DinarStandard Editors

Islamic Finance’s Real Economy Leadership Agenda

 (A recent article I had submitted to the DowJones Islamic Market Indexes Quarterly Newsletter.  Download full newsletter here)

The global financial crisis has presented an unprecedented opportunity for Islamic Finance to establish itself as a truly global leader thereby realizing its full, unique potential.  A potential that is nothing short of re-shaping the global finance industry much as Starbucks has done for Coffee or Cirque du Soleil had done for the structurally unattractive circus industry.  A potential that best-selling business book authors W. Chan Kim and Renée Mauborgne would qualify as the ‘Blue Ocean’ of the finance industry.

However, in marketing terms, a large gap exists between the vision and potential of the Islamic Finance brand and the reality of its current brand attributes.  

If the vision of Islamic finance is a financial system that seeks profits while ensuring religious considerations of sharing risk and returns and supporting an ethical society with a potential to serve a global audience, then the reality of today’s industry value proposition is only partially hitting the mark.

I propose here a strategic agenda for the industry that could fill this gap - God willing - by complementing its current identity with one that makes it a major driver behind select human development related ‘real economy’ sectors.   These sectors would include Food, Renewable Energy, Healthcare, Education and Sustainable Technology.   Being key backers of these sectors will proactively support solving global human developmental issues while providing strong profitability potential.

Un-Conventional Approach to Un-conventional Financing

Industry professionals familiar with conventional finance may never consider the need for a whole industry to create an identity around certain sectors since its mandate of profit maximization doesn’t require it to.  So it’s hard for them to imagine Islamic Finance taking such a strategic stance.  However, 1) Islamic Finance is un-conventional so such an approach should only be considered a means to further its own unique identity, and 2) such a strategy would not limit itself from other permissible sectors, but to put a more coordinated effort around select sectors in support of its vision, identity, and greater success.

Islamic Finance Backed Real Economy Sectors

The strategy would be applied by investment and corporate financing arms of Islamic Finance driven by Islamic Private equity, other Investment funds including public equity funds, and corporate financing operations.   By building a major emphasis on a select group of industry ‘clusters’, Islamic Finance would also benefit in its competitive positioning in these sectors due to better operational expertise developed in time, better penetration to source leads and transact within these sectors and their sub-sectors.  

What’s encouraging is that the sectors being proposed are identified as major global growth areas.  Let’s review them briefly:

Agriculture:

There is a known global crisis around high food prices driven by rising demand and lagging supplies.  In a recent DinarStandard analysis, many of the poorer countries – Egypt, Bangladesh, Pakistan, Sudan, Nigeria - are some of the most agriculturally endowed in the world however with dismally low productivity due to under-investment.  

A Sharia compliant investing example in this area is the recently announced US$1.3bn Sharia-compliant fund by UK-based investment company cru Investment Management, which will focus on commercial agriculture in Africa. These investments by cru expect not only strong returns for investors, but also some much-needed investments into agriculture in Sub-Saharan Africa

Renewable Energy:

The International Energy Agency predicts energy needs through the year 2030 will increase by 50 percent to which developing countries, led by China and India, will account for two thirds of the growth.  Given the devastating environmental impact such a growth would drive, there are growing global initiatives towards Clean-tech energy sources (production of energy from net non-polluting sources.)

In a recent DinarStandard analysis by Athar Mian, Solar systems, both in photovoltaic and thermal formats, and wind power were determined to be the most viable clean-tech models for GCC and surrounding countries.  

Healthcare:

According to PwC, healthcare organizations face a growing imbalance of supply and demand. On the demand side is a large population of aging patients in deteriorating health who demand more services, pharmaceuticals, and medical breakthroughs. The supply side, however, is hampered by a shrinking pool of investment capital, a shortage of willing caregivers, and aging physical plants straining under the current volume of patients.

At the recent GE Healthcare Middle East Media Summit held in Dubai, Dr. Loan Cleaton Jones, a Senior Health Specialist of the International Finance Corporation (IFC), highlighted that in the GCC itself, healthcare demand is expected to rise 240 per cent in over the next 20 years, with health risk factors, ageing, population growth and medical inflation contributing to the rise in spending. Consultants McKinsey and Company recently estimated total healthcare spending in the Gulf Co-operation Council (GCC) countries will reach $60 billion by 2025.

