Showing posts with label socially. Show all posts
Showing posts with label socially. Show all posts

ISLAMIC TRADITIONS AND THE FEMINIST MOVEMENT: CONFRONTATION OR COOPERATION?

Whether living in the Middle East or Africa, in Central Asia, in
Pakistan, in Southeast Asia, or in Europe and the Americas, Muslim
women  tend to view the feminist movement with some apprehension. 
Although there are some features of the feminist cause with which we
as Muslims would wish to join hands, other features generate our
disappointment and even opposition.  There is therefore no simple or
"pat" answer to the question of the future cooperation or competition
which feminism may meet in an Islamic environment.

There are however a number of social, psychological, and economic
traditions which govern the thinking of most Muslims and which are 
particularly affective of woman's status and role in Islamic society.  
Understanding these can help us understand the issues which affect
male  and female status and roles, and how we should react to
movements which  seek to improve the situation of women in any of the
countries where  Muslims live.

THE FAMILY SYSTEM: One of the Islamic traditions which will affect the
way in which Muslim women respond to feminist ideas is the advocacy in
Islamic culture of an extended rather than a nuclear family system. 
Some Muslim families are "residentially extended" - that is, their
members live communally with three or more generations of relatives
(grandparents, parents, uncles, aunts, and their offspring) in a
single building or compound.  Even when this residential version of
the extended family is not possible or adhered to, family connections
reaching far beyond the nuclear unit are evident in strong
psychological, social, economic, and even political ties.  Mutual
supports and responsibilities affecting these larger consanguine groups
are not just considered desirable, but they are made legally incumbent
on members of the society by Islamic law.  The Holy Quran itself
exhorts to extended family solidarity; in addition it specifies the
extent of such responsibilities and contains prescriptive measures for
inheritance, support, and other close interdependencies within the
extended family.[1]

Our Islamic traditions also prescribe a much stronger participation of
the family in the contracting and preservation of marriages.  While
most Western feminists would decry family participation or arranged
marriage as a negative influence because of its apparent restriction
of individualistic freedom and responsibility, as Muslims we would
argue that such participation is advantageous for both individuals and
groups within the society.  Not only does it ensure marriages based on
sounder principles than physical attraction and sexual infatuation,
but it provides other safeguards for successful marital continuity. 
Members of the family provide diverse companionship as well as ready
sources of advice and sympathy for the newly married as they adjust to
each others' way.  One party of the marriage cannot easily pursue an
eccentric course at the expense of the spouse since such behavior
would rally opposition from the larger group.  Quarrels are never so
devastating to the marriage bond since other adult family members act
as mediators and provide alternative sources of companionship and
counsel following disagreements.  The problems of parenting and
generational incompatibility are also alleviated, and singles clubs
and dating bureaus would be unnecessary props for social interaction. 
There is no need in the extended family for children of working
parents to be unguarded, unattended, or inadequately loved and
socialized because the extended family home is never empty.  There is
therefore no feeling of guilt which the working parent often feels in
a nuclear or single-parent organization.  Tragedy, even divorce, is
not so debilitating to either adults or children since the larger
social unit absorbs the residual numbers with much greater ease than a
nuclear family organization can ever provide.

The move away from the cohesiveness which the family formerly enjoyed
in Western society, the rise of usually smaller alternative family
styles, and the accompanying rise in individualism which many
feminists advocate or at least practice, are at odds with these
deep-rooted Islamic customs and traditions.  If feminism in the Muslim
world chooses to espouse the Western family models, it should and
would certainly be strongly challenged by Muslim women's groups and by
Islamic society as a whole.

INDIVIDUALISM VS. THE LARGER ORGANIZATION: The traditional support of
the large and intricately interrelated family organization is
correlative to another Islamic tradition which seems to run counter to
recent Western trends and to feminist ideology.  Islam and Muslim women
generally advocate molding of individual goals and interests to accord
with the welfare of the larger group and its members.  Instead of
holding the goals of the individual supreme, Islam instills in the
adherent a sense of his or her place within the family and of a
responsibility to that group.  This is not perceived or experienced by
Muslims as repression of the individual.  Other traditions which will
be discussed later guarantee his or her legal personality.  Feminism,
therefore, would not be espoused by Muslim women as a goal to be
pursued without regard for the relation of the female to the other
members of her family.  The Muslim woman regards her goals as
necessitating a balance with, or even subordination to, those of the
family group.  The rampant individualism often experienced in
contemporary life, that which treats the goals of the individual in
isolation from other factors, or as utterly supreme, runs against a
deep Islamic commitment to social interdependence.

