Page 33 - Aamir Rehman Gulf Capital and Islamic Finance The Rise of the New Global Players

18 Introduction

Conclusion

We conclude our review of Gulf capital and Islamic finance as new
global players with a discussion of their potential roles in a changed
international financial order. The rise of the Gulf and of Islamic
finance may be seen as part of a broader evolution toward a multipo-
lar financial system. The Gulf’s role in this system will be largely
dependent on the ongoing scale of GCC surpluses—surpluses that
may be significant but that are based on unpredictable energy prices.
Islamic finance may expand faster or slower depending on the
growth of Muslim markets, but it is evidently a long-term trend that
has demonstrated its ongoing importance in the international finan-
cial system.
Though it is impossible to fully predict the Gulf’s role in the
future, indications suggest that the Gulf is likely to remain a key
player in global investments for years to come. The involvement of
Gulf-based investors in international markets can have an enriching
effect, both financially and otherwise, and generate opportunities for
firms and professionals who understand the aspirations and needs of
such investors. At the same time, the Gulf’s engagement in global
markets has been—and can continue to be—a driver of reform within
the GCC region itself. Robust strategies for both global institutions
and entities in the Gulf rely on embracing change and recognizing the
opportunities created by an ever-evolving world.

DISTINCT—YET RELATED—PHENOMENA
Gulf capital and Islamic finance, although related, must be under-
stood as distinct phenomena. The vast majority of Gulf investment
has been—and remains today—conventional in its structuring rather
than Shariah-compliant. At the same time, Islamic finance is a gen-
uinely global phenomenon, with products and services being offered
in Asia, Europe, Africa, the United States, and elsewhere. Why, then,
do we discuss them together in a single book?
There are three chief reasons for linking these two separate top-
ics in a single volume:

1. GCC countries represent the bulk of the addressable Islamic
finance market. The Gulf region’s markets—in particular,
Saudi Arabia—have been leaders in terms of market size and
relative market share of Islamic finance. Although non-Gulf