AAFF Builds Bridge between Arab World and Asia, 16-18, Sep, 2006 Arab Asian Financial Forum urges Arab and Asian financial services community to explore wealth of opportunities The Middle East, with a population of more than 250 million and enormous wealth, is catching the undivided attention of the many Asian countries such as China, Japan, Malaysia and India. Many Arab countries have signed free trade agreements with China, Japan and India and officials hope that these accords will boost growth both in the Middle East and Asia. The Asian giants, who have recorded the highest GDP growth in the world, are making impressive trade agreements with the GCC countries as the volume of trade is growing each year. The GCC has wide economic and trade relations with China and Japan and the future looks very promising. The Arab Asian Financial Forum (AAFF) summit held in Singapore during the IMF week discussed many important issues pertaining to Arab world developments in Banking, Finance, Trade, Investment, and, potential synergistic opportunities in Arab Asian regions. The two day summit took place in Meritus Mandarin, Singapore and was attended by leading economists, bankers, and business leaders from Arab and Asian regions. Asia consumes 23 million barrels per day, which is 30 percent of the worlds demand. The GCC exports two-thirds of its oil output to Asia, which could more than double by 2020. Further, more than half of GCC exports go to Asian countries while a third of GCC imports are from Asia. Together, the GCC-Asia oil and non-oil trade figure is approximately $200 billion. That figure is certain to grow as negotiations for free trade agreements are currently under way with China, India and Japan. The summit discussed wide ranging issues such as synergistic opportunities in the Arab Asian region towards trade, investment and Finance, Islamic Banking developments in the Arab world, Islamic banking developments in the Asian region, Real estate finance and development, insurance, and economic integration perspectives. His Excellency Mohammed Fadhel Khallaf, Kuwait ambassador to Singapore welcomed the gathering and dwelled upon the need to have stronger ties for overall prosperity of the entire region. He was optimistic that the discussions addressed many key issues of relevance in the region. During his speech at AAFF, Adnan Ahmed Yousif, Chief Executive Officer of the Albaraka Banking Group, said that “challenges at the International level arise from the effects and consequences of the globalization and international financial liberalization. Like any other economic sector, Islamic Banks are not exceptions. “As I see it, globalization is a challenge and a key factor for encouraging institutions to accelerate building their internal capabilities to meet international competition. Unless Islamic Financial Institutions are fully aware of such challenges they would remain confined to their local markets thus posing a threat to the natural growth of our developing industry,” he added. The use of oil money in the development of the economies of the GCC countries and the increase in Japanese business in the region were discussed between officials. There is an increasing share of GCC trade was with Asia and that businesses in new fields had started to rely on one another. The GCC and Asian official also discussed building supranational ties and relations between non-government organizations, and the need to shift production chains and transfer technology to the GCC countries. Speaking at the Arab Asian Financial Forum, Bank Negara Malaysia Governor, Dr Zeti Akhtar Aziz, announced that the next AAFF Summit will be held in Malaysia. Later during the day, HE Badr Mashari Al Humaidi, Kuwait’s Minister of Finance delivered a speech and a series of Arab Asian Financial Excellence Awards and Arab Asian Financial Recognition awards. One example of the booming trade is the press report indicating that the total trade between China and the GCC rose considerably during the first half of 2006, where unofficial statistics estimate that total trade reached $22 billion. Since 2004, China and GCC government officials have been involved in negotiations to set up a free trade agreement. July 2006 saw the closing of the third round of negotiations. Automobiles, communications, electrical appliances, pharmaceutical materials, fashion and foodstuffs account for the most significant products exported to the Middle East region, in which the air shipment sector plays a major role. Regional economic diversification received a boost when the Gulf Cooperation Council (GCC) and India - which signed a bilateral framework agreement for economic cooperation in August 2004 - announced that final negotiations for a free-trade agreement (FTA) would start, to thrash out niggling issues like rules of origin and differential tariffs. R. Seetharaman, Dy CEO, Doha Bank delivering the key note address on ‘Synergistic opportunities in Arab Asian region – Finance, Trade and Investment’ explained the significant events and trends around us which are shaping the global economic alignment and cooperation climate. Events such as rising energy prices and energy security concerns, difficulties in arriving at consensus on Doha agenda, Middle East conflict severely impacting the economy of Lebanon – all are creating new dimensions and economic challenges. He said that “every bloc wants to access other markets while giving as little away as possible. Removing bottlenecks of Global trade and enabling all countries to participate in global economy is the biggest challenge for economic leaders. Globalisation, deregulation, consumerism and technology has made the world borderless and highly competitive. In this competitive environment, Asian countries and blocks – GCC, ASEAN, India, China, Japan all have done extremely well.”
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