The future of Islamic finance
The Prime Minister articulated his dream that London should grow into the most inclusive capital in the world and a centre for Islamic finance in the West. London, he said, was a perfect choice for the 9th WIEF given the city’s history as a financial centre.
“I want London to stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world. Now I know that words and ambitions are all well and good. But what we need is the leadership to make that a reality.”
The United Kingdom’s longstanding commitment to openness, he added, has been the result of a constant preparedness for change and evolution, allowing all to embrace new investments and new ways of doing business. Even now the metropolis is continuing to innovate and will launch the world’s measure their financial as well as social returns.
For Mr Cameron, however, the choice of London as an international Islamic financial service provider has much wider implications: the city provides access to Glasgow; 25,000 in Leeds, Manchester and Birmingham; and almost 35,000 in Edinburgh; in turn establishing a strong nationwide backbone on which investors can depend.
The Prime Minister said that the United Kingdom possesses a wealth of human resources including a concentration of intellectual capital and some of the finest tertiary education institutions in the world. It also has language and professional service and North America, a long-standing commitment to construction and manufacturing.
Mr Cameron stressed that the UK’s evolution is constantly progressing, and Her Majesty’s Government intends to take specific actions to aid this process. This includes the reduction of corporate tax to 20 percent (the lowest in the G7 grouping), slashing the time it took to start a new business, and streamlining legislation with a view to minimising bureaucracy.
Indeed, he estimated that UK businesses have already saved £1 billion as a result of these initiatives, and Ernst and Young has named the country “the best place in the world for new entrepreneurs” with its improved access to credit, investment and property.
Besides supporting investment in major regional infrastructure (such as the Crossrail scheme), the UK also remains firmly dedicated to growing its expertise in Islamic financial services. Today, UK are Shariah-compliant than anywhere else in the West, and there are 25 legal firms and 16 universities with specialisations in Islamic finance.
Moreover, Her Majesty’s Government has removed double taxation on Islamic mortgages and extended tax relief on them for companies as well as individuals. It has also taken steps to ensure that no Muslim in Britain would be excluded from access to student loans or start-up business financing on the grounds of religion.
The Prime Minister acknowledge that other countries are taking “a different approach” and that their instincts “sometimes incline towards pulling up the drawbridge” but this, he said, was a mistake the United Kingdom would not make.
The world was changing and the UK must be ready to transform into a first-class destination for trade and investment at a time when Islamic finance was growing 50 percent faster than conventional banking. While Muslim investors have already made key investments in the UK – such as The Shard, Battersea Power Station, and the Arsenal and Manchester City football clubs – the country cannot rest on its laurels.
Mr Cameron said that three important steps were required for the United Kingdom to achieve its full potential: it must be the first sovereign country outside the Muslim World to issue an Islamic bond – and would in fact do so in 2015 with a £200 million sukuk. Secondly, the London Stock Exchange Group plans to identify more business activities that were Shariah-compliant while remaining focused on greater transparency for investors. In this connection, the Group intends to utilise the most advanced techniques available to create a new Islamic Market Index.
Finally, the United Kingdom has been taking proactive measures to support business growth directly within the Islamic World and has partnered with the Shell Foundation to establish a £4.5 million grant programme to enhance skills and finance small businesses in the Middle East and the Gulf. Furthermore, he said, 10 new Chevening Scholarships have been created in the field of Islamic finance for 2014-2015 and the United Kingdom has been working with the Islamic Development Bank to support greater participation of Arab women in business.
Mr Cameron also congratulated his Malaysian counterpart, Dato’ Sri Najib Tun Abdul Razak, for the latter’s pioneering work in establishing the Global Movement of Moderates to unite and inspire all those around the world who were opposed the extremism.