If anyone out there doubts the arrival of Islamic Finance on the international scene they need only to refer to the September 22nd issue of the Weekend Financial Times. The entire cover of the section was devoted to Islamic Finance as a bridge connecting the West with the Muslim World. The article was entitled The Wealth Issue: Make money, not war and focused much of its coverage on the activities of Deutsche Bank’s up and coming Islamic Finance practice led by Geert Bossuyt. The discussion juxtaposing Mr. Bossuyt’s Belgian Catholic heritage was telling in that Mr. Bossuyt revealed how working in Islamic Finance for him has served to make him more respectful for Islamic culture. Indeed I would be hard pressed to believe that the industry has not had the same effect on scores of bankers and financial professionals around the world. I can personally testify to discussions of the ethical and just nature of Islamic Finance which I witnessed at the IIFF in Istanbul in September 2005. These discussions were largely carried by non-Muslim financial professionals.
The FT article also mentioned some of the usual criticisms of the industry such as the high fees charged by Shari’ah scholars and the suspect nature of Islamic finance transactions as well. But these debates are far from over. What seems to be more interesting in the immediate term are 1) the cultural pride the industry is providing to all types of Muslims worldwide, 2) the possibility to bring Islamic finance products and services to a wider audience – Muslim and non-Muslim, and 3) the shift in financial strategies by companies who recognized the markets demand for such structures.
The market speaks. It speaks to banks, corporations, and consumers alike enabling a circulation of funds that creates jobs and funds billions in development projects each year. A recent article in Gulf News also illustrates the recent rise in Islamic finance offerings and expectations for their growth in the near future.
In the end what we can walk away with from such news is the knowledge that the dynamic nature of the industry is creating ripples across the global markets. Much like the fabled Silk Road centuries ago, it cuts across borders and develops ties of trust in a globalized world among cultures that often live in fear or suspicion of each other in the shadow of 9/11. What we must continue to ponder is the industry's future direction in staying true to Islamic norms of economic justice and equity as it continues to grow.
It's great to see the idea of Islamic Finance assuming a wider audience. It's also a positive that we see a desire for better suited Islamic Finance instruments that can be incorporated in various mediums. The push has to be for increased vigorous discourse on part of the scholars and wider implementation. That means that not only do scholars with a grounding in Islam and Economics have to get involved, we need a lot of people who have gone through finance and are experts in their related fields to enter the discourse and to really "get their hands dirty" in order to promote steps in positive directions.
Posted by: Haseeb Chowdhry | October 31, 2006 at 12:20 PM