (let’s leave S&P out of the equation) by the misadventures of George “Bring it on” Bush and the systemic risk to global economy by the sub-prime fiasco (also under George Bush), and the corresponding rise of the BRICS: Brazil, Russia, India, China and newcomer South Africa. Clearly, the power has shifted away from the US. Where it has shifted to is another issue, as it’s not debt battered and financially bleeding Europe.

Hotspot

The Arab Spring flushed out the regional diminishing US influence, including the unflinching support of entrenched poster child ally, Hosni Mubarak/Egypt, a benevolent dictator.

However, the Middle East remains important mainly because of black gold, oil, and the havoc a price escalation can play on industries and capital markets in an already weakened global economy.

The Middle East also remains a region of “unknown knowns”, composed of a complicated jigsaw puzzle of Egypt (controlled chaos), Libya (chaos), Lebanon (proxy chaos), Palestinian/Israel (two-state solution), Syria (civil war), Yemen (drones), Iran (nuclear), Al-Qaeda (stateless terrorism) and so on.

Although not mentioned on any geographical or topical defining map, Pakistan and Afghanistan are an extension of the region for the United States’ earlier intervention and on-going challenges. To put it differently, “they broke it, and have to buy it,” and with no return policy.

Thus, it will take more than four years of precision focus, shuttling negations, wisdom patience, printing press of money and, possibly, divine intervention to have an acceptable “normality” i.e. absence of conflict, not necessarily peace.

Expanding attention

The primary focus will continue on the Middle East, but, much like five-year business plans looking for new business opportunities in different geographies, the US needs to remove the “horse blinders” and see the Muslim world not as one, but as many countries with rich histories, cultures and influences. Thus, oil/gas reserves, military bases and large domestic population will continue to be important, but possibly not outcome determinative.

To make Obama’s second term more interesting on foreign policy, vis-à-vis the 57-country Muslim world, selected Muslim countries need to “pitch” themselves as representative of democratic and religious principles (is this possible?). There are three Muslim countries in the G-20, Turkey, Indonesia and Saudi Arabia, and these are only a starting point.

Other countries worthy of consideration, based upon metrics-like population, GDP growth and 2020/2030 vision, capital markets, democratic principles, OIC influence, etc include Egypt, Pakistan, Nigeria and Malaysia. As mentioned above, the court of public opinion will also matter for Obama, hence, from the above-mentioned destinations, the American public has a “challenging” opinion about these countries, except one.

The Malaysian elections are around the corner next year, and the incumbent and opposition can expand their platform to pitch about Malaysia to both the White House and Congress.

Winning the Nobel Peace Prize early in his first term is a tough benchmark act to follow for the second term for any democratically elected leader. His second term may be an extension of hope that transforms to trust that brings change, hence, actually earning the Prize that he accepted in the first term.

* The views expressed here are the personal opinion of the columnist.

By Rushdi Siddiqui, Global Head of Islamic Finance at Thomson Reuters

The forty-year old, $1.2 trillion Islamic finance industry needs to take stock and look in the mirror and examine the reflection holistically. Have we arrived at the ‘reset’ moment that every relationship, in this case, faith and finance, must surely undergo?

This fortnightly column, Participation Finance/Banking, will be about the signposts, speed bumps, potholes, and detours on the road ahead in Islamic finance. It’s about addressing the present challenges for tomorrow’s deliverables, changing today’s dialogue for tomorrow’s conversations, and focusing on the substance over form so we move towards financing/banking (with established rules) and away from sole reliance on the faith.
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By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

Will the “truth” set Islamic banking free from the “cheer-leading reins” that may be holding it back from authenticity-cum-innovation?

Mushtak Parker provides his insights on a successful Islamic banker and institution and some of the milestones of the industry.
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Leading journalist on Islamic finance tells why he is often ‘harsh’ on the industry and his other views

“To be persuasive we must be believable; to be believable we must be credible; (to be) credible we must be truthful.” Edward Murrow.
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By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

The Goal: The central issue is about the industry controlling its own destiny

“Behind every success is endeavour… behind endeavour, ability… behind ability, knowledge… behind knowledge, a seeker ….” Unknown.

As the blessed month of Ramadan arrives, here is my “seeking” list for Islamic finance. It’s not about another voice asking when the International Islamic Liquidity Management Corporation (IILM) will issue its first paper or disagreeing with CIMB Group CEO Datuk Seri Nazir Razak’s comment on “rolling back” government’s involvement in business, but more to do with controlling our own Islamic finance manifest destiny.
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Can Saudi Arabia’s Tadawul market withstand foreign investor scrutiny? More so than most other regional markets, says Al Rajhi Capital. CONTINUE READING

Breakeven oil prices for Saudi Arabia and the UAE decline for the first time in years, according to Deutsche Bank, which is great news for the

GCC, especially at a time of falling crude prices and global and regional economic uncertainty. CONTINUE READING

Middle East states are the biggest military spenders in the world as a percentage of their GDP, with Saudi Arabia emerging as the world’s eighth biggest spender on arms in dollar terms last year, according to SIPRI…. CONTINUE READING

The Saudi population is expected to grow by nearly 50% over the next decade. This is both a challenge and an opportunity and key to the government’s long-term development plans, say Standard Chartered Bank analysts…. READ MORE HERE

By Rushdi Siddiqui, Global Head Of Islamic Finance, Thomson Reuters
June 28, 2012

There were two important announcements last week concerning Islamic equity index:

1. Malaysia’s Securities Commission ‘…announced the adoption of a revised screening methodology to determine the Shariah-compliant status of listed companies …’
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By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

Islamic finance has reached it natural market share in certain markets according a recent A.T. Kearney report, hence, an early ‘amber colored flag alert’ on the need for international expansion.

Islamic finance needs to find an example of a model company, ideally from the Muslim world, which has become a global player based upon customer service, unique selling proposition, innovation, demand, and a charismatic leader.

