halalfocus.net » Finance & Investment

Pakistan is emerging as a global leader of Islamic Microfinance

salama — Wed, 01 Feb 2012 11:07:49 +0000

Pakistan is emerging as a global leader of Islamic Microfinance: Zubair Mughal

UN-Millennium Development Goal (MDGs) can be achieved by eliminating Poverty through Islamic Microfinance:

01-02-2012

(Istanbul) A two day International summit on Islamic Microfinance has started in Istanbul. The basic purpose behind this summit is to promote Islamic Microfinance and to elucidate the strategy to remove obstacles from its way to progress. Microfinance experts from different continents like Africa, Asia, Europe and America etc. are participating in this Int’l summit. While speaking to the opening session of the Summit, Muhammad Zubair Mughal, Chief Executive Officer, AlHuda Centre of Islamic Banking and Economics said that Pakistan has been acknowledged as a leader of Islamic Microfinance Industry and right now in Pakistan; more than 20 institutions are providing microfinance services. While highlighting the importance of Islamic microfinance, he said that around the world, conventional Microfinance has badly failed and its examples can be clearly seen in India and Latin America. He further added that due to the failure of conventional financial system, many countries in the world are adapting Islamic microfinance system for poverty alleviation through which not only poverty will be eradicated but also a sustained economy shall come into being in these countries.

While addressing to the International Summit, he further added that one reason behind expansion of Poverty is interest base mechanism in Muslim countries, People do not use Financial and Banking system due to interest as it is strictly prohibited in Islam hence forced to live in poverty whereas through Islamic Microfinance by using the financial products based on Shari’ah principles, we can get the people out from poverty. He further highlighted the need assessment of Islamic microfinance in Muslim Countries by saying that 44% of conventional Microfinance clients live in Muslim Countries and United Nations has added half of the countries of Islamic Development Bank in the list of least developed countries which shows that Islamic Microfinance can be used to eradicate poverty from Muslim-Majority Counties. While identifying the Muslim population and poverty in different regions of the world, he said that 85.5% in East Asia, 34% in South Asia, 58% in West Africa, 58% in Caucasus and 97.3% in MENA are Muslims and collectively, in 2.4 Billion population of these regions, Muslims are of 48.3% which clearly shows the need of Islamic Microfinance for poverty alleviation in these countries. He further added that not only Muslims but Non-Muslims can also get benefits from Islamic Microfinance because Islamic Microfinance is not a religion but a system which is equally useful for Muslims and Non Muslims as well and the clear example of this fact is that Non-Muslims consider it very attractive.

He said that Islamic Microfinance is essential to achieve Millennium Development Goals( MDGs), proposed by United Nations for alleviating poverty and social uplifting. He further added that if development of Islamic Microfinance starts right from today, these goals can easily be achieved till 2015. He said that Islamic Microfinance sector is facing difficulties due to apathy of Donors and to fulfill this deficiency, Sukuk (Islamic Bonds) can be issued. He further said that more financial products can be introduced by enhancing research in the field of Islamic microfinance and there are many opportunities for development in this field. AlHuda Centre of Islamic Banking and Economics has established a specific Microfinance help desk so that trainings, research and technical consultation could be provided to Microfinance Institutions worldwide.

In this Summit, the role of Pakistan in the development of Islamic Microfinance has very much appreciated and Pakistan is considered to be as global leader of Islamic Microfinance Industry. This conference will continue for 2 days in Istanbul.

USA: OSK-UOB Islamic Fund Management signs with IdealRatings as their Shariah screening provider

salama — Tue, 17 Jan 2012 22:53:45 +0000

San Francisco, USA – Kuala Lumpur, Malaysia January 16th, 2012 – OSK-UOB Islamic Fund Management, a joint-venture company formed between the OSK Group, one of Malaysia’s leading investment bank and Singapore’s UOB Group, one of Asia’s leading financial institutions, announced today that it has signed a strategic agreement with IdealRatings, Inc. a global Shariah compliant fund management service provider to utilize IdealRatings’ unique research based screening for their global growth strategy of equity funds.

According to Mohamed Noor, CEO, OSK-UOB Islamic Fund Management, OSK-UOB Islamic Fund Management was looking to find a partner who could provide detailed analysis of the revenue breakdown for the global stock market specifically for food companies involved in any non-halal elements. “IdealRatings, did an outstanding job screening companies with their one of a kind research methodology along with their comprehensive Shariah fund management solution. We feel confident relying on IdealRatings to provide us with top quality Shariah screening data for our Global Halal Food Fund and also for the other unique funds we will be offering as part of our portfolio in the future” said Mohamed Noor.

“The team at OSK-UOB Islamic Fund Management has great plans for much needed products in the market. We are proud to help such team with our service to develop successful products to meet the market demands in a high growth market” said Mohamed Donia, CEO of IdealRatings.

Opinion: Is Islamic Finance ready for more standardisation?

salama — Mon, 02 Jan 2012 16:28:28 +0000

AMEinfo.com

When bankers from East and West gathered in Manama at the 18th Annual World Islamic Banking Conference in November 2011, one topic was prevalent at nearly all discussion rounds: standardization.

But while Islamic Finance is expanding to new frontiers such as Uganda, France, Egypt, South Korea and Oman, the objective to make Shariah-compliant financial products more standardized appears more and more like a far-fetched daydream.

Let’s take France, with its legal environment based on the Napoleonic Code civil. The French jurisdiction differs greatly from British Common law or Case law, the predominant legal framework in England, the centre of Islamic finance in Europe. How shall a financial solution, let’s say an Islamic trade financing based on Murabaha, be used by a London-residing bank if it was legalized in France? Calls for more standardization overlook the individual nature of national jurisdictions, which still exist even in the 27-member states European Union.

