The Gulf is at the forefront of a new era in financial services that will see Islamic finance play a key role in shoring up the fragile world economy, the finance director of Qatar Petroleum said on Wednesday.

Abdulrahman Ahmed Al Shaibi, who is also a board member of Qatar Financial Centre (QFC) Authority, said the global crisis had gifted the Gulf a “greater stake in the world economy”.

“We now own some of the world’s leading companies,” he said. “The Gulf has been protected from the worst of the financial tsunami.”

He added, however, that local investors had faced “a painful lesson to learn that the markets aren’t a one-way ticket to wealth”.

“No country or region can immunise itself against a recession. We all need to question the easy assumptions we have made about how to do business.”

The West’s frozen credit markets also presented a prime opportunity for the more widespread use of Islamic finance, he said, adding that the tenets of Sharia-compliance – prudent lending, shared risk and a ban on interest – would appeal to investors burnt by the global crisis.

“There is no doubt Islamic finance is ripe for further development. With banks still reluctant to lend the Sukuk is a viable and reliable alternative. There is a lot of value in this, and the markets are not taking full advantage of it,” he said.

“[Banks] are looking at Islamic finance as primarily asset-backed financing. I think they have to look at it as the concept itself – that there is no money that is not linked through to real economic value.”

Al Shaibi was addressing delegates during the opening day of the QFinance Global Debates, held this week in Qatar to mark the launch of the QFinance reference book, a joint venture between QFC Authority and Bloomsbury Publishing.
 
Speaking on the sidelines of the event, Al Shaibi denied that Gulf governments had been reluctant to acknowledge the impact of the downturn on local economies and insisted the region was making strides towards improved transparency.

“The impact has been there – not one has claimed there was no impact,” he told Arabian Business. “But we have all along said at a macro level it has been manageable. And this is true. You can see things have not really gone the way it has in the Western markets.

“We can’t deny we are in the process of improving our transparency, and we won’t claim we are perfect. But the introduction of ratings agencies into our system is evidence that we are willing to disclose information. It’s a dramatic move.”

Qatar Petroleum is rated by credit agencies Moody’s and Standard & Poor’s.

Al Shaibi said that market talk should pay less attention to what governments say, and take better note of what they do.

“The Central Bank of Qatar at the end of 2008 looked at buying equities in the banks… and they have taken a step towards buying the investment portfolios. Now, if you are saying the governments have taken these steps – how can you say there was no disclosure, or an attempt to claim there was no impact? Of course there was – that is why we took those steps. Our deeds speak louder than words.”