Islam’s Financial Power

[AGENDA21]

Among numerous significant current events that occurred in the past couple weeks, there was one that received little coverage by the press. It has to do with the emergence of an Islamic financial system set to contend with the Anglo-American, European and Asian systems. The fact that a principal voice supporting this development came from within Asia adds its own unique sense of interest to this emerging phenomenon.

On February 7, the governor of the Central Bank of Malaysia, Dr. Zeti Akhtar Aziz, opening the Second International Research Conference on Islamic Banking, in Kuala Lumpur, called for the building of a robust Islamic financial system. In her keynote address Dr. Aziz stated, “In the recent decade, the Islamic financial system has experienced remarkable growth and transformation, demonstrating its potential as a competitive form of financial intermediation. Today, Islamic finance represents a multi-billion-dollar industry with a comprehensive range of products and services, serving a broad spectrum of consumers and businesses that extends beyond the Muslim world. …

http://www.thetrumpet.com/index.php?page=article&id=2048

[ayeshahaqqiqa]

1. What the article doesn't tell you about Sharia

Here's a couple of paragraphs from the article, followed by my comments:

It is the observance of sharia principles, bound up in the practice of the religion of Mohammed, that increasingly separates the practices of the developing Islamic financial world from those of the longer-established financial systems of the West and the Far East. This is what separates this emerging system of banking and finance from that of Anglo-America, the European Union and greater Asia: It is based on the religious principles of the Islamic world. As Dr. Aziz repeatedly underscored in her keynote address, “Underpinning the success of Islamic banking system is the strengthening of research and intellectual capacity in the sphere of finance and sharia.”

Thus, global financial markets are increasingly seeking access to this Islamic market, only to find that their institutions must abide by Muslim sharia law in the conduct of their business with Islamic financial entities.



What they don't spell out in the article is what part of Islamic law must be followed. As I understand it, interest is forbidden-very much like the usury laws the Christians imposed in the Middle Ages. I know that some Westerners like to bandy about terms like Sharia in hopes that their readers will be scared into thinking all it is about is veiling women and cutting off the hands of thieves. In this case, I am certain it relates directly to charging interest on money. Here's what the Qur'an says about usury:

Surah 2: 275-276

Those who devour usury
Will not stand except
As stand one whom
The Evil One by his touch
Hath driven to madness.
That is because they say:
"Trade is like usury."
But Allah hath permitted trade
And forbidden usury.
Those who after receiving
Direction from their Lord,
Desist, shall be pardoned
For the pst: their case
Is for Allah (to judge);
But those who repeat
(The offence) are Companions
Of the Fire; they will
Abide therein (forever)

Allah will deprive
Usury of all blessing.
But will give increase
For deeds of charity;
For He loveth not
Creatures ungrateful
And wicked.


Notes:
Usury is condemned and prohibited in the strongest possible terms. There can be no question about the prohibition. When we come to the definition of usury there is room for difference of opinion....as the Prophet left this world before the details of the question were settled....

Owing to the fact that interest occupies a central position in modern economic life, and specially since interest is the very life blood of the existing financial institutions, a number of Muslims have been inclined to interpret it in a manner which is radically different from the understanding of Muslim scholars throughout the last 14 centuries and is also sharply in conflict with the categorical statements of the Prophet (pbuh). According to Islamic teachings any excess on the capital is riba (interest). Islam accepts no distinction, insofar as prohibition is concerned, between reasonable and exorbitant rates of interest, and thus what came to be regarded as the difference between usury and interest; nor between returns on bonus for consumption and those for production purposes and so on. (Bold type mine)

From The Meaning of the Glorious Qur'an-Abdullah Yusuf Ali

[tatertop]

2. thank you, I had forgotten about that

[elfin]

3. I think their money people have a "getaround"

for the usury ideal. Read it somewhere - no link - but I think it has to do with sheltering in other accounts which do not abide by sharia and then turning a blind eye. It looks to me like speculation in stocks/bonds is not covered.

Where money is concerned no religion has real power - other than that of "suggestion" - and there is ALWAYS a way to make big bucks and be "right" wilth Allah or whatever to rationalize making a profit.

The same with early Christianity. Always can find a willing partner to make things happen - ex. early Jewish banks ala Rothchild (sp?) in Medieval times.

[ayeshahaqqiqa]

4. I'm not saying that they won't try to "get around" it,

but it plainly states in Qur'an that usury is forbidden. If you read the notes from the translation of the Qur'an I have, you can see some hints of controversy. But I bet that if they have gotten around it, it is in a way that is foreign and unusual to Western bankers-aye, there's the rub! As you say, it could be that speculation is involved--let's go one step further and say what if such speculation is illegal under Western banking laws? That would be a real obstacle, wouldn't it? Our problem is that the fine points of what is causing the problem are not addressed in the article and so we are reduced to speculation ourselves (pardon the pun).