The Common law is also used in the Dubai International Financial Center (DIFC), one of the major Islamic banking hubs in the Middle East, while the jurisdiction in the UAE is based on a mix of the French Code Civil and Islamic law. “Both legal environments differ too much from each other,” says Houram Houssani, Partner at the GCC’s largest law firm Al Tamimi & Co. in Dubai. “This is why we think the DIFC will, legally, continue to exist as a state in the state within the UAE.”

At the same time, Qatar has implemented a strict separation between Islamic and conventional banking, banning Islamic windows at all conventional lenders in the country, a first in the industry.

Divergent views on Islamic Finance’s future

Anecdotal evidence also shows that the leading market participants do not agree at all in the direction Islamic Finance shall take, as AMEinfo.com has learned when from interviewing experts at conferences. One Islamic Finance consultant based in Dubai blames some banks for not operating in an Islamic way at all but “running a Shariah-bank with a conventional window”. Other professionals are outraged that some financial firms try to develop Islamic derivatives or even Islamic hedge funds despite the fact that Shariah bans interest, short-selling and speculation.

In some cases, rules set by the Islamic Financial Services Board (IFSB), one of the most accepted international standard setting organizations, are even stricter than the guidelines for the conventional world. According to Rohit Verma, product management director at Oracle Financial Services, the IFSB “has stricter capital requirements than those proposed in Basel III, with tier 1 and total capital requirements currently standing at 8% and 12% respectively. The minimum common equity requirements for Basel III are set at 4.5% and total capital requirements have been set at 8% with a 2.5% buffer,” Verma writes in an article published in New Horizon (Issue October – December 2012). Although Basel III does not distinguish between conventional and Islamic banks, the rules are primarily set for the conventional world, as the Shariah finance universe stands for 1% of the global economy.

“Focus on a few things, not many things,” is a favourite piece of advice from legendary investor Warren Buffet. Maybe it is time for Islamic finance to focus on its strengths, namely to provide a non-conventional, non-interest ethical way of banking and investing rather than trying to put the whole industry under one hat, labelled “standardization”, a task which seems to be “Mission: Impossible” as more participants enter the scene.

Malaysia: Malay Chamber to facilitate QSR stake buy

salama — Thu, 29 Dec 2011 16:00:30 +0000

Business Times

The Malay Chamber of Commerce Malaysia (DPMM) has offered to facilitate, on behalf of the Tabung Haji Board, Amanah Saham Mara Bhd and Felda, the purchase of Kulim Bhd’s interest in QSR Brands Bhd worth over RM1 billion.

DPMM chairman Syed Ali Al Attas said the chamber’s move would prevent QSR becoming a private company if it is taken over by Johor Corp Bhd (JCorp).

JCorp now owns 53 per cent of Kulim, which has a 57.5 per cent stake in QSR, which in turn owns 50.6 per cent of KFC Holdings (Malaysia) Bhd (KFCH).

Syed Ali said invitation letters to the three entities will be sent today and their decisions are expected to be known tomorrow.

DPMM, he said, hopes Tabung Haji will not sell its 23 per cent stake in KFCH as this would affect the development of the halal industry.

“It would also contradict the government’s wish to see the participation of Malays and locals in the halal business,” he told a media conference in Kuala Lumpur today.

He also expressed concern that such a buyout would deny business opportunities for existing local entrepreneurs.

Syed Ali added DPMM would discuss with the three entities on the chamber’s offer of RM6.90 per QSR share compared to the RM6.80 offered by JCorp, adding he does not rule out the possibility of DPMM owning a stake in QSR.

On Dec 14, JCorp offered, through Massive Equity Sdn Bhd (MESB), to acquire 100 per cent of the businesses and undertakings of KFCH and QSR, including substantially all their assets and liabilities.

MESB is a special vehicle jointly owned by JCorp (51 per cent) and private equity fund CVC Capital Partners Asia Pacific (49 per cent).

Seven days later, the Boards of KFCH and QSR accepted the takeover offer and said categorically that they do not intend to seek any alternative bids. — BERNAMA

New Zealand: $3 trillion industry challenges New Zealand firms

salama — Wed, 28 Dec 2011 08:53:56 +0000

By Indian Newslink

The New Zealand Trade and Enterprise (NZTE) has identified Halal as an emerging global trend that holds great promise particularly for New Zealand’s food and beverage as well as cosmetics and beauty products.

NZTE recommends companies stay up to date with this rapidly changing global market said to be worth $2.95 trillion. Food products comprise 61% pharmaceutical products 26% and cosmetics 11%.

At the World Halal Forum held in Kuala Lumpur in 2011, there was a strong emphasis on the convergence of the Halal goods and services industry and the Islamic finance into an integrated Halal economy.

The potential Muslim market is huge and growing.

Islam is the second largest religion worldwide, with 1.57 billion followers or 23% of the global population. Many of the world’s Muslims live in rapidly growing emerging markets such as Indonesia and India.

Halal Certification

There is no international consensus on Halal standards and certification.

The International Halal Integrity Alliance (IHIA) was set up in 2007 to work with industry, governments, research institutions and other organisations to develop an internationally recognised standard.

Ten modules that make up the standard are under various stages of development including topics such as food service, logistics, animal welfare and animal slaughter and processing.

Once the standard is complete, the IHIA will seek endorsement by the Organisation of Islamic States.