DIFFERENTIATION OF SEX ROLES: A third Islamic tradition which affects
the future of any feminist movement in an Islamic environment is that
it specifies a differentiation of male and female roles and
responsibilities in society.  Feminism, as represented in Western
society, has generally denied any such differentiation and has
demanded a move toward a unisex society in order to achieve equal
rights for women.  By "unisex society," I mean one in which a single
set of roles and concerns are given preference and esteem by both
sexes and are pursued by all members of the society regardless of sex
and age differentials.  In the case of Western feminism, the preferred
goals have been those traditionally fulfilled by the male members of
society.  The roles of providing financial support, of success in
career, and of decision making have been given overwhelming respect
and concern while those dealing with domestic matters, with child
care, with aesthetic and psychological refreshment, with social
interrelationships, were devalued and even despised.  Both men and
women have been forced into a single mold which is perhaps more
restrictive, rigid and coercive than that which formerly assigned men
to one type of role and women to another.

This is a new brand of male chauvenism with which Islamic traditions
cannot conform.  Islam instead maintains that both types of roles are
equally deserving of pursuit and respect and that when accompanied by
the equity demanded by the religion, a division of labor along sex
lines is generally beneficial to all members of the society.

This might be regarded by the feminist as opening the door to
discrimination, but as Muslims we regard Islamic traditions as standing
clearly and unequivocally for the support of male-female equity.  In
the Quran, no difference whatever is made between the sexes in
relation to God. "For men who submit [to God] and for women who submit
[to God], for believing men and believing women, for devout men and
devout women, for truthful men and truthful women, for steadfast men
and steadfast women, for humble men and humble women, for charitable
men and charitable women, for men who fast and women who fast, for men
who guard their chastity and women who guard, for men who remember God
much and for women who remember - for them God has prepared
forgiveness and a mighty reward" (33:35).  "Whoever performs good
deeds, whether male or female and is a believer, We shall surely make
him live a good life and We will certainly reward them for the best of
what they did" (16:97).[2]

It is only in relation to each other and society that a difference is
made - a difference of role or function.  The rights and
responsibilities of a woman are equal to those of a man, but they are
not necessarily identical with them.  Equality and identity are two
different things, Islamic traditions maintain - the former desirable,
the latter not.  Men and women should therefore be complementary to
each other in a multi-function organization rather than competitive
with each other in a uni-function society.

The equality demanded by Islamic traditions must, however, be seen in
its larger context if it is to be understood properly.  Since Muslims
regard a differentiation of sexual roles to be natural and desirable
in the majority of cases, the economic responsibilities of male and
female members differ to provide a balance for the physical
differences between men and women and for the greater responsibility
which women carry in the reproductive and rearing activities so
necessary to the well-being of the society.  To maintain, therefore,
that the men of the family are responsible for providing economically
for the women or that women are not equally responsible, is not a
dislocation or denial of sexual equity.  It is instead a duty to be
fulfilled by men as compensation for another responsibility which
involves the special ability of women.  Likewise the different
inheritance rates for males and females, which is so often sited as an
example of discrimination against women, must not be seen as an
isolated prescription.[3] It is but one part of a comprehensive system
in which women carry no legal responsibility to support other members
of the family, but in which men are bound by law as well as custom to
provide for all their female relatives.

Does this mean that Islamic traditions necessarily prescribe
maintaining the status quo in the Islamic societies that exist today? 
The answer is a definite "No." Many thinking Muslims - both men and
women - would agree that their societies do not fulfill the Islamic
ideals and traditions laid down in the Quran and reinforced by the
example and directives of the Prophet Muhammad, salallahu alehi
wasallam.  It is reported in the Quran and from history that women not
only expressed their opinions freely in the Prophet's presence but
also argued and participated in serious discussions with the Prophet
himself and with other Muslim leaders of the time (58:1). Muslim women
are known to have even stood in opposition to certain caliphs, who
later accepted the sound arguments of those women.  A specific example
took place during the caliphate of 'Umar ibn al Khattab.[4] The Quran
reproached those who believed woman to be inferior to men (16:57-59)
and repeatedly gives expression to the need for treating men and women
with equity (2:228, 231; 4:19, and so on).  Therefore, if Muslim women
experience discrimination in any place or time, they do not and should
not lay the blame on Islam, but on the un-Islamic nature of their
societies and the failure of Muslims to fulfill its directives.