Should it also look to the west, and examine the likes of Google, Apple, Coca Cola or Pepsi, ExxonMobil, etc.? Does it look at the management style of former GE Chairman Jack Welsh or the vision of the late Steve Jobs?
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Gulf economies, led by the UAE, have fared quite well in a World Economic Forum focused on world’s trade-friendliness and access to global markets.

The UAE was ranked 19th among 132 countries in an in-depth survey conducted by the World Economic Forum. Oman, with a global ranking of 25, surprisingly emerged second among Arab countries, with Saudi Arabia close at its heel, at 27. READ MORE HERE

“Perhaps the modern technology, satellite TV and new media, are appropriate environment for the (marginalized),” tweeted Salman Al-Oudah on Tuesday.

That’s quite an ironic tweet, given that Mr. Al-Oudah is hardly a marginalized member of the social media community. Indeed, Forbes magazine ranked the Saudi cleric as the fourth most influential Arab Twitterati in the world, and in addition to his one million Twitter followers in two languages - English and Arabic - he has garnered no less than 63,000 Facebook ‘likes’ at last count. READ MORE HERE

Poster Boy NYC / Foter

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

To grow, Islamic banks must compete with conventional lenders

Dedicated Islamic banks are generally national in nature and in certain markets have reached their ‘natural market share’ for Islamic banking, according to an A.T. Kearney study.

A recent report by the consulting firm A.T. Kearney, The Future of Islamic Banking, and a Reuters article, ‘No windfall from Qatar ban on Islamic windows’, have generated much productive chatter globally.
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By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

The New York Times recently interviewed several American Muslims, including me, working in the financial arena for an article Muslims on Wall Street, Bridging Two Traditions. It explored two ‘conflicts': Muslims working in conventional finance may encounter ‘interest’ against their faith, and challenges of abiding by Islamic ‘traditions’ in a secular workplace.

Today, it seems to an outsider, the burning issues for Muslims on Wall Street include prayer breaks, fasting and productivity, bonding after-office drinks, shaking a woman’s hand wearing a hijab, and structuring instruments dealing with (the prohibited) interest.

This cannot be what Muslims are about. Also, more credit must be given to working non-Muslim colleagues on understanding Muslim sensitivities.

Common shared values

Muslims, like other people with strong beliefs, do not see themselves exclusively focused on or defined by such issues. Islam has spread throughout the world because of its dynamic nature, where it influences local customs and is ‘influenced’ by the older local culture.

Religion is a private matter and it’s looked upon as foundation for building inner discipline and external strength to address challenging situations. People of faith, like their secular colleagues, want to climb the corporate ladder and break the glass ceiling to get to the executive floor, if not the corner office. Muslims have been on Wall Street and High Street for many years, if not decades, and it’s only now they are being noticed. The difference between then and now is there are more Muslims in the financial sector and non-Muslim colleagues know more about Islam because of a combination of internet, 24-7 news, 9/11, documentaries, Dubai’s accomplishments, Islamic finance and personalities like His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

It should be noted that many Muslims were involved in the Occupy Wall Street movement because of common shared values. In the New York Times article there are two quotes that best summarise how Muslims, residing in a non-Muslim country such as the US, should think about and approach a place of work and perception of fellow workers. “I think Muslim professionals are too sensitive and underestimate our co-workers,” comments a consultant in the article.

“Seek the opportunities and firms that speak to their set of values, expertise and passion,” said Mohammad Al Arian, CEO of Pimco.

Just as an employer interviews a potential employee, the latter also needs to interview the former.

I have worked at two multinational companies in the US, heading their Islamic finance business, in New York. First at Dow Jones Indexes for 10 years and now at Thomson Reuters.

A common denominator for international companies is their diverse employee base due to extensive international presence, including many Muslim countries. The corporate culture in these companies reflects common shared values formalised in codes of ethics. Thus, these companies understand ‘sensitivities’, and have high expectations of all employees.

As Muslims working in the West we do have a tendency to initially “underestimate our co-workers” in understanding our rituals (prayers, fasting, etc.), and our prohibitions (alcohol). While it could be attributed to many things, such as prejudices, with time there is a mutual understanding and respect.

The New York Times article used examples of Muslims finding places for praying during working hours or Friday prayers, and fasting during Ramadan. The article should have taken this one step further, and asked the Muslim worker about non-Muslim colleagues fasting or visiting a mosque.

Most, if not all, of us have non-Muslim colleagues who have fasted, some partially (till lunch time) and others until sunset. One of the great attributes of Americans is they like challenges, and will push the envelope of endurance. Others have visited mosques, and made observations such as “nothing fancy inside”, “where are the stained glass windows, pews, gold crescent and star?”

Maybe the article should have interviewed non-Muslims working in senior positions in Islamic finance in Saudi Arabia, the UAE or Malaysia on drinking alcohol, shaking hands with conservative women, breaking meetings for prayer time and so on. As senior executives, they are deemed ambassadors of the Islamic financial institution, and it does imply abiding by a certain level of Islamic code of conduct in public places.

Bottomline

The bottomline is that there is understanding and respect for rituals as long as teamwork, quality and deliverables are not compromised.

Muslims working in non-Muslim countries do understand work is for work, even in Islamic finance, and informed non-Muslim colleagues understand basic tenets of Islam. Muslims need to continue taking a pragmatic, over dogmatic, approach to finding the balance between faith and finance.

The writer is Global Head, Islamic Finance and OIC Countries, Thomson Reuters. Opinion expressed here is the writer’s own

A Jadwa Investment press statement notes that Saudi Arabia’s net foreign assets rose by a little more than $100-billion to reach $600-billion by the end of 2011, according to its estimate.

For the first time, data on the total foreign assets and liabilities of all componentsof the Saudi economy (government, companies and individuals) has been published. It showsthat their combined foreign assets grew rapidly in recent years to stand at $707 billion at the end of 2010. With Saudi entities and individuals owing $213 billion to foreigners,total net foreign assets stood at $494 billion at the end of 2010. We estimate that theKingdom’s net foreign assets rose to almost $600 billion at the end of 2011. This is very high and represents a core source of strength for the economy.
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By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

Dear Dr. Ahmad Mohamed Ali, President, Islamic Development Bank (IDB) Group:

Asalaam Alaikum:

The Islamic finance world welcomes your comments on the ‘Mega’ Islamic Bank to effectively compete against well capitalized conventional financial institutions.