Education Sector:

Similar to growing demand in food and energy, the education sector is another area that provides tremendous opportunities.  Within the Arab world, it’s been well established that its demographic is highly young requiring growing need for education services.

Some examples of investments in this area include the launch of a $10 billion education foundation by HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.  Also last year, Abraaj Capital acquired a “significant” stake in Dubai-based Global Education Management Systems (GEMS), which owns and manages a number of primary and secondary schools across the Middle East.

Sustainable Technology:

With Sustainable Technologies, I imply technology initiatives that support services to comply with the principles of economic, social, and ecological sustainability.  

An example is the booming cellular phone services and its impact on society.  As highlighted in a recent DinarStandard report is Vodafone’s M-Pesa mobile-banking program in Kenya. M-Pesa is an innovative system for sending both minutes and money via SMS that is benefiting the farmers in the rural areas of Kenya. One year later, M-Pesa has 1.6 million subscribers, and Vodafone is now set to open mobile-banking enterprises in a number of other countries, including Tanzania and India.

Industry, Institution or Government led

There are many ways such a strategy can be realized.  When you think of German ‘automobile precision engineering’ you realize the reputation is driven by a few of its keys institutions – Mercedes Benz, BMW, Porsche, and Audi.  Given this proven model, a few of the major Islamic Finance institutions could take the lead in establishing global leadership within the real economy sectors identified.   Obviously such institutions and overall reputation are not built overnight.

Conversely, an industry wide initiative is also a viable solution. For example, in the United States, the milk industry, through a collective Milk Industry Association initiative, drives the well known ‘Got Milk?’ campaign to increase awareness and adoption of milk that benefits all milk processors and dairy farmers.  Similarly an Islamic Finance industry wide initiative through the formation of major industry contributed funds or institutions with a coordinated communication campaign could drive this agenda as well.      

Finally, given the important role of governments in infrastructure dependent sectors that have been identified, their participation in such a strategic initiative would be critical for effective implementation.

In the end, the objective would be to create global success stories – regardless of them being industry driven or individual leading institution driven.  Just as Grameen Bank, ;ed by Dr. Mohammad Yunus, is now considered a pioneer and leader of the Micro-Finance industry globally, imagine if Islamic Finance institutions are credited in a similar fashion within renewable energy, food, healthcare, and education sectors.

Challenges

Islamic Finance is all-in-all doing quite well.  However, as I propose, by resting on its current laurels, the industry risks losing a tremendous opportunity to truly establish a leadership role in the global financial landscape or to even realize its full potential within its primary Muslim markets.  

Taking a leadership role in key real economy sectors certainly poses tremendous challenges – however none I feel is greater then a lack of conviction or direction.  Many who have taken leadership roles within Islamic Finance Institutions come from conventional banking systems.  Leaders need to embrace the unconventional, spirituality driven purpose of Islamic Institutions and let that be a key driving force that produces financial results while maximizing returns to a higher calling.

Besides, by taking this proactive approach to ‘ethical’ investing, the conversation about Islamic Finance moves from a system that just avoids un-ethical to one that consciously backs ethical initiatives.  Such is the approach that defines leaders.

    

Global Islamic Finance News: July 8 – July 14, 2007

To our readers – my apologies for the tardy post this week.  The world of Islamic Finance continues to move at a feverish pace.  In our summary this week – IT Upgrades in Pakistan, Islamic Finance in the Netherlands, and a new Islamic Bank in the UK.   

IT and Islamic Finance in Pakistan

One of the lesser mentioned areas of innovation in the wide world of Islamic Finance involves technology applications specifically tailored to handle Islamic Finance transactions.  A variety of companies – regional and global – are actively vying for coveted deals in the growing Islamic Finance sector.  Two recently announced deals confirm the activity in this space.  First, Kuwait-based banking software solutions provider Path Solutions announced that it has signed a contract with BankIslami in Pakistan for the implementation of a complete core banking system in its entire upcoming 100+ branch network.  And second, Temenos Group (SWX: TEMN), recently announced that Meezan Bank of Pakistan has chosen Temenos T24 (T24) to provide centralised core banking across its branch network.  This is an important space to watch since banks and financial institutions in the Islamic Finance space are realizing the role technology plays in maintaining a competitive edge while fostering growth and expansion of services.  The fact that this news if centered in Pakistan tells me that the drive to survive and thrive is reaching a feverish pace – even at the national level. 

