KUWAIT CITY, Nov 27: Sheikh Mohammad Al-Jarrah Al-Sabah, Chairman of Kuwait International Bank (KIB) and Chairman of the Union of Arab Banks (UAB), called for the establishment of an Arab banking consortium, as a means to prevent international banks from assuming control of Arab banks and other financial institutions. Al-Jarrah said that these economic consortiums will allow banks to channel some of the Arab investments currently being made abroad into local investments within Arab states. This will in turn lead to a boost in new projects, creating job opportunities and driving economic development across the entire Arab region – in addition to helping stem terrorism in the region.
According to Al-Jarrah, the idea of creating an Arab banking conglomerate stems from a belief in the fundamental need for cooperation and collaboration within the banking sector. It is also driven by the notion that cooperation will help mobilize human capital, conserve and maximize resources, and build capacities. This cooperation is a perquisite to building a solid foundation rooted in peace and stability, and a key component towards achieving balanced, sustainable and comprehensive development, said Al-Jarrah.
Al-Jarrah’s statement came as part of his opening address at the inauguration of the Annual Arab Banking Conference 2016, which took place in Beirut on Nov 24 to 25 at the Phoenicia Hotel.
Organized by the UAB, under the patronage of Prime Minister Tammam Salam, represented by Deputy Prime Minister and Minister of Defense Samir Moqbel, the conference was held in partnership with the Bank of Lebanon (Banque De Liban), the Association of Banks in Lebanon and the World Union of Arab Bankers, and was attended by a number of influential economic and political figures, including: Fouad Siniora, Former Prime Minister, Amr Moussa, Former Secretary General of the League of Arab States, Sheikh Mohamad Al-Jarrah Al-Sabah, Chairman of the UAB, Riad Salame, Governor of Banque du Liban, Dr Joseph Torbey, Chairman of the World Union of Arab Bankers and President of the Association of Banks in Lebanon, Adnan Kassar, President of the Lebanese Economic Organization, Dr Sahar Nasr, Minister of International Cooperation of Egypt, Ghada Alwali, Minister of Social Solidarity of Egypt, and Wissam Fattouh, Secretary General of the UAB.
In his speech, Al-Jarrah applauded the role the UAB plays in enhancing the reputation of Arab banks around the world, promoting a better understanding of the strength and integrity of these institutions in an effort to alleviate the economic sanctions imposed on some of the Arab states. He also lauded the UAB’s efforts to harness the capabilities of the Arab banking sector to drive greater social and economic development — calling upon banks in the region to unite and align their efforts, encouraging them to invest their capabilities within the Arab region.
Al-Jarrah expressed his concerns over the turmoil currently taking place in the Arab world, with the region becoming overwhelmed with wars, conflicts, refugee crises, terrorism, and struggles of every kind – leading to the destruction of cities and demolishment of infrastructure, not to mention the incredible toll this has had on the economies of Arab states. As the region finds itself shrouded in uncertainty and as it struggles to find peace and stability, Al-Jarrah said peace ceases to become an achievement, but rather a responsibility for governments and key political and economic powers, including the banking sector. As a pillar of the economic landscape, the banking sector can be a key contributor to the peace process by taking an active role in restoration and rebuilding efforts, as well as helping to boost the economy by capitalizing on its financial and human resources.
Al-Jarrah also noted that the banking sector enjoys an international reputation for being trust-worthy and credible, largely due to its adherence to international practices and standards.
Other factors which have contributed to this reputation include the sector’s continued commitment to remaining current with all the latest financial and technological innovations, as well as the industry’s dedication to investing in its human capital and building capacities, in order to empower these talents to lead the development process.
Within this context, Al-Jarrah noted that available data has shown that the Arab banking sector’s assets have surpassed USD 3.3 trillion, and that combined deposits have reached USD 2.06 trillion, whilst loans have exceeded USD 1.7 trillion. He also pointed out that the combined assets of Arab banking institutions, which number at about 500 institutions, are valued at about 109% of the GDP and exceed the total value of the Arab economy.
Addressing the conference in his opening statement, Al-Jarrah said: “Through this conference today, the Union of Arab Banks is looking to explore the possibility of establishing an international Arab banking lobby, stemming from the Union’s commitment to promoting financial stability and economic cohesiveness despite the political and security challenges the world is currently facing. Key amongst these challenges is the drop in oil prices to historical lows, which has resulted in over USD 360 billion in losses for the oil-dependent GCC states, not to mention the negative impact this has had on economic growth rates across the entire Arab region.”
Al-Jarrah further warned against the consequences of the migration of domestic capital.
He also warned against the economic, political and technological dependency that is incurred and exacerbated due to foreign debt, particularly in cases where borrowing countries are subjected to economic and political decisions which benefit creditor nations, and which lead to censorship and interference in internal affairs in some form or another.
According to Al-Jarrah, the integration of Arab financial institutions into the international financial system puts the former at risk of being frozen by Western governments, as has already happened with several Arab nations.
In his closing words, Al-Jarrah thanked Prime Minister Tammam Salam, represented by Deputy Prime Minister and Minister of Defense Samir Moqbel, for his patronage of the conference. He further praised the Lebanese Capital of Beirut for always welcoming its Arab and International guests with open arms, lauding its willingness to always offer a friendly and fertile environment for open dialogue of all kinds.
Al-Jarrah concluded by wishing all participants success in addressing the conference topics with utter transparency and objectivity, in an effort to set the groundworks for the establishment of an Arab banking lobby dedicated to building a better future for the economies of Arab states.
Al-Jarrah also announced that the UAB will be holding its next conference under the title: “Investing in Palestine”, which is set to take place during the first week of December 2016 in the Jordanian capital of Amman. This conference seeks to highlight the urgent need to mobilize all Arab banking powers to strengthen the Palestinian economy and its banking sector.
Over a period of two days, the “Lobbying for Better Arab — International Banking Cooperation” conference discussed a number of topics which addressed various sensitive, important and relevant economic issues. Attended by a number of key influential figures, decision makers and experts, the conference also honored a number of prominent Arabic economic figures.
One of the main discussion topics on the conference program was “The effects of international and Arab political developments on the banking sector”, which explored the implementation of laws and regulations based on political and financial objectives, as well as the impact of terrorism, tax evasion and money laundering on the banking industry.
The discussion also touched upon the need to create an Arab banking consortium and how to establish international trust in it. Additionally, participants addressed the role of the Arab banking sector in financing economic and financial industries within the context of the law, as well as the implementation of financing policies that focus on economic sectors, and finally the impact of international legislation on the financing policies of Arab banks.