“…The ‘Mega Islamic Bank’ comes as an initiative of the Islamic Development Bank in its efforts to address the dearth of senior financiers, the absence of the Islamic tools of stock exchange and the absence of market liquidity between Islamic banks.”

However, $1 billion, with $500 million in paid capital by the three founders (IDB, Dallah Albaraka and Qatar Government), is smaller than three existing Islamic banks, which have never addressed themselves as ‘mega.’ The three include Saudi Arabia’s Al Rajhi, Qatar’s Mashraf Al Rayan and Kuwait’s Kuwait Finance House (KFH). Furthermore, it seems the ‘mega’ story may be incomplete without Malaysia’s participation.

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By Rushdi Siddiqui

Daud Vicary Abdullah is an authority on Islamic banking and has contributed to a number of books on the subject.

He has been in the finance and consulting industry for more than 38 years, with significant experience in Asia, Europe, Latin America and the Middle East. Meet Daud Vicary Abdullah, the president and CEO of International Centre of Education in Islamic Finance (Inceif), the global university of Islamic finance.
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“We must remember that one determined person can make a significant difference, and that a small group of determined people can change the course of history.” - Sonia Johnson

The recent BRICS summit in New Delhi, India, should be a wake-up call for the Muslim world’s own proposed BRICS, called SAMI: Saudi, Ankara, Malaysia and Indonesia.

The BRIC story, Brazil Russia, India and China, started in 2001 by a Goldman Sachs’ Jim O’Neill, “Building Better Global Economics BRICs”. In late 2010, an “S” was added for South Africa. These are growth markets with increasing political clout, and combining for nearly 50 per cent of the world’s population, US$14 trillion (RM42 trillion) GDP, and excess of US$4 trillion (RM12 trillion) foreign reserves (source: Wikipedia).

Today, politics is increasingly subordinated to economic capitalism, as ideology can no longer address the concerns associated with the “Misery” Index: unemployment, inflation, etc. The author initially raised the “Muslim BRIC”, SAMI, concept last year, as existing Muslim country clusters like OIC, GCC, MENA, CIS, etc., have not captured the imagination of investors.

However, after meeting with various institutions and individuals, like Dr Nasser Saidi, chief economist of DIFC, from the Muslim countries, one of the most commonly heard feedback was the four country clustering, SAMI, was too small and not representative sample of the 57 Muslim countries (OIC).

Another feedback was there are political sensitivities with OIC sub-clustering, hence, it seems the politics (cart) are placed before economics and finance (horse). Finally, sporadic comments included, “why include Malaysia?” Answer is below.

SAMI + 3

The collective market place is more intelligent than an individual, hence, proposed Muslim majority countries to add to SAMI could include: Nigeria, Pakistan and Egypt. If we look at metrics for present and growth concerning population, GDP, regional influence (politically and economically), Islamic finance, halal industry, nuclear capability (Pakistan), inclusion in other grouping (Egypt as part of CIVETS, and NIGERIA as part of Next-11), etc., these three countries are ahead of their brethren Muslim countries.

If we look at projections from the 2007 Goldman Sachs study, BRIC and N11 Nations, we see that Nigeria (percentage growth from 2006 to 2050 is 1416 per cent), Egypt (1600 per cent) and Pakistan (908 per cent) are mentioned in the top 22 countries for GDP by 2050.

The challenge now becomes what to call the new grouping (not political club)? The world is about sound-bites and catch-phrases, as goes to retention and recall, hence, the appropriate naming will goes to reach/traction, assuming the combined substance of the countries conveys a strong message of growth and opportunity.

Thus, do we call the proposed grouping as SAMI + 3, SAMI and Beyond (sounds more like a cartoon outer-space movie), SAMI-PNE (pronounced as symphony) or something else.

The ideal situation may just be SAMI + 3. Why? As other Muslim countries grow and develop, they can be added easily without having to reconfigure the name. The only issue with plus (+) Muslim country scenario is the additions to not get the branding in the marquee name. Well, there are trade-offs and difficult to satisfy everyone.

(It should be noted that metrics on political freedom, human rights, corruption, illiteracy, healthcare, infrastructure, per capita income, brain drain, capital flight, etc., were not factored into the equation in suggesting Nigeria, Pakistan and Egypt.)

SAMI + 3 Bank

The naming of the Muslim country cluster is only a beginning. The lubricant for any country that wants to become high income economy is finance, Islamic, conventional or combination.

For example, does the Muslim world need a development bank? We already have the Triple A rated Islamic Development Bank, and, it has done a remarkable job since its inception under HE Dr Ahmad Mohamed Ali Al-Madani. However, one cannot have enough capital, especially, when some of the least developed countries with the fastest growing population happen to be Muslim countries.

(Some “experts” have equated the volatile mix of “poverty, population and pulpit pronouncements” as breeding ground for opposition, coups and extremism.)

If the recent BRICS summit can raise the prospect of a development bank, “BRICS Bank”, to fund infrastructure and development projects in the emerging markets, which happen to be all Muslim countries, then SAMI + 3 needs to consider merits of comparable bank.

Thus, as an alternative to the multi-lateral World Bank, Asia development Bank, Africa Development Bank, etc., is being considered for not only infrastructure but also facilitating trade, the Muslim world also needs to have some parallel thinking/development to capture the sloshing liquidity.

However, it should not be another dedicated Islamic financial institution or proposed Islamic Mega bank, as many Muslim and non-Muslim countries (read India) neither have a regulatory infrastructure in place nor have made Islamic finance a priority.

The lack of interest in Islamic finance may be due to the now disproven argument (in North Africa) about catering to Islamists. The more important point is not to wait for the “‘i’ to be dotted and ‘t’ to be crossed” for arrival of Islamic finance in these jurisdictions, as the law necessity can be invoked as interim suggestion for finance to fund growth, development and trade.

