PROBLEM: We are counting the days.
‘Don’t count the days, make the days count.’ Muhammad Ali.
It seems we, the Muslim Ummah, have been waiting, wishing and praying for the return of the Golden Age glory, where we were the world’s benchmark for today’s world: science, math, engineering and so on. While we suspend ourselves in trance of inertia, the non-Muslim world grows, develops and multiplies on economics, finance, technology, etc., and we, Muslims, just multiply and use our raw numbers (2 billion, but many live on less than $1/day) as a carrot to entice non-Muslims to serve our increasing consumption patterns.
Where we came from: During the Islamic Golden Age, from mid-7th century to mid-13th century, Muslim traders established one of the largest physically and geographically connected empires in history of mankind. The people in the new-land received the Muslim traders with initial skepticism, but came to accept and embrace them because their products were ethical, and the manner of their business dealings and transactions was fair and just.
The social media’s role in markets to virtually connect, share content and undertake e-commerce is well documented, and all powered by increasing internet penetration and mobile phones. Today, hundreds of Millions of Muslims, from Generation ‘X’ and ‘Y’ to Millennials, are on-line, via desktops, tablets, and mobile phones, and are adopting technology for new business and connection models. Today, the ‘Google ‘Mufti,’ meaning Google search, is replacing the actual Mufti, and is bringing information, services, and products to their ‘thumbs.’
But, where are the ideation, innovation, patent, trademark and copyright registrations, and risk capital for ventures that build knowledge base societies coming from? Don’t look to the East, as we have 57 Muslim countries, where 22 are the least developed in the worlds, and, unfortunately, more known for corruption (Transparency International’s bottom dwellers are predominantly Muslim countries), capital flight, brain drain, and so on.
[But, our Muslim country sovereign wealth funds, which are funds for future generations, are buying trophy assets, like landmark buildings/hotels in the non-Muslim world, to fulfill their mandate for who/whom? Cannot just be about financial returns from distant lands, but also building the local physical infrastructure that generates, say, jobs.]
The financial sector in Muslim world, as a whole, is based on collateral based finance, as there is a large bias towards debt (includes Sukuk) over equity and risk capital, its financial system linked to conventional interest rates (LIBOR), large part of GDP is linked to depleting natural resources (oil, palm oil, agriculture, etc.), it’s a net importer of almost everything and exporter of talent (youth), capital flight and depleting natural resources, etc.
The Muslim youth in the non-Muslim world are held hostage to the vagaries of the local election year cycles as they (plus halal and Islamic/shariah finance) become the boogeyman to get votes (Trump), job opportunity challenges (France, UK, etc), lack of access to finance to fund their ideas, perception that they will not or cannot do better than their parent generation, and so on.
Someone once said, ‘there is no romance without finance,’ it carries over to ‘there is no inclusion, empowerment and advancement (dignity?) without finance.’ It’s about hope, the same ‘hope’ (mantra) that Barak Obama rode onto to become the first African American President in 2008. It’s about opportunity, and the opportunity to make a difference (uplift) in their lives. But, the opportunity is based on merit, that they and their ideas will be stress tested to get funding.
The Muslim youth want an equal chance to tap funds and mentored/coached in incubators/accelerators that will allow them to build their problem solving and/or gap filling ideas, and, the ones with market traction, will be further funded for scaling.
Developed country based VCs, beholden to their western limited partners (LPs), invest not only in their home countries, but also other developed countries and (with criteria focus demographics to tap consumerism in) emerging markets like India, China, Thailand, Vietnam, Philippines, etc., but very few invest in Muslim countries, ex Indonesia (because of demographics). Furthermore, there is very little VC in the Muslim world, Islamic VC is usually reserved as conference topic, hence, what is a Muslim youth to do in places like UK or their home Muslim countries.
[Its not just about the venture money, which is limited, its also about the eco-system that must be established, and, one area requiring much emphasis is term/concept ‘failure.’ Some/many entrepreneurs [founders] will fail, 2-3 out of 10 are typically successful, but it needs to be viewed as a learning experience. Microsoft co-founder, Bill Gates, said, ‘success is lousy teacher, it seduces smart people into thinking they can’t lose.’ Thus, the lesson from failure is learning, as you will not make the same mistake again.]
The availability of alternative finance, read VC, is extremely limited in the Muslim world and to young Muslims in the west wanting funding for verticals in the Muslim lifestyle marketplace. The ‘family, friend and foe’ sources are limited/not available for venture funding, crowd funding has yet to get traction, P2P lending (if available) is more [micro] SME centric, and so on.
The conversation cannot stop here, as I’ve described, at high level, the ‘known know.’ What matters is what is the next step to ‘make the days count’ that result in Muslim youth inclusion, empowerment and advancement.
Malaysia, to my mind a de-facto G-20 country if not in GDP but vision, has seen the future of Muslim youth and has started to do something about it with important undertakings like CRADLE, MAGIC, etc., where risk capital is available with vetting conditions. She will build on the foundation, and with more initiatives and more funding.
A few success stories, read exit, like Jobstreet.com, Grabtaxi, etc., will not only spur more founders, but also result in more accelerators/incubators, universities (hopefully INCEIF), bring foreign VCs (which have been going to Indonesian, Thailand, etc.), expand the local VC (in terms of more money from LPs), etc.
Memo to Islamic finance and banking: interesting opportunity awaits to help build a knowledge base economy and lead conventional finance in Malaysia.
So, do we continue to wait or do we make the ‘days count?’
I hope to do something about it, but that conversation is for another day.