Discussions are still underway to get this standard approved.

In the meantime, supervision of Halal Certification is often carried out by religious bodies in each market and represents that country’s individual expression of Islamic beliefs.

As such, getting agreement between countries on a global Halal standard has been very difficult.

In New Zealand, the New Zealand Ministry of Agriculture and Forestry (MAF) has oversight of companies exporting Halal meat products.

New legislation

In November last year, the Ministry released the ‘Animal Products (Overseas Market Access Requirements for Halal Assurance) Amendment Notice 2010.

MAF also certifies approved Halal organisations in New Zealand who offer assessment, approval and certification services, with the approval of the importing country.

New Zealand and Malaysia signed a new Halal meat arrangement in December 2010 negotiated between MAF (formerly the NZ Food Safety Authority) and Malaysia’s Department of Veterinary Services (DVS) and Malaysia’s Department of Islamic Development (JAKIM).

This provides a framework to reconcile Malaysia’s Halal laws with New Zealand’s animal welfare requirements, including that all Halal meat products in New Zealand are derived from animals stunned prior to slaughter.

A unified Halal standard across the Gulf Cooperation Council (GCC) comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates may be eventually developed.

Halal finance

Another opportunity for New Zealand companies in the Middle East is the growth in Islamic finance.

The Islamic finance market currently accounts for only 1% of total global financial market, but is growing at 15% per year.

Islamic funding is also a major source of investment across the Muslim world.

Islamic banks from the Middle East are expanding their operations to Malaysia and Singapore. HSBC also offers Sharia compliant products, as does Lloyds TSB in Britain. France, Luxembourg and the UK have passed laws to ensure tax neutrality for Islamic finance.

The recent global financial crisis has increased interest in Islamic finance though there have also been calls to ‘demystify it’ and to emphasis its links with other forms of alternative finance.

The Challenges

NZTE believes there are challenges for New Zealand companies wanting to participate in Halal markets including

1. Uncertainty whether the concept can reach beyond religious and racial boundaries and become a mainstream trend

2. The lack of a globally-recognised Halal standard, resulting in higher operational costs and tedious certification processes

3. The market potential still limited to Muslims because Halal certification is not a meaningful standard for non-Muslims

4. The purchasing power of Muslims in markets like Europe is still relatively low combined with their preference to buy low-cost bulk foods

5. Marketing of Halal products can be challenging and costly due to various schools of thoughts within Islam. Non-Muslim sensitivities must be considered if the product is meant for a wider market.

Source: New Zealand Trade & Enterprise

USA: Export Requirements for United Arab Emirates

salama — Sat, 17 Dec 2011 11:57:44 +0000

Asterisks (*) indicate the most recent revision to these requirements. To search, click on your browser’s “Edit” menu, then click on “Find (on this page)”. Enter “*” in the “Find What” field, then click “Find” or “Find Next” until all asterisks have been identified.

Eligible/Ineligible Products

Eligible Products
1. Fresh/frozen meat and meat products.
  1. Beef and beef products shipped on or after July 17, 2009 must be derived from animals less than 30 months of age produced under an approved AMS Export Verification (EV) program. Information about the EV program for United Arab Emirates and a list of EV approved establishments can be obtained from AMS’ Web site.
    To export beef and beef products to the United Arab Emirates, the applicant must request, from AMS’ ARC Branch, a Statement of Verification (SOV) for each shipment. For more information on obtaining a SOV, access the Export Verification (EV) Programs Additional Requirements page from AMS’ Web site. The unique product identification system can be accessed by authorized FSIS inspection personnel from FSIS’ Intranet site.
    
    If FSIS inspection personnel become aware of concerns that an AMS approved EV establishment is not properly executing its EV program, export certification should not be issued for the product in question and AMS should be notified at ARCBranch@usda.gov. Inspection personnel should include their immediate supervisor on messages to AMS. The following information should be included in the message:
    - Establishment name, address, and establishment number
    - Product type, product code, and quantity of product
    - Date of production, lot number, and shift
    - Date and nature of observation
    - Name of country product is intended for export
    - Export certificate number (if applicable)
    - Any other information to verify claim
    - Name of inspection official
    Samples intended for the annual Gulfood Show are not subject to the EV program. “Samples for display at the Gulfood Show” should be indicated on the product cartons and in the Remarks section of FSIS 9060-5.
  2. Veal and veal products are not subject to the EV program.
  3. Pork and pork products. Halal certification is not required for pork and pork products. However, general labeling requirements, including production and expiration dates, apply (see Labeling Requirements below).
2. Fresh/frozen poultry and poultry products.
Slaughter Requirements

Ritual: Islamic Halal Slaughter requirements apply.