Malaysia Leads SAMI + 3

Malaysia has never been equated to be a surplus capital provider vis-à-vis the petro-liquid GCC region, however, increasing number of entities in the Gulf are raising money in Malaysia via sukuk and bond.

Thus, Malaysia may actually be perched in a unique (window closing) position to lead not only the Muslim world, but also the emerging markets to establish what the BRICS summit suggested: lead, house and host a (SAMI + 3) development Bank.

Thus, for once, a Muslim country leads by providing a model for BRICS with a “go to market concept” model development bank.

Malaysia has history of “vision, will and means”, in achieving the imaginable, be it overcoming the Asian financial crisis without IMF medicine, becoming a globally recognised Islamic finance hub from a modest start in 1983 or spear-heading and housing a multi-jurisdictional entity, IILM, to address short term liquidity for the US$1 trillion (RM3 trillion) industry.

Answer: Malaysia should be included in SAMI + 3!

For example, five of the IILM supporting countries, Malaysia, Saudi, Turkey, Indonesia, and Nigeria, overlap with SAMI + 3, and the new Egypt and Pakistan should be amenable to a development bank that could assist in job creating trade and investment.

Reality v Rhetoric

The real work commences after the photo-op sessions are over, and one finds there are real world challenges, from subtle to real and in-between. For example, some of the BRICS challenges that may have application with the proposed SAMI + 3 clustering:

Border challenges: India and China

* Indonesia and Malaysia or yesterday’s news?

Governing Ideology: Communism (China), Democracy (India/Brazil/South Africa), Democratic Authoritarianism (Russia)

* Outside of Saudi Arabia, six of the seven SAMI + 3 are democratically elected governments.

* Military influence (budget as percentage of GDP) can be seen within Turkey, Egypt, Pakistan, Nigeria and possibly Indonesia.

Regional influence (financial, military, etc): Russia and China

* Saudi Arabia and (the new) Egypt?

* Interesting possibility of India (BRICS) and Pakistan (SAMI + 3) for regional influence.

Obviously, there are other areas were “intent concerns” may lie amongst BRICS countries, but it would appear there are fewer areas of mutual suspicion within the SAMI + 3 for, say, a development bank.

First Summit

Malaysia, unlike many Muslim countries, typically puts on good international shows, be it conferences or summits. The time may be right and ripe to put on the First SAMI + 3 Summit in Malaysia, like the first BRIC Summit in 2009, and, like BRIC, led initially by finance ministers to issue a declaration for a just, financially inclusive, impact investing multi-polar world order.

This could possibly be bigger than or complimentary to the Asean story. The political impact, within Malaysia and outside, is a needed “feel good” story today within the Muslim world.

Thus, the alliance, SAMI + 3, may be just counter-balance to BRICS and G-7 on geo-political affairs.

The faces and places of a New World Order: Control our destiny or be defined by others?

Egypt?

Rushdi Siddiqui is the global head of Islamic finance at Thomson Reuters

With Gulf economies poised for growth on the back of strong macroeconomic policies, regional stock markets are also set for growth.

The two most liquid GCC markets - Dubai and Saudi Arabia - are both up well over 20% since the start of the year, with the Egyptian market also rising an astonishing 33%. READ MORE HERE

It will be no mean feat to outpace Qatar’s amazing GDP growth, but that’s exactly what Saudi Arabia is estimated to accomplish in 2012.
The tiny gas giant has been posting double-digit growths for the past six years, but Saudi Arabia, the region’s largest economy may eclipse the country this year, if current trends continue. READ MORE HERE

By Rushdi Siddiqui, Global Head of Islamic Finance at Thomson Reuters

We already know about displaced commercial risk, credit, liquidity, operational, Shariah non-compliant, and markets risks in Islamic finance. What about ‘key-person’ risk in Islamic finance?

What does a former Minister of Economy of France (Christine Lagarde), former Prime Minister of United Kingdom (Gordon Brown) and former under Secretary for International Affairs, US Treasury (John Taylor) have in common? They were all high profile public sector personalities pushing Islamic finance in their respective jurisdictions, and, upon leaving office, the movement’s momentum has been meandering or has stop ‘cold’ in the tracks.
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By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

“Interest equals disinterest because the lender has nothing to do with the borrower and his business. Islamic finance aims at creating an economy in which one financial dollar equals one real economy dollar.” Yusuf Talal DeLorenzo, Shariah scholar
Today’s attention span can be described by a seven letter word “Twitter”. The amount of seconds in a minute, minutes in an hour and hours in a day is the same as far as one can remember, yet we seem to be busier than ever in an information overload world.

It seems the typical time for processing, analysing and drawing conclusions of, say, news headlines is confined to the first few paragraphs of a story and we must act fast in scrolling headlines in real time.
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The United States’ hydrocarbon’s production will eclipse Saudi Arabia and Russia as early as 2017, says Citibank. In fact the energy surplus points to North America effectively becoming the new Middle East by the next decade. READ MORE HERE

An OECD study shows countries with greater income from natural resources tend to be socially less developed. Which perhaps explains why Saudi, Qatari and Kuwaiti students fare far worse then Lebanese and Taiwanese students. READ MORE HERE

Barclays Capital expects GCC economies to rise 5.4% this year, but Citibank worries that a sudden drop in oil prices could leave the states with a dilemma: whether to curtail spending or keep pumping funds into the economy. READ MORE HERE

Saudi Arabia is exploring for 100 billions of new barrels to retain its influence in world oil markets.

Saudi Arabia is exploring for nearly 100 billion barrels of new oil in existing fields and offshore in the Red Sea, according to an Associated Press report. READ MORE HERE

Chatham House says OPEC may be heading for a Shia-Sunni split, but it appears to have discounted the group’s enduring powers and its resilience despite wars and severe disputes between member states. READ MORE HERE

While investors were looking elsewhere, Dubai and other Gulf markets have been staging an impressive rally. What’s this: a Gulf stock market racking up double-digit growth in the first six weeks of the year? READ MORE HERE

indigoprime /Free Photos

As the world faces its biggest oil crisis since the 1970s, politicians are blaming every one - President Obama, Iran, QE and Saudi King - for high oil prices. How about putting some blame on Israel for pushing the world into another unwanted war. READ MORE HERE

Feb 17, 2012

Saudi Arabia launched projects worth SAR270-billion last year. No wonder there is a shortage of cement. Expect more shortages as the construction boom kicks off in earnest.

