Thursday, July 12, 2007

Forbes' critique of Islamic finance & the "Dubai of Southeast Asia"

Forbes has an article on Islamic finance in which it presents many of the critiques of Islamic finance. However, the title, "Don't Call It Interest" mirrors the theme of the article which suggests that, because there are many practices in Islamic finance which mirror conventional finance (or even are benchmarked to an interest rate), that the whole industry is a farce. It is a shame that the article focuses on "Islamic hedge funds" and ignores the resemblance between Islamic finance & socially-responsible/ethical finance and the concern for equity and fairness in business transactions. Forbes could have used the article to present a look at the positive and negative attributes of Islamic finance but instead saw a few products which may be considered doubtfully Shari'ah-compliant and used these to condemn the entire industry as an inefficient exercise in financial engineering.

Brunei wants companies to issue sukuk in order to boost its bid to be a hub of Islamic finance. The Brunei Times describes hopes of becoming to the 'Dubai of Southeast Asia'.

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