I am always hesitant to raise issues of politics as it connects with Islamic finance, but there are times when politics and finance connect in an indirect way that necessitates some observation. Islamic finance has become one front in a war of words with critics alleging that it is part of a nefarious plot; one critic described "Sharia[-compliant] finance is jihad with money". The rhetoric has been heated for years with many of the same (debunked) arguments used for why Islamic finance is somehow dangerous to the West and the United States in particular (perhaps I see a disproportionate share in the US because that is where I am based).
Efforts to place Islamic finance on level ground with conventional finance in France and South Korea have faced hurdles placed by critics of the industry (or the politicians who share their views). In the US, one group even sued the US government for its bailout of AIG because of AIG's takaful unit. However, the rhetoric against Islamic finance has stayed as just rhetoric.
With the recent tragic assassination in Arizona, however, I think the Islamic finance industry--particularly in the West--needs to consider how to improve its outreach and better explain what it is and why it exists, lest the overheated rhetoric combined with general ignorance lead to an attack on Islamic finance. I hope that this message can soon be written off as just my response to a shocking event, but the general political rhetoric that is receiving a second look in response to Arizona is not too far removed from some of the "anti-Islamic finance" crowd. They insinuate that Islamic finance involves financing of violence and even claim that it is part of a religious war, creating an "us-versus-them" mentality that we see can lead to tragic results.
The only reasonable response to this rhetoric is rational explanation of Islamic finance to educate people about what it actually is because that is the only antidote to the spread of incendiary falsehoods in any situation. It is our responsibility as people working in, researching and writing about Islamic finance to educate those we come into contact with about Islamic finance. As Mushtak Parker described, there are three types of people involved with Islamic finance: the diehard optimist, the fairweather fans and the hard-working pragmatists "who believe in Islamic finance not merely because of their faith traditions (not only Islam) but because they believe and have proven that Islamic finance is eminently workable, here to stay and a force for good in economic development, shareholder value and wealth creation and effecting socio-economic justice."
Most of the people with whom I speak with about Islamic finance fall into that third group. They work behind the scenes largely within the Islamic finance industry. But now, I think, there has to be a broader focus. Continue to work within the industry to improve it, but also educate the people who respond with a puzzled look when you mention Islamic finance.
Tuesday, January 11, 2011
Responding to the anti-Islamic finance critics
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