The Saudi Ministry’ decision to ban cement exports to ensure there is plenty of supply available for the local market is a sign of hectic construction activity in the Kingdom. READ MORE HERE

Ellie Brewster /Foter

Booz & Company addresses ways in which the GCC’s private sector can address nationalization and unemploymentby hiring the region’s highly educated female population

Private-sectorcompanies in the Gulf CooperationCouncil (GCC) have an opportunity to address several pressing issues, includingnationalization imperatives and local unemployment, by attracting morenational women into their workforce. Booz& Company has developeda framework to help companies in this effort.

Looming Changes in the GCC Workforce

Private and semi-private companies inthe GCC are under enormous pressure to nationalize their workforce, owingto a combination of high regional unemployment and a currently outsizedproportion of expatriate workers in the region.

Thus far the talent pool of women employeesin the region remains largely untapped, due to social, occupational, andlegal challenges. Private and semi-private organizations in the GCC donot rely heavily on GCC nationals to fill their employment needs, and theyrely even less on women as a group.

GCC governments have taken a numberof steps to improve this situation, such as Saudi Arabia’s national policies,including a five-year plan, Human Resources Development Fund (HRDF) programs,and royal decrees, and the women’s leadership center that Qatar is establishing.

However, to achieve the goal of greateremployment among national women in the regional workforce, companies willneed to implement internal programs to recruit, develop, and retain womenemployees. This will require solving a number of social, occupational,and legal challenges, with roots in long-standing and sensitive culturalattitudes in the region.

“There are clear benefits to be claimed.The companies that take the lead in this issue will help address the GCC’sunemployment problem among nationals. They will also assume a key rolein shaping the future of women in the region,” said RamezShehadi, Partner with Booz & Company. “Mostsignificant, they will tap into a base of talented national women thatis well-educated and eager to join the workforce, giving these companies a long-term competitive edge.”

A Three-Part Framework for Change

Booz & Company has undertaken substantialresearch in this area, includinga comprehensive survey and client work. We have also developed a frameworkto address these issues, in order to help GCC companies more successfullyintroduce national women into their workforce in greater numbers.

Our framework consists of three elements:1) defining an overall corporate vision for employing women based on asolid case for change; 2) developing a talent management strategy and operatingmodel to source, train, promote, and retain women; and 3) implementinga change management strategy to engage with and secure the support of internaland external stakeholders.

1. Women’s Employment Vision

One thing is clear from the effortsof companies worldwide to attract and retain talented women: Implementingdiversity for diversity’s sake does not work. To begin successfully integrat­ingwomen into their workforce, GCC companies must have a senior champion whocan make a business case for the need to do so.

“Creatingsuch a business case is not without challenges. There is little in theway of objective, broad-based research that clearly establishes the importanceof integrating women into the workforce, and nonethat is specific to the region,” said Dr. Leila Hoteit, Principal withBooz & Company. “However,anecdotal evidence from a multitude of companies shows the value that astrong female talent base can engender. A business case could be basedon any of three elements: workforce,customers, or suppliers.”

Workforce: A dedicated effortto recruit and retain women does more than just fill talent gaps. A diverseworkforce leads to higher employee engagement across the board. More than100 studies have demonstrated the correlation between employee engagementand business performance: Engaged employees are far more productive andcommitted, and they are more likely to make progress toward company goals,as well as the goals of their own group

Customers: Companies in a wide variety of sectors will need to more effectively target women as this keydemographic’s spending power continues to grow.To do so, companies need to ensure not only that they have women on staffbut that women are in the right positions to enhance the company’s go-to-marketstrategy with their insights, such as R&D, product development, marketing, and sales.

Suppliers: Companies need womenin the right roles to raise awareness about potential new suppliers, usetheir networks to build these relationships, and maintain the relationshipsover the long term. One company found annual cost savings of $2 millionto $4 million when it focused on women-owned businesses by categorizingall third-party orders and enhancing the competitiveness of each category.

2. TalentManagement

The second element of the frameworkrequires developing a comprehensive approach to hire the most promisingwomen candidates, invest in developing their technical and soft skills,evaluate them objectively, and retain them.

Talent acquisition: Companiesshould apply a unified process for attracting qualified talent from allavailable sources. This includes hiring entry-level candidates directlyfrom the ranks of recent graduates of women’s colleges and vocationalinstitutes. Another key channel for young talent is to sponsor students.Still another source, particularly for experienced professionals and managers,is the region’s recruiting firms.

“Companiescan partner with leading technology training institutions to establisha pipeline of women professionals with specializedtechnical experience,” said Dr Kamal Tarazi, Principal with Booz &Company. “For example, the Womenin Technology (WIT) program, a collaboration between Microsoft and localwomen’s organizations, teaches computer skills to women in nine MiddleEast and North Africa countries. Since its launch in 2005, WIT has trainedmore than 3,500 women throughout the MENA region.”

The company should ensure the same clearobjectives and criteria are used in recruiting women as in its usual recruitingprocess, and avoid making subjective judgments about, for example, a femalecandidate’s age or number of children. It should also seek to have strongfemale representation in recruiting to project an image of a company thatfully embraces and values diversity.

Learning and development: Inaddition to recruiting and hiring female candidates, companies must implementa training program to develop women employees in technical areas and softskills. Companiesshould consider a mentorship program that pairs less experienced stafferswith more experienced women. In addition to serving as role models, thementors would offer junior women an opportunity to share their concernsand issues.