Labeling Requirements
1. All products – Storage temperature must be placed with the refrigeration statement on the label to fully clarify the type of product being handled. (Example: “Keep frozen – store at or below ___ degree C; Keep chilled (or refrigerated) – store between ___ degree C and ____ degree C. ”
2. Fresh/frozen meat and poultry. In addition to the labeling features mandatory in the United States, precut and packaged meat and poultry must include the following features (in print):
  1. Production (slaughtering or freezing) and expiration dates.
    1. Date format requirements for UAE must conform to the following: Day/Month/Year for products with a shelf life of three (3) months or less and Month/Year for products with a shelf life of more than three (3) months.
    2. The expiration date must be calculated from the date the product was frozen.*
    3. Exception: The UAE permits expiration dates on bagged poultry to be printed on adhesive tape wrapped around metal clip area.
  2. Statement that product has been slaughtered according to Islamic principles. (Note: The UAE does not require reference to Islamic slaughter on consumer packages, but exporters should be aware that such product would have limited distribution.)
  3. Shelf life of Product. Shelf life limits have been determined for chilled vacuum packaged meat, and fresh and chilled other meat/poultry products. Fast spoiling foods with a shelf-life not exceeding 3 months must have complete date stated on the label (day/month/year).*
  4. Country of origin.
  5. Metric net weight labeling is required.
  6. Alcoholic materials and species of animal fats, gelatin, food additives and blood must be declared on label when product contains such materials.
3. The following methods of labeling are alternatives to meeting the requirements for labeling packaged fresh/frozen meat and poultry:
  1. Arabic sticker may be used but must not obliterate label terminology and be self-destructive on removal. Stick-on labels covering required label features are not permitted.*
  2. Inserts, if used, must be accompanied by production and expiration dates. Inserts must be made of approved materials.
4. Canned Goods – Expiration and production dates must be preprinted on the labels or on the bottom of the cans.
Documentation Requirements
1. Obtain FSIS Form 9060-5. All FSIS Form 9060-5 certificates must be dated and have the signature and title of an FSIS veterinarian.
  For all poultry and poultry products, the following statement must be included in the Remarks section of FSIS 9060-5: “There have been no outbreaks of highly pathogenic avian influenza (H5N1 subtype) involving commercial poultry in the zone of origin in the 3 months prior to slaughter.”
2. Ritual Slaughter – Islamic Slaughter Certification, in addition to FSIS certification, is required. The exporter must obtain a Certificate of Islamic (Halal) Slaughter from a member of an Islamic Center or Islamic organization. A certificate of Islamic Slaughter is a certificate issued by a member of a Moslem organization recognized by the importing country to provide this service; the certificate states that animals were slaughtered according to Moslem religious requirements. The certificate must accompany products labeled “Halal.” The certificate must be endorsed by the United Arab Emirates Embassy or Consulate. The contact information for accredited Islamic Centers and Islamic Organizations is listed below.*
3. Halal certification will be requird for the following products:*
  1. On fresh/frozen unprocessed product, Halal label claims must be accompanied by an appropriate Halal certificate or a written assurance from the exporter that an appropriate Halal certificate will be supplied to accompany that shipment before it reaches its destination.
  2. On processed products with Halal label claims, raw materials used must be accompanied by an appropriate Halal certificate.
  3. For cooked poultry and cooked poultry products, the export certificate must state that the product has been heated to 72° C.
Handling/Storage Requirements
1. The United Arab Emirates requires that instructions for consumers concerning storage, preparation and other special handling requirements accompany all shipments. These instructions should be addressed to the UAE Municipality.
Other Requirements
1. Expiration Period
  1. The United Arab Emirates, as per revised and updated Gulf Standard 150/2007 for Shelf Life Standard, recommends 12 months shelf life for frozen meat and poultry.*
  2. Chilled vacuum-packed meat/poultry has an expiration period of 3 months.
  3. The shelf-life (expiration period) for other meat/poultry is defined by the product. Please consult the importer for the recommended shelf life of product ordered.
Plants Eligible to Export

All Federally inspected establishments are eligible to export to the UAE. However, beef products must originate from AMS EV approved establishments. If products are to be labeled “HALAL”, the plant must be able to accommodate the Islamic requirements.

Approved Islamic Halal Certifiers in the U.S.

The following U.S.-based Islamic organizations have been approved as Halal certifiers for exports of meat and foods containing meat and animal products to the United Arab Emirates. The UAE typically requires foreign certifiers to undergo a visit by UAE authorities and a review of certification procedures and staffing as part of the approval process. All U.S.-based Islamic Halal certifiers listed below are approved by the UAE for nationwide certification.
1. Halal Transactions of Omaha
  P.O. Box 4546
  Omaha, NE 68104 USA
  Tel: (402) 572-6120
  Cell: (402) 659 8191
  Fax: (402) 572-4020
  E-mail: halal2eat@hotmail.com
  Rep: Dr. Ahmed Al-Absy, President
2. Islamic Services of America
  P.O. Box 521
  Cedar Rapids, IA 52406 USA
  Tel: (319) 362-0480
  Fax: (319) 366-4369
  E-mail: islamicservices@isaiowa.org
  Rep: Haj. Riad A. Jammal
3. International Institute of Islamic Thought
  500 Grove Street, VA 20170 USA
  Tel: (703) 471-1133
  Fax: (703) 471-3922
  E-mail: barzenji@iiit.org; iiit@iiit.org
  Contact: Dr. Jamal Barzinji, Vice President
4. Islamic Society of the Washington Area
  1712 Eye Street, N.W. # 602
  Washington, D.C. 20006
  Tel: 202/ 457-1910
  Fax: 301/ 384-2975
  E-mail: ICFHC@hotmail.com; icfhc@tmo.blackberry.neta
  Contact: Mr. Habib Ghanim
5. Islamic Food and Nutrition Council of America (IFANCA)
  5901 N. Cicero Ave.,
  Suite 309 Chicago, IL 60646
  HQ: 773-283-3708 (x-224)
  Research Ctr: 847 993 0034 (x-203)
  Fax: +1-773-283-3973
  E-mail: m.chaudry@ifanca.org
  Contact: Mr. Muhammad Chaudry
For assistance in locating the nearest UAE Consulate, contact:

The Embassy of the United Arab Emirates
1255 22nd Street, N.W., Suite 700
Washington, D.C. 20037
Ph: (202) 955-7999
Fax: (202) 337-7029