Netherlands trying to attract Islamic Finance

Reuters recently reported that the Dutch government is trying to find ways to attract Islamic banking to the Netherlands.  In a letter Finance Minister Wouter Bos said that the Netherlands was fit to play a role in the international expansion of Islamic Finance similar to Dubai and London.  Dutch Minister for Integration Ella Vogelaar said that “that Islamic culture is rooting in the Dutch culture in a way that eventually the Netherlands will have a Jewish-Christian-Islamic tradition.”  This is encouraging especially given that the approximately 1 million Muslims in the Netherlands have faced challenges integrating into the social fabric of the country.  If the government takes steps to offers Islamic Financial services at the grassroots level it will signal that Muslims are more a part of Dutch society than previously thought. 

New Islamic Bank in the UK

Early last week The Bank of London and the Middle East opened its doors to cater to the growing demand for Islamic Financial Services in the UK.  The bank is 20% owned by Kuwait’s Boubyan Bank and plans to list on the AIM in the next 18 months to raise a further £75m, over the £175m already raised.  According to reports the bank will focus on four lines of business which are Islamic Treasury and Financial Institutions, Corporate Banking, Private Banking and Investment Management, and Investment Banking.

Other News

Bahrain's Albaraka Banking Group plans a major expansion over the next five years, as it seeks to stay ahead of rivals in tapping the growing global appeal of Islamic banking.  According to reports, Albaraka currently has operations in seven Arab countries, Turkey, Pakistan and South Africa. It also has licences to open branches in Syria where it will pursue an IPO for $100 million and in Indonesia, the world's most populous Muslim nation.  Eight of its new branches will be open in Pakistan by the end of 2007.

This week in Global Islamic Finance – June 25 – July 1, 2007

Another busy week for Islamic finance...  Highlights (discussed below) include IFC’s backing of Shari’ah compliant mortgage backed securities, GFH’s listing on the LSE, and the Rise of Islamic Project Finance.   

IFC to support UAE Mortgage Securitization

We learned this week that the IFC (International Finance Corporation, the private sector arm of the World Bank) will be purchasing up to $20 million from Tamweel’s landmark $220 million Shari’ah compliant securitization of its mortgage assets.  This is certainly a demonstration of the IFC’s view of the strength of the sector and to the development of the capital markets in the region.  As I pointed out last week – the structure remains to be seen.  In the past mortgage securitizations from the UAE have been supported by 100% cash collateral accounts which left little to be seen from a collateral performance perspective because any and all potential losses were covered by cash set aside for the securitization.  If this is a true securitization, as the concept has developed in conventional markets, cash will only be part of the credit enhancement offered to the structure and investors will be confident that the underlying assets are capable of servicing payments to certificate holders.  Stay tuned as we learn more…

Gulf Finance House lists on the LSE

Bahrain-based Gulf Finance House (GFH) recently became the first Islamic finance house from the Gulf to list on the London Stock Exchange (LSE) with the symbol “GFH”.  GFH has decided to list with Global Depository Receipts which allow local investors to own equity in the Bahrain-based entity.    According to my last check on the LSE website the GDRs were trading at slight premium to their listing price of $25.00.  According to a statement from GFH, "The shares were supplied by existing shareholders in a strategic move designed to build the international profile of the bank and to give it greater access to international capital markets".  With international investors already looking at Sukuks as a viable investment class it will be interesting to see how this type of cross border listing contributes to the growing prominence of Islamic finance worldwide. 

The Rise of Shari’ah-compliant Project Finance

According to Reuters, Islamic finance could soon gain control of the $50 billion Gulf project finance market spurred by government inducements and investors desire for alternatives to conventional funding.  As I read the report, what stuck out for me was the idea that local banks were not as interested in project finance deals given their longer tenor and higher marginal risk profiles.  That’s curious – wouldn’t local banks want their markets to develop for the long term?  Instead it seems that international banks are more in tune and have decided to ride the wave in the long term.

This week in Global Islamic Finance – June 18-24, 2007

As usual, this was a busy week for Islamic finance around the world.  Highlights (discussed below) include the growth of Shari’ah compliant mortgage backed securities, new Islamic finance options in India, and Malaysia’s cross border adventures.   Read on...