Performance management: To supportthe integration of women into the workforce, companies must establish anobjective system for evaluating their performance. This process needs tobe clearly communicated and strictly implemented to ensure fairness. Allscores should be objective and measurable, based on specific outcomes (suchas turnover and employee satisfaction in the HR function, or sales numbersfor the sales department), and the evaluation process should include multiplesources of input—e.g., managers, colleagues, and subordinates. Althoughthis is good practice for all employees, recent experience has shown thatit is difficult to implement when evaluating women employees in a male-dominatedenvironment. For example, in some job appraisals, women receive referencesto personality traits—they are “shy” or “emotional”—rather than specificdescriptions of behaviors or quantitative assessments of their job impact.At other times appraisals may reflect an inherent, though unconscious,bias regarding women employees’ long-term commitment to the company inthe context of family obligations.

Retention: Once the company hastaken these measures to recruit, hire, develop, and evaluate the womenin its workforce, it should devote equal effort to retaining women employeesand ensure that they stay professionally fulfilled and motivated. Thisis critical, given the scarcity of skilled resources in the market andthe investment that would be needed to hire and develop a new employee.We advocate a balance of traditional incentives and “pride builders,”or less quantifiable and concrete benefits.The first category, incentives, consistsof fairly traditional HR levers: rewards such as compensation and benefits,opportunities for career advancement, and a work–life balance that offerssuf­ficient flexibility to attend to personal obligations while also pursuinga career. The introduction of resources such as family-friendly policieswould go a long way in helping retain talent: For example, employees mayseek part-time work, or the opportunity to telecommute certain days orfor a finite period of time, as long as the job’s requirements allow forit.

3. ChangeManagement

“Becauseincreasing women’s par­ticipation is a complex initiative with potentialramifications for the entire organization, companies will require an extensivechange management strategy in order to succeed,”said Shehadi. “Atthe outset, all relevant stakeholders,both internal and external, mustunderstand the program and its objectives. This may require overcomingmisguided but still prevalent perceptions among some about the roles ofwomen in society, or their ability to succeed in the private-sector workplace.”

Because these perceptions can be stub­born,changing them within companies must start from the top. Companies mustline up support and commitment from the board and executive vice presidents(EVPs), who must lead by example. Senior management should actively monitorkey metrics through dashboards or score cards that track turnover, thenumber of women in senior positions, and other relevant indicators.

At lower levels, the company shouldidentify middle management champions for the program. These champions canbegin spreading awareness of the program in advance, along with motivatingtheir staff to embrace the change. They can overcome unforeseen obstaclesat that level—through a performance-driven approach—and identify andcommunicate challenges up the chain of command.

Finally, companies will need to adda diversity-management component to the slate of mandatory training requiredof all employees. It is not sufficient to simply prepare women to jointhe labor force; management must prepare the rest of the employees to makethe integration of women a company-wide success as well.

The entire company should build on smallsuccesses, potentially through recognition via in-house communicationssuch as internal magazines or newsletters, or through awards given to thedepartment that has the greatest proportion of women employees, or thelargest number of women in leadership roles.

“Introducing women into the GCC private-sectorworkforce will not be easy, and there is a risk of moving too fast. Eventhose companies that are most aggressively pursuing nationalization cannotsimply replace one skilled and experienced expat worker with one nationalwoman,” said Dr Hoteit. “In the longer term, this change is inevitable.Attitudes in the region are changing, and many companies are now activelyworking to define their strategic vision for how women will fit into theirworkforce. Women have the education and—more important—the desire toplay a more central role in the region’s labor market.”

Reaping the Rewards

The entrance of more women into theregional economy will serve as an economic multiplier, creating benefitsfor each nation as a whole.

“Booz & Company’s research onthe “Third Billion” — the billion women worldwide who are poised tohave an impact on the global economy as workers and consumers — showsthat these new engines of economic activity create vast markets and increasethe size and quality of the talent pool,” concluded Tarazi. “In periodsof relative prosperity, their aspirations and persistence are engines forgrowth. In slower periods, they represent pockets of economic activitythat ameliorate the impact of decline.”

For private and semi-private organizationsin the region, nationalization and regional unemployment provide an opportunityto tap an underused talent pool. Defining a strategic vision to betterintegrate women, developing a comprehensive talent strategy to do so, andcarefully managing the transition will be critical for companies that wantto capitalize on this opportunity. Companies that adopt an intelligentstrategy to manage this transition will gain a competitive edge, througha workforce that is more engaged and better reflects the GCC populationat large.

While publicly Saudi Arabia may not like Iran’s warning that the Kingdom should not make up for lost Tehran oil production, privately the Kingdom won’t mind as that keeps oil prices well above their budget target of USD90.

For now Saudi Arabia is pumping oil at historically high levels, as Iranian exports drop. U.K.‐based Oil Movements forecasts that sailings from the Middle East may rise 300,000 barrels per day (bpd) above Decemb`er levels. READ MORE HERE

_Skender_ /Foter

January 17, 2012

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

“The proper man understands equity, the small man profits.” Confucius.

The year 2011 was the year for [Malaysia] Shariah compliant index out-performance against all conventional developed and emerging market country indicies and almost all frontier countries.

The Islamic finance industry has not talked up the Islamic equity capital market story, as the Islamic debt capital market poster child, ‘Sukuk,’ has become the alter-ego of Islamic finance. But, does that amount to concentration brand and business risk for a $1 trillion, where Sukuk are, at best, 20% of Islamic finance?
Read More

January 15, 2012

A year after HSBC released its 2050 report which estimated that Egypt would surpass Saudi Arabia as the largest economy in the Middle East, the bank has dug deeper in its crystal ball-gazing research.

The first report limited its forecast to the world’s 30 largest economies by 2050 - but has now expanded it to 100 nations and includes more Middle East nations.
And like the first edition of the report, there are a few surprises. READ MORE HERE

January 8, 2012

By Fitch Ratings

Spending by the Kingdom of Saudi Arabia in 2012 will likely be higher than budgeted, but the country will still run a fiscal surplus of 4% of GDP, says Fitch Ratings.

