Tuesday, January 11, 2011

Responding to the anti-Islamic finance critics

From my newsletter (subscribe to the left):
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.


David Loundy said...


The Bigot Brigade will never be appeased-- they are not looking for factual evidence with which to refine their viewpoints. They selectively chose and interpret facts to conform to their worldview.

As long as there is a religious zealot in the press, there will be anti-zealots to point to that person and say that that zealot speaks for all adherents to the same religion. Pretty much any religion formed in a different time will have elements that are do not resinate with modern social beliefs and views of political correctness.

Simple test-- Google something like "Islamic attrocities." Then Google "Biblical attrocities." Same list. Then compare to how many Jews, Christians, or Muslims actually accept or follow those beliefs. Then ask the Bigot Brigade how Islamic finance practitioners are, by definition, committing treason, but not most of the rest of the U.S. poulation...


Blake Goud said...

I agree with your point and I agree that they cannot be swayed by facts or analysis. However, they get much more attention from media outlets like Fox News and other sources whose viewers may not all be as fervent believers in that point of view.

The facts and analysis (and more nuanced explanation of Islamic finance that is lacking) can reach those people and at least add another perspective. However, these people will not go searching for more information to balance what they are hearing in the media and so Islamic finance has to go out of its way to reach more people.

These people may not be natural consumers of Islamic financial products and may not ever be consumers. However, they have an impact through their impact on the general attitude towards Islamic finance, particularly in non-Muslim countries. Some may even be involved with the regulatory bodies that can either assist or hamper Islamic finance (see: South Korea and France, for example).

Therefore it is imperative to present an alternative narrative to the "true believers'" opposition to Islamic finance.