UAE Mortgage Securitization

Tamweel PJSC recently announced a landmark $220 million Shari’ah compliant securitization of its mortgage assets.  This represents a first for the UAE mortgage market and opens the door for the increased use of securitizations to recycle capital thereby contributing to the growth of the real estate markets in the UAE.  Tamweel has targeted an international investor base by achieving high ratings of Aa2 by Moody's Investors Service and AA by Fitch Ratings Limited.  I’m curious to understand the nuances of the issuance but there is no doubt that this is potentially the dawn of a new era in the Shari’ah compliant capital markets transactions.  Recent reports also state that Amlak and other mortgage houses will be entering the market with mortgage backed securities.

New Islamic Finance services in India

In our latest issue DinarStandard.com reported on the prospects for Islamic finance in India.  It’s gratifying to see that in just one week two major developments in the market have come to the surface.  Finance group 2i Capital Group in a consortium with Oman-based Amwal Investment SAOC has launched a $300-million offshore Shari’ah-compliant Indian Infrastructure Development Fund.  Separately, Srei Infrastructure Finance of Kolkata is said to have contacted HSBC for a IRS 2 billion Shari’ah compliant facility to fund their latest venture in the infrastructure equipment finance business. 

Malaysia's Cross Border Adventures

Malaysia has embarked on an all out blitz to expand its Islamic finance reach.  The prospects for a combined effort to promote Islamic finance and the Halal industry were given a boost at the recently held Malaysia-Indonesia Investment and Finance Summit organized by the Labuan Offshore Financial Services Authority (LOFSA).  Malaysian Minister in the Prime Minister's Department Datuk Seri Effendi Norwawi and Bank Negara Malaysia governor Tan Sri Dr. Zeti Akhtar Aziz were both present along with Indonesian Minister for Economic Coordination Dr Boediono.  The meeting highlighted the synergistic nature of both industries and pointed to the size and growth of each.  The officials also discussed the need for Southeast Asian markets to integrate highlighting the idea that “improved financial integration will help provide the scale and increased efficiency for the financial intermediation process.”  To this end the ministers discussed the need for harmonization of Islamic finance standards to facilitate the development of common approach and integrated market. 

Malaysia also made overtures to increased collaboration with the United Kingdom when CIMB Group signed a Commodity Murabahah agreement and a Foreign Exchange (FX) - Forward Agreement with the London-based European Islamic Investment Bank (EIIB).  This represents CIMB’s aggressive drive to expand into international markets.  To top it all off Malaysia was urged to expand Islamic Banking in Bosnia by Amer Bukvic of Bosna Bank International at the recently held Malaysia-Bosnia and Herzegovina Business Forum in Sarajevo. 

Other News

In other Islamic finance news Reuters reported that GE, citing rapid growth in the Middle East, has indicated a possible expansion of its car leasing business in the region through Islamic financial service offerings.  Islamic finance training sees a new entry after the UAE Ministry of Higher Education and Scientific Research approved the Associate of Science Degree in Islamic Banking Program to be offered by Al Khawarizmi International College [KIC] beginning Sept 2007. 

This week in Global Islamic Finance – June 10-17, 2007

In this review of news from the world of Islamic Finance and Banking we focus on news from Europe, Pakistan, and the Gulf. 

The European Islamic Investment Bank (EIIB) announced plans to raise up to $600 million through 5 different investment funds.  EIIB is targeting the surplus wealth generated by rising petrodollar income.  The idea is to offer Middle East and GCC investors the ability to diversify their investments to other geographic regions.  According to Gulfnews.com, the EIIB rolled out a pan-European real estate fund in February 2007, and will launch three equity funds and a private equity fund focusing on the health care and medical sectors in September.

The boom in petrodollar revenues is also fueling a boom in project finance deals to the tune of $1 trillion dollars.  According to Oliver Agha, Global Head of Islamic Finance at DLA Piper, despite the industry’s growth and prospects there are challenges on the horizon in understanding the distribution of risk in Shari’ah compliant structures and in the sharing of project finance deals between conventional and Shari’ah compliant investors.  A sign of hope is linked to the increasing use of credit ratings to help investors understand their exposure(s) to risk according to established, transparent guidelines. 