Spending growth will moderate in 2012 compared with last year. In 2011, spending growth reached 24%, the highest in a decade. The government raised public sector wages, created government jobs, injected capital into state-owned lenders and pledged more resources for housing. Capital spending - mainly on infrastructure - exceeded 12% of GDP.
Read More

January 2, 2012

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters 2011

“An optimist stays up until midnight to see the new year in. A pessimist stays up to make sure the old year leaves.”Bill Vaughn.

Islamic finance is staying up for new year for …….

The survey format is straight forward, 16 questions with multiple answers.
Read More

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The year 2011 has been extraordinary not just for the tectonic shift in the region’s political structures, but also the extraordinary pressures and opportunities faced by many regional economies.

With four dictators ousted - including one dead - many others were shaken to the core - the after shocks have reverberated throughout the region in 2011 and will no doubt be felt in 2012.

We identify 50 amazing statistics that highlight the remarkable year: READ MORE HERE

Kuwait-based KAMCO sheds light on the future economic outlook of the GCC based on 2011 and 2012 GDP growth expectations. In addition, the report incorporates growth analysis of consumer loans in Saudi Arabia, Qatar and Kuwait for 9M-11. GDP in Saudi Arabia, Qatar and Kuwait is expected to post growth rates for 2011 and 2012, by 29% and 7% in Saudi Arabia, 35% and 7% in Qatar, while Kuwait is expected post growth of 25% and 12%, respectively, supported by the growth in oil GDP.
Read More

Excerpt from Citibank report:

In October this year, $16.9bn of projects were awarded across MENA. On a cumulative basis, just over $82bn of projects have been awarded across the region in the year to end October. This compares favourably with FY10 when almost $80bn of projects were awarded. Saudi Arabia is the main driving force accounting for a third of the 2011 total. Iraq accounts for 20%.The UAE has awarded almost $14bn in the year to end October, almost $20bn below FY10.
Read More

By Alon Ben-Meir

Due to a host of common denominators in the Arab world including the lack of traditional liberalism, the tribes’ power, the elites’ control of business, the hold on power by ethnic minorities, the military that cling to power, and the religious divide and Islamic extremism, the Arab Spring could sadly turn into a long and cruel winter. These factors are making the transformation into a more reformist governance, slow, filled with hurdles and punctuated with intense bloodshed. At the same time, each Arab country differs characteristically from one another on other dimensions including: history and culture, demographic composition, the role of the military, resources, and geostrategic situations. This combination of commonality and uniqueness has had, and will continue to have, significant impacts on how the uprising in each Arab country evolves and what kind of political order might eventually emerge.

Read More

By Rushdi Siddiqui, Global Head of Islamic Finance at Thomson Reuters

The time has arrived to take a deeper dive on better understanding of Shariah compliant companies in an Islamic (or Shariah compliant) equity indexes. To many informed and uninformed observers of Islamic equity investing, it seems to imply investing in publicly listed companies in Muslim countries.

The end results contradict the assumptions. This also rebuts the often heard allegations by many from the anti-Shariah movement that Islamic investing is about investing in companies linked to terrorism or financing terrorism. The largest companies in the S&P Global BMI Shariah include ExxonMobil, IBM, Chevron, Nestle, Microsoft, etc.
Read More

• 25 Rapid Growth Markets (RGMs) to grow by an average of 6.2% this year and by 5.9% in 2012, compared with 1.6% growth for the Eurozone this year falling to 0.6% next year.

• Qatar had the highest nominal GDP (US$) per capita at PPP in 2010 among the 25 RGMs and has also been the fastest growing economy over the last decade, with an average growth of 13%.

The dynamics of the global economy have changed with a new set of fast-growing markets challenging the position of the established advanced economies. The rapid growth markets (RGMs) are expected to grow collectively by 6.2% this year, almost four times more than the anemic growth expected in the Eurozone according to Ernst & Young’s new quarterly Rapid Growth Markets Forecast (RGMF).
Read More

By Alon Ben-Meir

The Arab Spring is changing the political and strategic map of the Middle East as we know it in ways that will persist for decades to come. Notwithstanding the domestic developments in each country, the Arab Spring is uprooting long-standing authoritarian regimes, antagonists and protagonists to the West alike, and is creating a vacuum that regional powers will quickly attempt to fill. Each of the regional powers in the Middle East - Egypt, Saudi Arabia, Turkey, Iran, and Israel - are poised to exploit the uprising to their advantage. New regional alliances could emerge, as could a new “cold war” and the potential of violence between the competing powers. What is certain now, however, is that the Syrian upheaval thrusts Turkey and Iran into a collision course because they have opposing geostrategic interests that neither of them can afford to ignore.

Read More

whsaito /Foter

Muscat-based United Securities has turned cautiously optimistic on the recent developments by global markets to contain the debt crises and on the back of better than expectation Q3 results in some market sectors.
Read More

Standard & Poor’s Ratings Services said today that issuers in the Gulf Cooperation Council (GCC) countries face rising refinancing risks over the next three years because the amount of debt maturing in the region will increase significantly between 2012-2014.

Industry experts estimate bonds and sukuk of about $25 billion will mature in 2012, rising to about $35 billion in 2014. Standard & Poor’s believes the region is therefore entering a challenging loan and bond refinancing cycle, especially given the ongoing volatility in capital markets and fears that slowing global economic growth is already curbing corporate debt issuance and heightening refinancing risk in the region.
Read More

Saudi King Abdullah Bin Abdulaziz is the sixth most powerful Arab in the world, according to Forbes list of 70 Most Powerful People. Who else from the MidEast World made the list? And who else should have been. READ MORE HERE

While the new Saudi nationalisation programme has great merits, the state’s coddling of public sector employees means the private sector is finding it hard to attract the local workforce. READ MORE HERE

The Arab Petroleum Investment Corporation (Apicorp) expects MENA energy capital investment to reach $525-billion over the next five years.

