“A major aspect of the work that has been undertaken in Bahrain has been around the development of industries that act as net multipliers within the economy,” HRH Crown Prince told the delegates attending the 9th WIEF being held in London.
“But the driver, the catalyst and, ultimately, the solution to the region’s issues, lies as much in economic development, in enhanced opportunity, and in education. Through these there is the opportunity of delivering lasting, transformative change and prosperity across class, religion, sect, tribe and race. Economic development thrives through interdependence. Growth in one country brings growth to others and it is a virtuous cycle and development can’t happen in isolation.
“All of us gathered here understand the absolute, fundamental importance of economic development, which this forum helps enhance. This year’s forum looks at our ‘changing world’ and ‘new relationships’. It speaks very firmly to my personal agenda and that of my country.
“While we in the Middle East we are not the entirety of the Islamic World, undoubtedly, the world’s focus has been on our political developments in the Middle East. .
“The Arab world over 100 million jobs must be created in order to meet the population swell the region currently faces from one of the fastest growing youth populations in the world. This is an issue Bahrain recognised over 40 years ago, introducing a raft of programs aimed squarely at diversifying our economy and investing in education and skills development. It is a programme I am passionate about and which I will continue to drive and evolve to meet the challenges of this generation.
“This work centres on the recognition that the private sector has a pivotal role to play as the engine of growth and productivity. And, that investment in people is as important as investment in infrastructure.
“Strong financial institutions and regulatory frameworks form a central element in this approach and these, in and of themselves, help drive job creation – something London knows very well. Our longstanding strength in financial services – has served to benefit the growth of many other sectors as well.
“It has helped facilitate private sector funding for large scale government infrastructure projects, in housing and transport. It has also resulted in private investment in high-productivity sectors, such as manufacturing, petrochemicals, tourism and real estate. All of which has helped create jobs and boost economic growth.
“As Bahrain sits at the heart of the rapidly growing GCC market-The Gulf Cooperation Council-, valued at over $1.5 trillion today, the Kingdom’s financial sector has also played a role in fulfilling the funding needs of the wider region. And today, with the growth of Islamic finance, we proudly host the largest concentration of Islamic financial institutions in the world.
“Islamic finance has grown rapidly in recent years and, as a whole, it is now valued, according to some estimates, in excess of $1.2 trillion globally.
This growth has, primarily, been supported by three factors: firstly, and naturally, this has occurred through the continued and fast growth in many of the economies of the Islamic world, home to 1.5 billion Muslims; secondly, it has been supported by international investors looking to gain access to these markets.
And, thirdly, from observable growth coming from non-Muslim investors looking for what has become known as ethical investment products that adopt the principles which underpin this area of finance and with such potential and opportunity on offer, there are now challenges to meet in order for the scale of demand to be matched, while ensuring that the religious foundation on which it is built, and from which it gains its strength, is preserved.
Ultimately, there is a need to bolster and standardise the regulation of the industry as it develops. This means ensuring a universality of application, to keep the industry attractive, reliable and trusted, and able to meet the ever-growing demand.
“The industry could also benefit from new asset classes, like private equity, infrastructure and liquidity products, while supply of some products, such as sukuk – which still do notes not match demand, is are increased.
“Importantly, to help facilitate this growth, we must also empower and elevate those organisations that already exist to apply regulation and enshrine accepted standards.
“We have the organisations, like this one like AAOFI and others, capable of aiding the industry’s development by protecting its fundamental attribute – the ability to deploy capital for Muslim and non-Muslim investors in a Shariah compliant fashion.
“By ensuring these organisations retain full independence, while strengthening their ability to operate, we can ensure the industry has the scalability to meet the growing demand, and this is very important here, while protecting the spiritual and ethical mandate that gives it its fundamental acceptance among the consumers and maintains its integrity. With this in mind, Bahrain, as host to a number of organisations committed to the industry’s development, is absolutely committed to working with our fellow pioneer, Malaysia, as well as with emerging hubs, such as London, to aid Islamic Finance’s growth. And in that spirit, I would like to invite you all to Bahrain at some time in the future to hold another meeting, so that we can further this good work,” HRH said.
Referring to the WIEF, HRH said that the event was an important opportunity to further these aims. Through greater cooperation, trade and the exchange of ideas, markets can be explored, opportunities developed and, ultimately, jobs created, helped by key multilateral events like WIEF. And, Islamic finance serves as a key example of the potential and opportunity we have in our grasp. It is one we cannot afford to lose,” HRH added.