Page 40 - Aamir Rehman Gulf Capital and Islamic Finance The Rise of the New Global Players

CHAPTER 1 Floating on Wealth 25

discussed the rise of a “New Silk Road” as historical trade links
7
between Asia and the Middle East have been revived. There is even
an investment firm today by the name of New Silk Route (chaired by
the former managing partner of McKinsey) that invests in businesses
related to these growing economic flows. 8
Another key driver of the premodern Gulf economy—and one
that remains important today—was the economic activity related to
the Hajj. This pilgrimage to Mecca, required of all Muslims of means,
now brings around 3 million pilgrims to Saudi Arabia each year. In
premodern times, the numbers were far smaller, but the journeys
were more elaborate. It was not uncommon for pilgrims to travel for
several months and then to stay on the peninsula for several more
9
months before returning home. The “Hajj economy”—in addition to
pumping funds into the Saudi economy each year—has strategic
implications for the development of key sectors. If fostered and
applied more deeply, the capabilities and skills linked to the Hajj can
be pivotal in developing and expanding world-class initiatives and
companies in sectors such as infrastructure and logistics manage-
ment, public health and safety management, and Shariah-compliant
savings and financial services. Besides being an economic boon each
year, the Hajj can also be—as it has been for centuries—a strategic
component of the region’s economic development. 10
The discovery and export of oil—especially during the succes-
sive oil booms of the 1970s and 2000s—have, of course, transformed
GCC economies. Nonetheless, modern versions of the premodern
sectors that supported the Gulf for ages remain visible today: massive
ports like Dubai’s Jebel Ali Free Zone facilitate trade between Asia
and Europe; luxury goods inspired by the trade in gold and precious
stones persist in modern form. Furthermore, the diversity of ethnici-
ties integrated into Gulf society, especially in the western parts of
Saudi Arabia, strongly reflects the heritage of the Silk Road and the
Hajj economy.
A few decades ago, few would have imagined the massive
wealth and rapid development that can now be seen in the Gulf. In a
remarkably brief period of time, the countries of the GCC have made
the transition from being minor economic actors (and often-over-
looked markets for goods and services) to playing a meaningful role
in the international economy. As discussed in length in Dubai & Co.,
this rapid growth has brought both benefits and challenges. One such
challenge is a tremendous “backfill imperative to develop the social
institutions—universities, cultural institutions, civic institutions, and