SEPARATE LEGAL STATUS FOR WOMEN:  A fourth Islamic tradition affecting
the future of feminism in Muslim societies is the separate legal status
for women which is demanded by the Quran and the Shari'ah.  Every
Muslim individual, whether male of female, retains a separate identity
from cradle to grave.  This separate legal personality prescribes for
every woman the right to contract, to conduct business, to earn and
possess property independently.  Marriage has no effect on her legal
status, her property, her earnings - or even on her name.  If she
commits any civil offense, her penalty is no less or no more than a
man's in a similar case (5:83; 24:2).  If she is wronged or harmed,
she is entitled to compensation just like a man (4:92-93; see also
Mustafa al Siba'i 1976:38; Darwazah n.d.:78). The feminist demand for
separate legal status for women is therefore one that is equally
espoused by Islamic traditions.

POLYGYNY:  Although the taking of plural wives by a man is commonly
called polygamy, the more correct sociological designation is
polygyny.  This institution is probably the Islamic tradition most
misunderstood and vehemently condemned by non-Muslims.  It is one
which the Hollywood stereotypes "play upon" in their ridicule of
Islamic society.  The first image conjured up in the mind of the
Westerner when the subject of Islam and marriage is approached is that
of a religion which advocates the sexual indulgence of the male
members of the society and the subjugation of its females through this
institution.

Islamic tradition does indeed allow a man to marry more than one woman
at a time.  This leniency is even established by the Quran (4:3).[5]
But the use and perception of that institution is far from the
Hollywood stereotype.  Polygyny is certainly not imposed by Islam; nor
is it a universal practice.  It is instead regarded as the exception
to the norm of monogamy , and its exercise is strongly controlled by
social pressures.[6] If utilized by Muslim men to facilitate or
condone sexual promiscuity, it is not less Islamically condemnable
than serial polygyny and adultery, and no less detrimental to the
society.  Muslims view polygyny as an institution which is to be
called into use only under extraordinary circumstances.  As such, it
has not been generally regarded by Muslim women as a threat.  Attempts
by the feminist movement to focus on eradication of this institution
in order to improve the status of women would therefore meet with
little sympathy or support.


II. DIRECTIVES FOR THE FEMINIST MOVEMENT IN AN ISLAMIC ENVIRONMENT


What can be learned about the future compatibility or incongruity of
feminism in a Muslim environment from these facts about Islamic
traditions?  Are there any general principles to be gained, any
directives to be taken, by those who work for women's rights and human
rights in the world?

INTERCULTURAL INCOMPATIBILITY OF WESTERN FEMINISM: The first and
foremost principle would seem to be that many of the goals of feminism
as conceived in Western society are not necessarily relevant or
exportable across cultural boundaries.  Feminism as a Western movement
originated in England during the 18th century and had as one of its
main goals the eradication of legal disabilities imposed upon women by
English common law.  These laws were especially discriminatory of
married women.  They derived in part from Biblical sources (e.g., the
idea of man and woman becoming "one flesh," and the attribution of an
inferior and even evil nature to Eve and all her female descendants)
and in part from feudal customs (e.g., the importance of carrying and
supplying arms for battle and the concomitant devaluation of the
female contributions to society).  The Industrial Revolution and its
need for women's contribution to the work force brought strength to
the feminist movement and helped its advocates gradually break down
most of those discriminatory laws.

Since the history and heritage of Muslim peoples have been radically
different from that of Western Europe and America, the feminism which
would appeal to Muslim women and to the society generally must be
correspondingly different.  Those legal rights which Western women
sought in reform of English common law were already granted to Muslim
women in the 7th century.  Such a struggle therefore holds little
interest for the Muslim woman.  In addition, it would be useless to
try to interest us in ideas or reforms that run in diametrical
opposition to those traditions which form an important part of our
cultural and religious heritage.  There has been a good deal of
opposition to any changes in Muslim personal status laws since these
embody and reinforce the very traditions which we have been discussing. 
In other words, if feminism is to succeed in an Islamic environment,
it must be an indigenous form of feminism, rather than one conceived
and nurtured in an alien environment with different problems and
different solutions and goals.

THE FORM OF AN ISLAMIC FEMINISM: If the goals of Western feminism are
not viable for Muslim women, what form should a feminist movement take
to ensure success?

