WIEF sees signings of 4 preliminary deals for $3b

The first day of the fifth World Islamic Economic Forum (WIEF) saw Monday the signing of four memorandum of agreements (MoAs), worth about US$3 billion.

MoA is a term introduced during the WIEF event to help cement outline project agreements  that are more than half concluded.

“These agreements amount to more than $3 billion,” said State Minister for State Enterprises Sofyan Djalil, who is also the co-chairman of the Indonesian national organizing committee of the WIEF.

“However, the realization of these agreements are still dependant on further studies and competitive tenders. It can be higher or lower than the estimated value,” he told reporters during the three day forum.

The first MoA is between Bank Muamalat, the country’s largest sharia financing provider, with National Commercial Bank Saudi Arabia on strategic business collaboration on remittance services, and Islamic Payment System Sdn berhad with PT Pos Indonesia on an Islamic payment system network designed to segregate retail money into sharia compliant funds and those that do not  comply with Islamic principles.

The second MoA, estimated at $350 million, is between national flag carrier PT Garuda Indonesia and Dubai Aerospace Enterprises (DAE), for the sale and leaseback of eight new B737-800 aircraft.

The third signing, covering two landmark G-to-G agreements estimated to be worth $1 billion, is between Indonesia’s East Kutai Regency of East Kalimantan province and the United Arab Emirates’ (UAE) Ras Al Khaimah (RAK) Investment Authority, for social and economic programs for the region.

The fourth signing, estimated at $1.7 billion, is between state oil and gas firm Pertamina, the ETA Star Group Dubai, and Itochu Corporation of Japan, to upgrade Pertamina’s Balikpapan refinery.

“The projects that we signed are more than 50 percent concluded, and we hope that these projects and co-operation will have a snowballing effect,” said Sofyan.

He said Middle East countries’ investments in Indonesia for the last six years have been substantial, and the  forum shows that Middle East countries are now looking seriously at investment in Indonesia.

More than 1,557 people, including 1,395 delegates, 85 speakers and reportedly 12 heads of state from 38 countries attended on the first day.

Ebrahim Patel, the chairman of Minara Chamber of Commerce and Industry in South Africa, said that this had been the largest WIEF since its inception in Malaysia in 2005.

“The scope of the WIEF  has gone beyond the Organization of Islamic Conference (OIC) nations, it has reached out to non-muslim and western countries which are now creating platforms where interaction between muslim and non muslim businesses can take place,” he said. “It’s not just a talkshop it’s an action and project oriented forum,” he added.

The WIEF was first formed in 2003 during the 10th OIC Summit, and has both corporate and individual members.

WIEF organizes global and regional forums, with the aim of fostering partnership s between Muslim entrepreneurs and between Muslim and non-Muslim businessmen. The 4th WIEF was held last May in Kuwait.

At the Forum Muslim countries are promoting increased trade among themselves up to 25 percent in the next seven years to make up for a decline in their traditional markets due to the global crisis.

The Muslim countries’ share in global trade is about 7 to 8  percent, while their intra-trade has risen  to around 13 percent, as compared to only about four percent in 2004, when the WIEF  was started.

They account for 19 percent of the world’ population, but only 6 percent of its income.(The Jakarta Post)