UA-28 (Dec 13, 2011)

Malaysia: UAE businesswomen look for opportunities especially in halal food industry

salama — Fri, 16 Dec 2011 11:04:18 +0000

By CECILIA KOK - Bursa Community

Simple rules and regulations, attractive tax incentives and a
welcoming environment are the qualities that businesswomen from the
United Arab Emirates (UAE) look for when exploring investment
opportunities in any country, including Malaysia.
In a media session at Power Ladies UAE-Malaysia Roundtable 2011 that
featured prominent women business leaders from the UAE, Raja Easa
Al-Gurg, Fatima Al-Jaber, Faiza Al-Sayed and Huda A. Al-Matroushi,
agreed that Malaysia did offer business opportunities that they were
looking to explore, especially in the halal food industry.
Raja Easa is the managing director of the Easa Saleh Al Gurg Group,
a conglomerate in the UAE involved in trading, manufacturing,
retailing, franchising and real estate. She is also president of the
Dubai Business Women Council, and has had business dealings in Malaysia
over the past 15 years.
Fatima is the chief operating officer of Al Jaber Group
and a prominent leader in the Gulf Cooperation Council construction
industry. She is also a founding member of the Abu Dhabi Business
Women’s Council and currently chairs the committee.

Women power: Raja Easa (centre) speaking during the Power Ladies UAE-Malaysia Roundtable 2011. With her are Faiza (left) and Fatima.
Faiza is part of the executive management team of the Al Fahim Group, heading the central procurement division. Huda is the vice-president, general services of GASCO, an operating company of the ADNOC Group and one of the largest and most complex gas processing and distribution companies in the world.
“Business
is business; everybody wants to cut costs, especially in the present
environment,” Raja Easa said, when asked whether businessmen or
businesswomen from the UAE would put the sense of “brotherhood” arising
from Malaysia having the same official religion in Islam as the UAE
ahead of the total cost of operating in Malaysia.
It is an
inevitable fact that as Malaysia transforms its economy to move up the
value chain and become a high-income nation, the total cost of operation
in the country for businesses could rise in tandem.
In that
sense, Raja Easa said as businesspeople, they would look at investing in
other countries that could offer them lower cost of operation.
The
success of Raja Easa, Fatima, Faiza and Huda underscored the capability
of women in the masculine world of business. They pointed out that
women in the UAE were clearly ahead of their peers in the Middle East in
terms of economic participation and entrepreneurship, and they
attributed this to favourable socio-economic factors, including
government policies, in the country.
“We have a well-developed
education system and comprehensive healthcare services,” said Fatima of
the country’s attributes that helped cultivate the success of women in
the UAE.
“In addition, our leaders always put women in front. Our
government has put in place policies and legislations that are very
supportive of women… so, we were never left at the back, and that gave
us the confidence to rise,” she added.
Raja Easa concurred,
saying, “If we have a positive attitude from our leaders, the people
will reciprocate with a positive attitude towards contributing back to
the land.”

UAE at 40: Beyond the Bubble of Dubai

salama — Wed, 14 Dec 2011 15:44:10 +0000

By: Yazan al-Saadi

The United Arab Emirates (UAE) is often associated with Dubai, billed as the financial and liberal capital of the Gulf. But behind this bright facade lies a shaky national identity, a rocky relationship with neighbouring Iran, and a long term political and less talked about military alliance with the US.

In preparation for the celebration of the 40th anniversary of the UAE’s founding on December 2, the current president and emir of Abu Dhabi, Sheikh Khalifa bin Zayed Al Nahyan ordered pay rises of up to 45 percent for all federal government employees and granted children of Emirati women married to foreigners theright to apply for citizenship, a move that is quite rare and seemingly progressive in the Gulf region.

On the other hand, during the same period five Emirati activists have been sentenced to three years in prison on charges of publicly insulting the country’s rulers and disrupting public order after a five-month-long trial, which included hunger strikes by the accused.

These two simple events in this month illustrate the contradictory nature of the country – on the surface, it presents a ‘modern’ liberal cosmopolitan face, while underneath, there exists a strict system of control against any demands for change.

Geopolitically, however, the UAE has a more coherent foreign policy. It has firmly aligned itself with the rest of the Gulf Cooperation Council (GCC) countries in working to contain the spread of the Arab Spring across their borders — particularly by sending forces to crush the Bahraini protests as part of the Peninsula Shield Force. It is also an unwavering ally of Western powers, taking stances that represent Western interests more than those of its neighbors in the region.

This theme of contradictory duality is at the forefront of the UAE’s identity struggle — domestically and in its foreign policy.

The radical change

From 1971 until the beginning of the 21st century, the UAE radically transformed from a small, mostly homogeneous, community to an international urban hub, where the non-native population dwarfed the number of locals by a magnitude of more than three. Profits from the development and export of oil allowed the country to rapidly urbanize and diversify. But by 2009 natural resource exports still accounted for 85 percent of the UAE’s economy.

Policies by the leadership, particularly in Dubai, allowed the country to link itself into the global financial market, becoming a major player beginning in the 1990s. Yet, the effect on the indigenous Emirate cultural identity has been hugely detrimental. The Dubai model of development and high-throttle globalization was both hailed and criticized for its impact on the country.

Sultan al-Qassemi, a renowned political commentator, noted this recently in an article for Al Arabiya. His concluding point underscores the duality that the country suffers from: “On the one hand, urbanization may turn out to be, as many fear, the fire that is slowly eating up Emirati culture, leaving many of us helpless to stop it and wondering what will be left to salvage. On the other hand, it may be the Emirati culture’s best chance of survival in a globalized world.”

