The role of Islamic finance in enhancing financial inclusion in organization of Islamic cooperation (OIC) countries

The core principles of Islam lay great emphasis on social justice, inclusion, and sharing of resources between the haves and the have nots. Islamic finance addresses the issue of"financial inclusion"or"access to finance"from two directions -- one through promoting risk-sharing contracts that provide a viable alternative to conventional debt-based financing, and the other through specific instruments of redistribution of the wealth among the society. Use of risk-sharing financing instruments can offer Shariah-compliant microfinance, financing for small and medium enterprises, and micro-insurance to enhance access to finance. And redistributive instruments such as Zakah, Sadaqat, Waqf, and Qard-al-hassan complement risk-sharing instruments to target the poor sector of society to offer a comprehensive approach to eradicating poverty and to build a healthy and vibrant economy. Instruments offered by Islam have strong historical roots and have been applied throughout history in various Muslim communities. The paper identifies gaps currently existing in Organisation of Islamic Cooperation (OIC) countries on each front, that is, Shariah-compliant micro-finance and financing for small and medium enterprises and the state of traditional redistributive instruments. The paper concludes that Islam offers a rich set of instruments and unconventional approaches, which, if implemented in true spirit, can lead to reduced poverty and inequality in Muslim countries plagued by massive poverty. Therefore, policy makers in Muslim countries who are serious about enhancing access to finance or"financial inclusion"should exploit the potential of Islamic instruments to achieve this goal and focus on improving the regulatory and financial infrastructure to promote an enabling environment.Access to Finance,Debt Markets,Banks&Banking Reform,Emerging Markets,Islamic Finance

Qatar Emerging as the Most Attractive FDI Destination in the GCC

In this era of globalization and high competition each and every nation is trying to attract maximum investments from overseas for the development and growth of the economy. All GCC economies are in the growth mode and are dependent on the revenue from oil, but the current decline in oil prices have very badly affected these economies and all are targeting to secure maximum foreign direct investments (FDI). Many of the developed nations and Multinational Corporations are in the search of the best destinations for their investments. The purpose of this study is to identify the most attractive destination for FDI in the GCC. The flow of FDI into a country depends on the availability of a number of factors. This study probes into the existence of each of these factors in the various GCC countries. Secondary data is used to rank each country on the basis of the parameters that attract FDI. The findings indicate that Qatar is emerging as the most attractive FDI destination in the GCC. This paper is useful for all countries and MNCs who are searching for investment destinations in the GCC as it ranks the countries on the basis of the attractiveness of various determinants of FDI

Strategies of development and diversification: a comparative analysis of Qatar and Dubai’s economic development models

More than any other GCC states, political and economic foundation linkages between Dubai and Qatar have been great factors that could result in similar economic development. Shared oil boom experiences and early political cooperation brought several significant opportunities where Qatar and Dubai can manage similar economic development. Yet, Dubai’s government was able to develop and diversify its economy, thus becoming one of the largest economic hubs in the world, while Qatar wasn’t able to match Dubai in either economic or urban development. The similar political and economic foundations didn’t support Qatar in having similar accelerated development and thus this research aims to demonstrate the reason behind the different adopted development strategies between Qatar and Dubai, and why Dubai was able to develop and diversify faster than Qatar. To shed light on this issue, this research follows social constructive approach and examines the different economic, political and social factors of Qatar and Dubai, and how these factors worked differently in each state. This is done by examining certain areas, starting with the historical context of Dubai and Qatar, and how each state decided to adopt certain development path, and then the role of leadership in promoting the development through state’s strategic vision. Furthermore, the research dedicates a full chapter to illustrate the development and economic growth factors of the addressed states and how the differences in economic, political and social factors supported Dubai to develop earlier than Qatar. Based on the research finding, this thesis argues that Qatar and Dubai different development strategies are propelled by several economic factors and the most important is the size of oil reserve of the both states. The political actor is another vital finding in this research as the political interests of the state and leadership direction are major aspects in controlling and promoting the state development. Moreover the research argues that the environment origin is another vital element that determines the different development strategies; the research approaches that Dubai’s cosmopolitan and Qatar’s Modern traditionalism is another aspect that contributed to the difference in the economic and urban development of Qatar and Dubai. Therefore, the different development models and economic growth of Qatar and Dubai is not limited to certain state’s elements or state’s available resources, rather it is based on more profound political, economic and social factors which play great roles in determining the development path of the state

