(MENAFN- Gulf Times) Busy preparations are underway for the third "Global Islamic Economy Summit" to be held next week, on October 5 and 6, in Dubai. The event, which takes a new universal position towards the global Islamic economy, this year looks not just at economic indicators, but at the Islamic Economy as a way of living through products, experiences, services, processes and relationships that are halal, or, differently said, ethical, wholesome and family-friendly.
But the economic indicators nevertheless remain impressive. The whole size of the global Islamic market, including Islamic finance, reached a combined value of consumer spending and financial assets of around $3.6tn in 2013, according to data provided by the "State of the Global Islamic Economy 2014-2015" report by Thomson Reuters, co-organiser of the event. Of this, around $2tn are stemming from halal food, halal travel, halal fashion, media and recreation, as well as pharmaceuticals and cosmetics, and $1.66tn are Islamic finance assets.
For the Muslim consumer market (ex-finance), Thomson Reuters predicts that global expenditure will reach $3.7tn by 2019 at a compound annual growth rate of 10.8%. If we anticipate further growth rates in the Islamic finance sector of around 15% a year, then Islamic finance assets should accumulate to around $3.5tn by 2019. Assuming a relatively smooth average growth in all sectors, the size of the entire Islamic economy can be projected to reach an estimated $7.2tn by 2019, with Islamic finance remaining the strongest singular pillar.
"Islamic finance is the fuel that drives the Islamic economy. It is common to the various sectors that make up the Islamic economy. So, it is central to everything that falls under the Islamic economy umbrella," Hussain al-Qemzi, CEO of Noor Bank, who will be a keynote speaker at the event, told Gulf Times.
"Without Islamic finance, the Islamic economy would not exist. How can anything be considered halal, whether it is food or pharmaceuticals, family-friendly tourism or cosmetics, if it is the product of conventional finance investment?" he added.
Islamic finance is currently also considered the most developed sector within the Islamic economy. The global number of Islamic financial institutions, including banks, takaful providers and investment and financing firms, has already exceeded 1,500. Global acceptance of Islamic finance is growing, as is competition between Islamic finance and conventional finance. Larger Islamic banks are driving the industry by developing new Islamic banking products that add value to existing offerings, which, in turn, accelerates the transition to Islamic banking, particularly of non-Islamic entities discovering, for example, products such as sukuk as viable alternatives to conventional bonds.
Apart from Islamic finance, key opportunities can also be found in the other sectors.
"With impressive growth figures predicted over the next years, diverse sectors within the halal lifestyle market are asserting themselves in the global economy, boosted by Muslim consumer buying power," said Nadim Najjar, managing director of Thomson Reuters Middle East and North Africa.
In the halal food industry, investment opportunities are seen across the entire value chain, from raw materials to production and logistics, wholesale, retail and branding. In halal travel, family and business travel stand in the focus, as well as the luxury Muslim travel market and hospitality investments in general. In halal fashion, key opportunities include e-commerce platforms, retail outlets, fashion branding, franchising and distribution partnerships especially for the Western Muslim market as the largest segment by value. The Muslim media and recreation sector entails growing segments such as lifestyle marketing, digital advertising, gaming, social media and global halal branding. And in the pharmaceuticals and cosmetics sector, there is huge inherent potential for products such as halal vaccines, ingredients manufacturing, as well as retail and wholesale partnerships.
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