Furthermore, going for globalization has established a socially paradoxical environment in the country. Culturally speaking, the UAE has moments of extreme conservatism and liberalism as it tries to reconcile between its role as a cosmopolitan hub and its own traditional identity. Sex and nudity, for example, are considered taboo, resulting in questionable censorship, yet sex tourism involving foreign women and directed at foreign businessmen is rife.

Due to its small population, the country has relied heavily on the importation of expatriate labor, which constitutes more than 90 percent of the work force. This relationship has been rife with abuse, mainly towards South Asians, as ethnic origin plays into forms of job and salary discrimination.

Construction workers, in particular, are subjected to severe abuse, as noted in a Human Rights Watch report in 2006. With the international spotlight on the country, the UAE did make some changes to its labor laws and allowed the formation of a few rudimentary unions; however, for most NGOs, the UAE is far from being a fair and free place for migrant workers.

The 2008 financial collapse hit the UAE hard, and ground zero of the earthquake was Dubai. Prior to this, Mohammed bin Rashid Al Maktoum was so confident of economic growth that he was quoted as saying that by 2015, Dubai will be “an Arab city of global significance, rivaling Cordoba and Baghdad.” Dubai World, a massive conglomerate linked to the ruling Al Maktoum family, that represented the pinnacle of the Dubai development model was at the center of the fallout.

The collapse of the financial market, and subsequently the real estate market, shattered the sheikhs’ dreams. When the dust settled, Abu Dhabi, which followed a more gradual form of development, bought off Dubai’s massive debt. Interestingly, one of Abu Dhabi’s first moves was to cap Dubai’s trade with Iran — the UAE’s biggest re-export partner accounting for 17 percent of the total re-export market.

The geopolitics of the UAE

Since its independence from the British, the UAE has had an intermittently rocky relationship with its neighbors.

During the mid-1950s, Abu Dhabi had territorial disputes with Oman over areas in the south of the emirate that were not settled until after the British arrived. The border with Oman has yet to be settled, but an agreement was reached in 1999 to delineate the borders. Last January, Oman uncovered a spy network that it says is linked to the UAE, although the latter denies any connection. Some commentators have mused that the spy network may be related to Oman’s warm relationship with Iran.

As for Saudi Arabia, an agreement to settle a border dispute was reached in 1964, but it has not been ratified by the UAE nor recognized by Saudi Arabia. Like other Gulf countries, the UAE has always struggled against the influence of Saudi Arabia — politically, culturally, and socially.

On the other hand, the UAE has generally been aligned with the Saudis and other Gulf countries on a number of issues: it was one of the founders of the GCC and, more recently, whole-heartedly joined the Peninsula Shield Force intervention in Bahrain. Also, the UAE has worked with its Gulf neighbors in trying to contain and direct the uprisings in Tunisia, Libya, Egypt, Syria, Yemen, and elsewhere.

As for its Iranian neighbor across the Gulf, antagonism has marred relations ever since the British departed in 1971. Iranian forces quickly claimed ownership of three islands between the UAE and Iran: Abu Musa, Greater Tunb, and Lesser Tunb. The British seemingly promised both Iran and the UAE ownership over the islands and it remains a source of contention and ill-will between the two countries to this day.

Even though Iran is a major economic hub for the Emirates, the main rulers of the UAE have been concerned by its growth in the post-Iraq War environment and have slowly tried to cater to some of the economic sanctions placed on the Iranian regime. Furthermore, cable documents released by WikiLeaks have revealed that UAE officials have privately prodded the Americans to consider invading Iran over its nuclear program.

On a grander scale, the UAE is a staunch ally of the West and actively promotes their interests in the region. For example, the UAE has taken action against the so-called “resistance bloc,” who are linked loosely to Iran, by expelling Lebanese Shia and Palestinians from Gaza in 2010.

Meanwhile, the UAE has begun a behind-the-scenes normalization process with Israel, whether by meeting with Israeli politicians, or allowing Israeli products into the country, among other actions.

When the Mossad assassinated a Hamas official in Dubai, the UAE authorities were not so much outraged about the assassination as they were by it taking place in one of their star cities.

Also in service of the West — and the United States, in particular — the UAE and Jordan provided limited military support in Afghanistan in 2001. It also strongly supported the Anglo-American invasion and occupation of Iraq in 2003, and has signaled its willingness to host an American missile defense shield in the area. This year, the UAE has announced that it would like to be the first Arab country to host a ‘NATO embassy.’

Additionally, the UAE is a major importer of weapons from the West — ranking as one of the top five major arms importers between 2005 and 2009. This past November, it started negotiating a major deal with the US for precision-guided bombs, including ‘bunker busters.’ The Emirates is also an active participant, along with its Western allies, in military action in Somalia and along its coast.

Perhaps the most powerful indication of the UAE’s close alliance with the West is its relationship with Erik Prince and his mercenary firm, Xe (formerly known as Blackwater). In May, news broke that Erik Prince has been tapped by the ruling families in the UAE to set up a ‘desert force’ composed of 800-some foreign fighters. The contract between the private military firm and the UAE has recently been leaked.

Dissent in the UAE

The Emirati sheikhs’ policy choices, however, have not been completely supported by the local population. Vocalizing dissent has been a rare phenomenon due to a combination of a comprehensive social service and benefits provided by the government, and gradual economic and social liberalization. But on the political front, the UAE leadership is quick to crackdown on any threat.

