Under the patronage of Maktoum bin Mohammed (GFF) kicks off today

- Highlights From The Speakers At The Inaugural Global Financial Forum Organised By (DIFC)

The inaugural Global Financial Forum (GFF), organised by the Dubai International Financial Centre (DIFC), the leading international financial hub for the Middle East, Africa and South Asia (MEASA), was held today under the patronage of His Highness Sheikh Maktoum bin Rashid Al Maktoum, Deputy Ruler of Dubai and President of DIFC.  The event provided a platform for expert-led sessions on geo-economic trends shaping the region as well as technological developments that are geared to take the financial services industry to the next level.

 Following DIFC’s announcement of a USD 100 million FinTech-focused fund, the key highlights from the day’s morning sessions, which was held under the theme “Navigating the New Order”, were the following:

 Session title: Gulf Finance Goes Global

As the Gulf pivots away from old economy that is state-led and oil-centric to a new economy that is private-led and consumer-centric, Khaled Talhouni, Managing Partner of Wamda Capital, said that “the new oil is the consumer” and that is where there will be the greatest opportunity.

 Low oil prices are providing an impetus for Gulf economies to diversify away from the oil industry. Hafez Ghanem, Vice President, MENA, World Bank, said Dubai was a good example of how an oil exporter should diversify, and added that Saudi Arabia, with its Vision 2030, is doing the same. He stressed the need for the private sector to drive most of the economic growth, and private-public-partnership models will be very important in securing that. He added that the privatisation drive will help prop up the capital markets.

Karim El Solh, Co-founder and Chief Executive Officer of Gulf Capital, said the challenge is for capital from the GCC to invest in the region and to attract foreign capital to the region, as it transforms from being state-led to consumer and private sector driven.

 Session title: The Islamic Economy: Engine of South-South Investment

Islamic finance has been growing, and although it only represents a very small amount of the total finance world, its appeal is spreading to an increasing number of non-Muslims because the principles underlying Islamic finance are in line with ethical and responsible financing.

 One of the main hurdles that has stunted Islamic finance’s growth according to Mohamed Damak, Global Head of Islamic Finance, S&P Global Ratings, is the lack of standardisation, mainly that in some jurisdictions one instrument’s structure is deemed as Shariah compliant while in another it is not.  Abdulla Al Awar, Chief Executive Officer, Dubai Islamic Economy Development Centre, said that having a single standard may not be necessary, arguing instead for a harmonisation of standards.

 Session title: Financial Reforms in Emerging Markets: Ask the Economist

Dr. Patrick Njoroge, Governor, Central Bank of Kenya, said that early adopters of mobile banking technology in Kenya has helped bring financial services to those who were underbanked; as of 2016 roughly three-quarters of the adult population have access to financial services. Dr. Njoroge added that micro lending and investment in government securities through various platforms, will encourage a culture of saving and investment, ultimately this is positive for the entire economy.

 On a global scale, the Governor also said that it would be important to have access to cheaper smart phones, so that the 2 billion people who have no access or limited access to financial technology can be serviced.

Soumya Kanti Ghosh, Chief Economic Advisor, State Bank of India, said that India is on the path to major structural reforms, including demonetisation which will help formalise the unorganised financial sector. Some of the major benefits of those reforms have been financial inclusion, demonetisation, and the empowerment of women.

 Fireside chat: The State of Play with Bill Winters

Bill Winters, Chief Executive Officer, Standard Chartered, believes that the underlying economic story in the Gulf is positive. He added that Standard Chartered is investing heavily in the region due to plenty of competitive opportunities.

 Across the rest of the MEASA region, Winters said that the growth dynamic is positively changing in Africa; Ghana and South Africa are the two biggest markets in that continent that have recovered remarkably over the past two years. As for China, he believes that the leadership is aware of the size of debt that it has accumulated over the last decade and are taking measures to reduce leverage. He also added that in the medium term, the capital markets will continue to open up to foreign investment. On India, Winters said that the Indian government has set itself on a path of positive growth and recovery.

 As for FinTech, Winters said that the biggest spenders are banks; over the last several years upgrading and adopting to new technology makes up roughly 10 percent of banks’ expense base. In the UAE, Standard Chartered processes over 98 percent of their transactions digitally.

 Winters believes that commercial banks will be around for a long time, but they will adapt to new innovative products and services.

 Session title: Goodbye World, Hello Regions: Regional trade deals and corridors

The nature of trade has changed, and nowhere is seeing this happening as fast as in Asia.  Increasingly, supply chains that have been only partially involved in the largest continent in the world now begin and end there. Kevin Sneader, Chairman, Asia, McKinsey, said that globalisation has also entered a new era; the growth of emerging markets and their middle classes will drive consumption and a further shift of the centre of trade towards Middle East, Africa and Asia.

Sneader also said that initiatives such as China’s One Belt, One Road will require more involvement from private sector to ensure long-term sustainable growth.

 As for China’s ties with the Middle East, Alicia Garcia Herrero, Chief Economist, Asia Pacific, Natixis, explained that beyond its growing size, the nature of economic relation between the second largest economy in the world and the Middle East has changed substantially in a very short period of time. One of the drivers Herrero noted is China’s push for a gigantic investment in its One Belt, One Road initiative where the Middle East received as much as 24 percent of China’s total investment in those Belt and Road countries.

Related News

Other News