But the Dammam-based lender estimates that the figure is at least $90-billion short of the ‘investment potential’. The company examined nearly 200 energy projects planned and announced in the public and private sectors. READ MORE HERE

The UAE which is more aligned than other regional states to global economic cycles, saw its PMI fall from 57.5 in April to 51.0 in July, suggesting that that any further deterioration in global economies will be felt more in the UAE compared to other Gulf states, says Deutsche Bank. READ MORE HERE

With the ongoing rebound in economic activity, a question that emerges is whether inflation will increase again as it did in 2007–08 when the annual increase in consumer prices peaked at 11.1 percent in July 2008. Many of the drivers of inflation then are also present now, including higher food prices, depreciation of the nominal effective exchange rate, expansion of credit, and rising government spending.
Read More

Could the Arab Spring have been predicted? More significant, could we have predicted that Saudi Arabia will remain stable throughout the turmoil? Or even where Bin Laden was hiding? New data mining techniques suggest we can. READ MORE HERE

Qatar leaves regional competitors in the dust, rising as one of the most competitive economy in the world. But Arab Spring unkind to competitiveness of liberated Egyptian and Tunisian economies.

Another survey, another glowing review of Qatar. The World Economic Forum’s Global Competitiveness Index 2011-12 finds the gas-rich state the region’s most competitive and emerging as the 14^th most business-friendly country in the world. READ MORE HERE

Gulf states have pledged $150-billion in response to the regional unrest, according to Bank of America Merrill Lynch estimates. But it may not be enough. READ MORE HERE

Saudi Arabia is not immune to the debt crisis in the European Union.

“A default that involved Spain and Italy would almost certainly lead to a seizing up of eurozone — and quite possibly global — interbank markets,” says Saudi-based Samba bank.

“Even if the financial shock was confined to the zone itself, European demand for raw materials and manufactured products (mainly from emerging markets) and services (mainly from North America) would shrink dramatically and this would be enough to imperil the global economic recovery.”
Read More

Saudi Arabia’s housing sector is only just warming up but the profits of listed Saudi companies show the sector’s immense potential. If only the authorities would pass the mortgage law.

Profits of Saudi property managers listed on the Tadawul index rose 30% year-on-year and quarter-on-quarter. Income rose SR465-million in the second quarter, compared to SR347million during the same period last year, buoyed by a surge in real estate loans in the past three quarters, rising 20 to 30% year-on-year. READ MORE HERE

It was an unlikely public display of affection. Close to 2,000 Syrian expatriates gathered on the streets of Jeddah, carrying Saudi flags and pictures of the Saudi King to thank him for criticising Syrian President Bashar Al Assad and demanding an end to his wretched violence against his own people.

In an unusually frank criticism, the King demanded that Al-Assad end the violence against his own people, breaking the silence in the Arab World over one of the biggest atrocities being committed within the region.

But, “as a number of Saudi youths started joining the gathering [of Syrian expatriates], police intervened and dispersed the people peacefully,” reported Arab News. READ MORE HERE

As the global economy lurches from one crisis to the next, we look at the prospects for the regional economies in troubling global conditions which could slash domestic growth.

Another quarter, another headache. Gulf governments have suffered a tumultuous first two quarters of the year and were hoping for some semblance of sanity in the third quarter. At the very least, regional governments were hoping that tragic developments within the Middle East had remained isolated - Syria, Yemen and Libya - leaving other countries in relative safety and peace.
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At the Joint High Level Conference on Islamic Finance in Jakarta, Indonesia, co- organized by Bank Negara Malaysia and Bank Indonesia, the question I wanted to address was:

Does Islamic Finance have A.I.R. (Authenticity, Innovation & Reach) or is it just hot air?
Read More

Forget Arab Spring. If Saudi Arabia’s spending patterns and economic policies don’t change, it could be staring at a breakeven oil price of an astonishing $320 a barrel by 2030, says Jadwa.

With $562-billion in net foreign asset, the second largest oil reserves in the world after Venezuela (according to the latest Opec bulletin), and the second largest oil output in the world after Russia - Saudi Arabia’s future looks rosy and solid. READ MORE HERE

After riding on the crest of high oil prices earlier in the years, Saudi economy appears to be cooling off during the hot summer months. The initial euphoria surrounding the domestic stimulus initiated by the government has given way to concerns over global economic growth, and consequently oil prices.

Still, businesses and consumers are comforted that the government will continue to pump tranches of the announced $130-billion stimulus package over time and the trickle-down effect it will have on the rest of the economy will encourage growth.

However, this ebullient mood could be dampened if oil prices fall further and regional turmoil escalates or new flashpoints emerge. READ FULL STORY

The Arab World’s tryst with democracy and freedom is unlikely to bear economic fruits, according to a study. Instead, we could well see a gridlock political environment and economic growth that continues to lag global averages.

The Economist Intelligence Unit (EIU) insightful study on how the Arab Spring initiative is likely to play out, suggests a 60% probability of a gridlocked political environment that is unlikely to result in realizing the aspirations of the region’s citizens. READ MORE HERE

Even as the Egyptian Government looks to revive the country’s economy, it has turned down the International Monetary Fund (IMF)’s stand-by agreement. A bold move no doubt, but was it a populist decision or purely a financial one? And if the Egyptian Government’s decision to turn down the IMF a move to spurn Mubarak-praising entities, why is it borrowing from the Gulf?

Egypt’s decision to turn down International Monetary Fund (IMF) and the World Bank is a bold move, given that the country’s fiscal situation remains fragile. READ MORE HERE

HSBC’s forecast for the region’s three largest economies reveals its continued concerns for Saudi Arabia and Egypt, while it believes UAE’s status as a safe haven is revived.

HSBC expects Egypt’s GDP to rise a mere 0.2% in 2011, a far cry from the robust 5.1% growth in 2010. To be fair, a lot has changed in the country since the end of 2010. READ MORE HERE

As investors say goodbye to the first half of the year and brace themselves for a strange and uncertain world in the second half, the worry beads are already out.Global economies have stuttered, faced natural disaster of epic proportions, seen political upheavals that nobody could have forecasted and have seen new and old worries surface and resurface.Yet markets have remained resilient for the most part, commodity-driven economies have prospered and emerging economies are still managing to expand and grow.Here is a look at what is keeping investors awake at night and some bright spots in an increasingly uncertain world. READ MORE HERE