Last year, a public spate occurred between the UAE and the Canadian firm, Research-in-Motion, over Blackberry’s encryption system. For the UAE government, it felt that the Blackberry phone was a threat because it could be used to organize protests.

Throughout the years, any public criticism has been met quickly with jail sentences. Last spring, a number of activists and academics have been arrested for calling for economic and political reforms. This was followed by a crackdown on civil society groups in the country over their support for reform. According to Sultan Al Qassemi, the crackdown on the petition and other civil society groups stems from a fear that it would allow a resurgence of a Gulf Muslim Brotherhood.

The case of five individuals who created and signed a petition for reform have been on-going for seven months. The verdict came out at the end of November and a sentence of up to three years in prison was served for each.

UAE: Where to next?

The celebrations for its 40th anniversary came and went with much pomp. Fireworks, balloons, parades, and music were abundant. A long weekend and pay raises were granted and some progress was made on women’s rights.

However, the narrative above is that of mainly two emirates that have directed an entire country — economically, socially, and politically — with still undetermined costs that continue to take their toll on the indigenous culture and soul of the Emirates.

So far, the leaders of the UAE have placed their eggs mainly in a Western basket and hope that such a relationship will help them maintain their hold in these volatile times. The creation of a foreign legion, the widening crackdown on small pockets of dissent, and the country’s geopolitical alliances are all intended to help the UAE’s rulers maintain the status quo.

The voice of the Emiratis themselves has yet to be heard, or completely understood, when analyzing the country. Even in Dubai, with its cosmopolitan allure, Emiratis and the expats rarely mix. Few platforms exist where the locals can articulate their own views. But as the regional uprisings continue to spread and local Emirati activists become more confident about voicing their concerns, the next forty years will surely be interesting to follow.

The formation of the UAE

The UAE is officially defined as a federal presidential system with an elective constitutional monarchy based on the 1971 Constitution. In theory, the president is supposed to be agreed upon by the emirs of the constituent emirates of Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Quwain. In practice, however, the position of the president has been in the hands of the largest emirate, Abu Dhabi, beginning with Zayed bin Sultan Al Nahyan, who became ruler of Abu Dhabi in 1966 and president of the UAE in 1971 until his death in 2004.

His son, Sheikh Khalifa bin Zayed Al Nahyan took up the position as the second president of the Emirates. The vice president and prime minister position was given to Sheikh Mohammed bin Rashid Al Maktoum, also the absolute monarch of Dubai. The latter’s appointment came after the death of his elder brother Sheikh Maktoum bin Rashid Al Maktoum in January, 2006.

The emirates of Dubai and Abu Dhabi are the real centers of powers in the country. The history of the UAE is dominated by the history of these two emirates.

Prior to the discovery of major oil reserves in the 1960s, modern-day UAE was composed of a number of sheikhdoms along the Gulf that were under the influence of the Ottoman Empire prior to the 16th century. These sheikhdoms were important port centers — along with Oman — that facilitated shipping and trade eastward to India and to the coast of East Africa.

During the 16th century, the territories were penetrated and controlled by European colonial powers, first Portugal — which had expanded greatly along the Indian Ocean — followed by the United Kingdom in the 17th century. For the British, the area was notoriously known as the “Pirate Coast,” due to it being a hub for pirates and raiders against British trade in India.

Various naval military campaigns were initiated, leading to the signing of a treaty in 1853 between the British and the sheikhs of the area that established the Trucial Sheikhdoms. The ties became closer in 1892 with the signing of another treaty that essentially monopolized British colonial control and influence.

The Emirates’ status as a British “protectorate” continued well into the 20th century, until the discovery of oil in the 1960s. Oil exports began in 1962 from Abu Dhabi, with Dubai following suit in 1969.

This led to three major changes in what later became the UAE. Pearl diving, the primary source of income and employment for most of the people along the coast, was gutted with the discovery of oil and the creation of synthesized pearls.

Secondly, oil exploitation gradually fell into the hands of the Americans, signalling the beginning of American influence in the country. Finally, the Trucial States Council, predecessor to the UAE, was established by the various sheikhs in order to coordinate development and investments flowing from the growing oil profits.

When the British announced the end of its protectorate system in 1968 — reaffirmed again in May 1971 — nine sheikhdoms, including Bahrain and Qatar, began discussing unification.

The first two emirates to push forward with unification were Dubai and Abu Dhabi, both of which wrote up the terms of the constitution together and then went to the other sheikhdoms to convince them to join. A day after the treaty with Britain ended, on December 2, six of the sheikhdoms agreed to join together and the UAE was formed (Ras al-Khaimah joined in 1972).

All the emirates have a degree of autonomy in terms of how their rulers run their allocated territory. Yet, the major decisions are in the hands of rulers of Abu Dhabi.

UAE: Al Islami Founder Honoured

salama — Mon, 12 Dec 2011 17:40:43 +0000

Haj Saeed Ahmed Lootah, Founder and Chairman of Al Islami and Lootah Group, spearheaded development of ‘Halal Food’ and ‘Islamic Banking’ in UAE

Dubai: President His Highness Sheikh Khalifa bin Zayed Al Nahyan conferred on National Day the “Head of State Merit Award” on the founder and chairman of Al Islami Foods, in recognition to his distinctive role in the building of the Union, and other prominent personalities.

The UAE President said, “As our country looks forward to more prosperous future, it does not forget the founding fathers and others who had built the federation and made the UAE an advanced state”.

The event was attended by Vice President and Prime Minister and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum, Their Highnesses, Members of Supreme Council, Rulers of Emirates and Crown Princes.

