Thursday, September 06, 2007

Christian business practices similar to Islamic business practices, Islamic finance can help with social development

Islamic microfinance could be very profitable, as well as successful in reducing poverty according to a speaker at a conference in Bahrain. The Islamic Development Bank wants to "standardise and regulate" the collection of zakat. This would be a mistake, I believe, and would hamper effective Islamic microfinance because it would concentrate funding in IDB-supported institutions, which may not be able to create the most effective model. Allowing individual Muslims to distribute their zakat to organizations that are able to use zakat correctly keeps organizations efficient and innovative (within the bounds of the Shari'ah).

The Financial Times has a story about a growing number of Western executives who want to bring their (Christian) faith into the workplace. The description of how Christianity fits in with capitalism overlaps with many of the restrictions in the Qur'an and Sunna:
Christians who look on capitalism as an embodiment of New Testament principles - of justice, individual freedom and responsible risk-taking - might see now as a good moment to speak up.

The Accounting & Auditing Organization of Islamic Financial Institutions (AAOIFI) secretary-general Dr. Mohamed Alchaar draws a distinction between Islamic financial products and Islamized financial products with a distinct preference for the former. He said, "We have to differentiate between what we call Islamic products and what we call Islamised products - products that were made Islamic. These [the latter] are conventional products made into Islamic products. This type of product I believe is not the right way to go". He followed by saying that Islamization of financial products, the "taking of conventional products and fitting things around it [...] and calling them Islamic is not sustainable".

International Islamic Finance Market chief executive Ijlal Ahmed Alvi believes it will take five years to integrate the GCC and non-GCC sukuk markets due to different standards and a lack of transparency in existing sukuk.

Islamic finance should focus on social development in addition to economic growth.

Adeem Investment, the firm which bought Aston Martin earlier this year, wants to open up an Islamic bank in the U.K.

Islamic financial services have been hampered in Thailand due to tax rules and a lack of understanding about Islamic finance. Thailand plans on working with its southern neighbor Malaysia on issuing sukuk to fund up to $50 billion (1.63 trillion Thai baht) infrastructure projects.

1 comment:

S. said...

I think Dr. Alchaar has just pointed out again what Prof. Gamal says since years. Muslims must not islamize all conventional products and consider themself as special. They must start from the scratch and develop genuine islamic products.

Will visit IHI again.