There were a few interesting developments in Pakistan this past week.  Standard Chartered Bank of Pakistan has made a sizeable investment of PKR 30 billion to expand its overall operations and to release its global Islamic banking brand "Saadiq”.  Habib Bank Limited (HBL) has also recently announced that their plans to establish a full-fledged subsidiary to promote Islamic banking on the heels of the announcement by Dawood Hercules Chemicals Limited (DHCL) that it has awarded the mandate for the arrangement of a PKR 8.5 billion through Shari’ah complaint facilities to Habib Bank Limited (HBL) and Meezan Bank Limited (MBL).  This is a significant move of a major corporation in Pakistan to begin its transition from conventional to Shari’ah compliant finance. 

In other Islamic Finance news: Singapore Polytechnic has set up a training and research centre to train professionals for the Islamic banking sector.  The move will support Singapore’s bid to become a regional and global Islamic Finance hub.  And from Malaysia news emerged of CIMB Islamic’s bid to become a major Islamic Finance provider to customers in South East Asia and the Middle East.  And finally, as a further illustration of how business builds bridges between people we learnt this week that Blake Gould, a lifelong Unitarian Universalist, is executive director of the Institute of Halal Investing, a nonprofit think tank based in Portland, Oregon, that promotes the understanding of Islamic finance among Muslims and non-Muslims alike.

Canada's UM Financials finds a Unique Partner

UM Financials is a steadily growing provider of Shari’ah compliant financial products to the Muslim community in Canada.  The company was recently profiled by the Toronto Star newspaper in an article which showcased the company’s recent growth through a unique partnership – UM Financial is partially backed by a Jewish investor.  At first glance many readers might think, “A Muslim in partnership with a Jew?!”  It is unfortunate that the founder of UM Financial, Umar Kalair, has been criticized for approaching conventional financial institutions for support.  The fact of the matter is that Kalair committed himself to developing financing for customers who wanted Shari’ah compliant finance and he delivered on that commitment.  He observed that the Prophet (s) bought grains from a Jewish merchant after mortgaging his armor with him.  Kalair’s UM Financial has received support from the Credit Union Central of Ontario and is now partnering with Derek Scheinman of New Horizon Mortgage Investment Corp. to structure Shari’ah compliant commercial real estate financing.  Such partnerships keep it real – for all the ideology and identity behind the parties in this transaction Kalair and Scheinman are doing business.  Each party looks to their benefits and measures risk against reward before proceeding.  This deal makes sense for everyone involved.

Are "Islamic MBAs" on their Way?

Mr. Farhan Bokhari, in a recent Financial Times article (Dec 18th), examined the growing need for specialized MBA programs for the Islamic Finance Market.  The article essentially summarizes the growing challenge of finding qualified talent for Islamic Banks, specifically a big skills gap of trained managers and marketers who understand the unique nature of this business and its markets.

Mr. Rushdi Siddiqui, Global Director of Dow Jones Islamic Index, suggested that, "Islamic banks have to take innovative steps such as offering generous endowments to create chairs in Islamic Finance, banking and associated areas at leading business schools in the west."

This would certainly be a great way to introduce such programs given the West’s expertise in business education as well as to promote the industry on a global scale. 

The piece doesn't reference any current Islamic MBA programs essentially pointing to their non-existence.   However, DinarStandard had previously listed a selection of institutions which offer some dedicated courses, research/academic programs, distance learning relating to Islamic Finance.

For example, one of the most prominent Universities in Malaysia , the International Islamic University Malaysia (IIUM), has a Kulliyah (Faculty in Arabic) of Economics & Management Sciences which was established in 1983.  Through its courses and programs the Kulliyah aims to equip “…students with the knowledge and skills they need to face in our increasingly challenging world by integrating conventional economics, business and accounting education with Islamic guidance.”

Some of the other institutions referenced in the DinarStandard article were:

• International Islamic University Malaysia, Malaysia
• Islamic Research & Training Institute, IDB Jeddah , Saudi Arabia
• Bahrain Institute of Banking and Finance , Bahrain   
• Emirates Institute of Banking and Financial Studies, UAE
• Center for Islamic Economics  Karachi , Pakistan   
• Islamic Banking and Finance Institute of Malaysia
• Institute of Islamic Banking and Insurance London , UK
• Harvard Islamic Finance Project  Cambridge, USA
• Islamic Economics Research Center, King Abdul Aziz University, Jeddah , Saudi Arabia   
• Loughborough University, Leicester , UK
• Durham University Durham , UK
• Markfield Institute of Higher Education Leicester , UK

Dinar Standard will be monitoring this important area for developments. 