Saleh Abdullah Lootah, Managing Director of Al Islami Foods commented:

“ This is a great honour for us and we are very delighted to have another jewel in the crown of Al Islami. Our employees are elated and proud of being a part of the noble visions of Haj Saeej Lootah. We are committed to continue this legacy”.

Haj Saeed Bin Ahmed Lootah is a self-made businessman who progressed from being an entrepreneur to an accomplished teacher, author, economist, banker, businessman and a visionary community leader.

With the enduring values of education, cooperation and economy set as the foundations of his work, Haj Saeed Bin Ahmed Al Lootah started a number of businesses as well as not-for-profit education and research ventures, with an aim to serve the people of the United Arab Emirates.

Haj Saeed Ahmed Lootah pioneered the development of ‘Halal Food’ and ‘Islamic Banking’ in UAE that spread across the Middle East band beyond. One such testament and model is ‘Al Islami Foods’ company, formerly known as Co-op Islami, established in 1981 which has become a leading trend-setter in the GCC’s processed halal food industry; and establishment of Dubai Islamic Bank.

HH Sheikh Khalifa expressed his appreciation of the efforts of these personalities, who significantly contributed to the Union since its inception alongside the founding fathers. ” We give these, men alive or dead, all the appreciation and respect, and value their historical role in establishing the state and consolidating it until it becomes today one of the most developed countries in the world.” The honouring of such a category of men, he continued, is a “token for gratitude of the UAE to all loyal citizens whose work had contributed to the formation of the current standing of the UAE among nations”

Malaysia: UAE business women look at opportunities in Islamic Finance and Halal food

salama — Thu, 08 Dec 2011 09:50:56 +0000

KUALA LUMPUR: United Arab Emirates (UAE)’s leading businesswomen are looking into investment opportunities to work with Malaysians in two areas – Islamic finance and halal food.

President of the Abu Dhabi Business Women Council and chief operating officer of Al Jaber Group Fatima Al Jaber said Islamic finance and halal food were the two mutual areas that Malaysia and UAE could work together.

“Islamic finance is a very important sector that Malaysia is pioneering and I chair an investment bank (in the UAE). We are looking into investment opportunities in Malaysia,” she told Bernama after the UAE – Malaysia Power Ladies Roundtable 2011 here today.

Al Jaber is among ten influential UAE businesswomen who are in Malaysia for the Power Ladies UAE-Malaysia Roundtable 2011 tour. The Power Ladies tour, organised by Inside Investor, runs from December 5-9 and is aimed at providing the UAE guests with a greater understanding of the business opportunities available in Malaysia.

She said UAE offered huge opportunities for Malaysians in many areas included leisure, hotel, sports, property, healthcare and education.

“UAE is a consumer market. The sports and healthcare industry are growing. Education is another area. We have all types of school and universities in the UAE. There is also a great demand for certain types of properties there,” she said.

She also said that financial services were another area Malaysians could tap as foreigners were currently involved in the business in the Emirates.

“The should be two-way (business ties)…Malaysians should come to UAE and venture into these areas,” she added.

The Power Ladies group also mentioned that three important areas that they would look into before venturing into businesses in Malaysia were government rules regulations, taxation and the business environment.

The group, over the previous two days, met Bank Negara Malaysia Governor Tan Sri Zeti Akhtar Aziz, Malaysia External Trade Development Corporation chief executive officer Dr Wong Lai Sum, chief executive officer of the Malaysian Investment Development Authority Datuk Noharuddin Nordin, SME Corp Chief Operating Officer Datuk Hafsah Hashim.

Today, they are scheduled to meet the Prime Minister’s wife Datin Seri Rosmah Mansor and Duli Yang Maha Mulia Raja Permaisuri Agong Tuanku Nur Zahirah. — BERNAMA

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UAE ‘power ladies’ explore bilateral investment ties opportunities with Malaysia

KUCHING: United Arab Emirates (UAE) businesswomen visiting Malaysia paid a courtesy call Malaysian Government Chief Secretary, Tan Sri Sidek Mohd Hassan yesterday to explore opportunities for closer business ties between the two countries to boost bilateral trade and investment.

The visitors, who are here to attend the Power Ladies UAE-Malaysia Roundtable 2011 from December 5 to 9, will be visiting leading officials of the government and corporate sector to discover further opportunities in the country.

Dubai Business Women Council president and Easa Saleh Al Gurg Group managing director, Raja Easa Al Gurg noted in a press release yesterday, “I would like to see the embassies of UAE and Malaysia working closely to synchronise business relations and seek out investment windows for both countries.”

Currently, bilateral trade between UAE and Malaysia is estimated at US$6.4 billion.

Abu Dhabi Business Women Council president and Al Jaber Group chief operating officer, Fatima Obaid Al Jaber urged Malaysia to create more visibility for the country’s investment environment, especially in places such as the UAE where investors are keen to tap into the Malaysian market.

Sidek concurred with the ladies as he highlighted that Malaysia was an ideal investment destination as the government intended to go beyond incentives to lure incoming investment.

“We are also training human resources for the needs of investors with a strong focus on the high-tech and the services industy,” he noted this as a step taken in conjunction with the nation’s vision to be a fully developed country by 2020.

Sidek pointed out various transformation programmes that the government led to enhance competitiveness, such as Pemudah, a special task force set up between the public and private sector to simplify the process of doing business in Malaysia.

The task force had been working on easing licensing and immigration requirements and visas for highly skilled talents and investors.

Other topics that the meeting touched on include the unemployment rate in Malaysia, business registration processes, programmes for small and medium enterprises, special incentives as well as the most promising sectors for investment.