The Director Duty of Care in Qatar

In this age of globalization, cross-border investment and intense competition for capital, comparative corporate governance is an increasingly important topic. This Article examines and analyzes the duty of care for directors of publicly-traded companies, comparing Qatari law with Delaware law. It finds that Qatari law on the duty of care is deficient in several respects. Under current Qatari law, directors are liable for duty of care violations for “mistaken” business decisions. Neither gross negligence nor something more than mere negligence is required. Moreover, Qatari law makes these duties non-exculpatory. Thus, in comparison with Delaware, Qatari director obligations are riskier to directors in terms of personal liability and may discourage the most qualified people from becoming directors. Qatar would greatly benefit from modifications to its duty of care law. Specifically, Qatar should enact a business judgment rule (“BJR”) which is vital to creating a balanced risk-taking environment. Qatar’s Companies Law should be amended to include the BJR and should articulate the misconduct necessary to rebut the BJR. The threshold of such conduct should be gross negligence or a business decision for which there is no rational basis. Mere mistake or negligence alone should not be sufficient to impose liability. In addition, Qatar should consider allowing shareholders to approve exculpatory clauses which would insulate directors from liability for duty of care violations based upon conduct where there is no bad faith, self-interest or disloyalty. Doing so would encourage companies to hire the most qualified directors and would encourage the prudent risk-taking that is the hallmark of the world’s most successful corporations

Azerbaijan in Transition

Jens Hölsche

Comparative study of SMES in Dubai and south Korea

Gulf Cooperation Council (GCC) countries have enjoyed large amounts of oil revenues for their development and prosperity over past fifty years or so. However, since the dramatic drop in oil prices in 2014, all the GCC countries are facing serious challenges in this regard. Dubai is one of the least dependent states in the UAE in terms of oil revenues and is the first state in the GCC to focus on SMEs. However, its economic activities are still, in many ways, related to oil activities and basic trading sectors. SMEs contribution to GDP in Dubai is also relatively lower than other European and Asian countries, and citizen’s participation in private sectors is also limited. In this regard, I argue that Dubai can use the development state model of South Korea to develop their SMEs and private sectors, as the Asian nation successfully used this theory to increase industrialization from an agricultural based economy from 1960 to 1990

The Oil Supply and Demand Context for Security of Oil Supply to the EU from the GCC Countries

In examining the prospects for oil and gas supply from the GCC countries, we draw on the evidence that the supply of oil and gas from the region has been relatively reliable, notwithstanding the region’s perceived political instability. The approach taken here starts from this empirical observation; namely, that supply from the region will be available when called upon, as it has in the past. Oil and gas are of central importance to the economies of most GCC countries. Hydrocarbons provide the basis on which to gradually diversify GCC economies. Continued hydrocarbon-based economic growth provides the platform for economic diversification which can in turn underpin internal social and political cohesion and stability of these countries. Broadly speaking, Russia and the rest of the FSU will increasingly dominate the world’s oil supply outside OPEC and the Middle East, while China, India and North America will continue to determine oil demand. The political evolution of the FSU and the economic evolution, and macroeconomic policy making in particular, of the big Asian countries and the United States will be the determinants of the prospects for the call of GCC oil. Two scenarios of oil supply and demand; namely, Russia’s oil supply falters while China’s demand soars, versus Russia’s oil supply soars while China’s demand collapses, present two totally different outcomes for the economies of the GCC, and specifically affecting their ability to invest in their comparative advantages and diversify their economies. Paradoxically then, the internal prospects of the Middle East depend on external developments. Thus, this analysis looks outside for a basis to develop propositions for the inside with respect to, for example, ‘How much of the global oil and gas markets can GCC countries count on supplying?’Oil, Demand, Supply, Security, GCC