FDI.net, pri-center.com, Gulf finance, and IDB’s Poverty Alleviation Fund

Weekly roundup of some key economic / finance related activities:

First, the World Bank’s Private Sector Development Blog announced recently that MIGA (Multilateral Investment Guarantee Agency) just launched two websites to help international investors trying to understand business environments. FDI.net offers free, on-demand country analysis and information on all things related to foreign direct investment in 175 countries. The other site, pri-center.com, helps international investors understand the issues related to political risk and how political risk insurance can help them to protect their investments.

The Financial Times released a special report Gulf Finance on November 27^th, 2006. The report highlighted the impact of the unprecendented wave of liquidity brought about by high oil prices on Gulf economies. The report also included articles on investment trends in the Gulf as well as Islamic finance.

And finally, the Islamic Development Bank recently announced it would raise at least $10 billion over 10 years in a new Poverty Alleviation Fund to combat extreme poverty in Africa and elsewhere among developing nations. The aim is to help meet the UN Millennium Development Goals (MDGs) by 2015.   Saudi Arabia has pledged $1 billion and Kuwait $300 million to launch the fund, which is expected to start operations in mid-2007. 

Islamic Finance creates Ties of Trust

If anyone out there doubts the arrival of Islamic Finance on the international scene they need only to refer to the September 22nd issue of the Weekend Financial Times.  The entire cover of the section was devoted to Islamic Finance as a bridge connecting the West with the Muslim World.  The article was entitled The Wealth Issue: Make money, not war and focused much of its coverage on the activities of Deutsche Bank’s up and coming Islamic Finance practice led by Geert Bossuyt. The discussion juxtaposing Mr. Bossuyt’s Belgian Catholic heritage was telling in that Mr. Bossuyt revealed how working in Islamic Finance for him has served to make him more respectful for Islamic culture.  Indeed I would be hard pressed to believe that the industry has not had the same effect on scores of bankers and financial professionals around the world.  I can personally testify to discussions of the ethical and just nature of Islamic Finance which I witnessed at the IIFF in Istanbul in September 2005.  These discussions were largely carried by non-Muslim financial professionals.

The FT article also mentioned some of the usual criticisms of the industry such as the high fees charged by Shari’ah scholars and the suspect nature of Islamic finance transactions as well.  But these debates are far from over.  What seems to be more interesting in the immediate term are 1) the cultural pride the industry is providing to all types of Muslims worldwide, 2) the possibility to bring Islamic finance products and services to a wider audience – Muslim and non-Muslim, and 3) the shift in financial strategies by companies who recognized the markets demand for such structures. 

The market speaks.  It speaks to banks, corporations, and consumers alike enabling a circulation of funds that creates jobs and funds billions in development projects each year.  A recent article in Gulf News also illustrates the recent rise in Islamic finance offerings and expectations for their growth in the near future. 

In the end what we can walk away with from such news is the knowledge that the dynamic nature of the industry is creating ripples across the global markets.  Much like the fabled Silk Road centuries ago, it cuts across borders and develops ties of trust in a globalized world among cultures that often live in fear or suspicion of each other in the shadow of 9/11.   What we must continue to ponder is the industry's future direction in staying true to Islamic norms of economic justice and equity as it continues to grow. 

Birth of Venture Capital in the Arabian Gulf

On February 20-22nd, 2006, a historic gathering of the nascent Venture Capital and Private Equity industry of the MENA region was organized in Manama, Bahrain under the auspices of the newly formed Gulf Venture Capital Association (GVCA).  What's the big deal?  Afterall there are so many events happening in the region that are just talk with little substance.  Well this event apparently turned out to be something special.

According to Jerry Borrell of Private Equity Week, who attended the event, at least 21 new funds were announced, ranging in size from $28 million to over $10 billion.  Interestingly the focus was on investing in regionally-founded, regionally-run and regionally-operated funds.  Little interest was shown on raising funds for American or European venture funds.  PE Week also projects that funds from the Gulf region will raise at least $17 billion by the end of 2006 which could pass the total of all new PE funds being raised in Asia (inclusive of China and India)!

So will the GVCA live up to its purpose?  Only time will tell.  We certainly pray and hope that the GVCA will not just wither away, but play a sustained critical role in developing the financial engine of an entrepreneurial, innovative regional economy.