Above all, the movement must recognize that, whereas in the West, the
mainstream of the women's movement has viewed religion as one of the
chief enemies of its progress and well-being, Muslim women view the
teachings of Islam as their best friend and supporter.  The
prescriptions that are found in the Quran and in the example of the
Prophet Muhammad, salallahu alehi wasallam, are regarded as the ideal
to which contemporary women wish to return.  As far as Muslim women
are concerned, the source of any difficulties experienced today is not
Islam and its traditions, but certain alien ideological intrusions on
our societies, ignorance, and distortion of the true Islam, or
exploitation by individuals within the society.  It is a lack of an
appreciation for this fact that caused such misunderstanding and
mutual distress when women's movement representatives from the West
visited Iran both before and after the Islamic Revolution.

Second, any feminism which is to succeed in an Islamic environment
must be one which does not work chauvenistically for women's interest
alone.  Islamic traditions would dictate that women's progress be
achieved in tandem with the wider struggle to benefit all members of
the society.  The good of the group or totality is always more crucial
than the good of any one sector of the society.  In fact, the society
is seen as an organic whole in which the welfare of each member or
organ is necessary for the health and well being of every other part. 
Disadventagous  circumstances of women therefore should always be
countered in conjunction with attempt to alleviate those factors which
adversely affect men and other segments of the society.

Third, Islam is an ideology which influences much more than the ritual
life of a people.  It is equally affective of their social, political,
economic, psychological, and aesthetic life.  "Din," which is usually
regarded as an equivalent for the English term "religion," is a
concept which includes, in addition to those ideas and practices
customarily associated in our minds with religion, a wide spectrum of
practices and ideas which affect almost every aspect of the daily life
of the Muslim individual.  Islam and Islamic traditions therefore are
seen today by many Muslims as the main source of cohesiveness for
nurturing an identity and stability to confront intruding alien
influences and the cooperation needed to solve their numerous
contemporary problems.  To fail to note this fact, or to fail to be
fully appreciative of its importance for the average Muslim - whether
male or female - would be to commit any movement advocating
improvement of women's position in Islamic hands to certain failure. 
It is only through establishing that identity and stability that
self-respect can be achieved and a more healthy climate for both
Muslim men and Muslim women will emerge.

Six wedding Dawa considerations




Reprinted from DawaNet.com
Social gatherings are an ideal place to make Dawa, and a Muslim wedding is a great example of this. Weddings are places where non-Muslims can learn about one facet of Islam in a relaxed social atmosphere without feeling they are being preached to.
Here are some practical tips you can use to make Dawa at a Muslim wedding:
1. Make sure you explain some aspects of what will take place at the wedding beforehand.
How should a guest dress at a Muslim gathering? How do Muslims greet the bride and the groom? What kind of gift would be suitable?
These are just some of the protocol issues that may come up during the wedding and could cause surprise and/or embarrassment for non-Muslim guests who may not understand Muslim practices relating to gender interaction or modesty, for instance.
Politely explain to them some of these issues beforehand so they can feel prepared and comfortable at the wedding.
2. Seating arrangements for non-Muslim guests.
What is the Imam saying? What is the oily orange substance being served?
These are some questions that non-Muslim guests may have during the wedding. It would be a good idea to have a family member or a friend who is open-minded and knows their Islam to be sitting with your non-Muslim guests during the wedding to answer these kinds of questions.
Perhaps your non-Muslim guest and their designated host could be introduced to each other as they arrive at the wedding so they can sit together.
In most Muslim weddings, non-Muslims are generally given a separate table to sit at. It's a better idea to seat them on different tables where your designated host can properly take care of them and they can meet with more Muslims.
3. Provide brief written material about the marriage.
What is a Nikah? How will the marriage be conducted?
Print out this fact sheet on the marriage ceremony and make sure all guests have a copy. This will be a great educational and Dawa tool for all guests, Muslim and non-Muslim. Perhaps you can even print it out on fancy paper, decorate it and make it a keepsake of the wedding.
4. Make sure everything is translated.
Try to have the Imam or at least someone else who can do it, translate the Duas (supplications) and Khutbah (sermon) of the marriage for the benefit of non-Arabic speaking Muslims and non-Muslims. Maybe the Imam can even explain why so much of the marriage ceremony is being conducted in Arabic.
5. Ask the Imam to speak briefly about Islamic social life.
A short, wise speech by the Imam or someone else who is qualified to do it, on Islamic social life will give a broader understanding of marriage and family from an Islamic perspective. It is important that the speaker knows English well enough not to offend people's sensibilities in his or her choice of words. The speaker should be especially careful how he or she presents the role of the wife in an Islamic marriage. Too often, speakers at weddings have presented a Muslim wife's position as that of a doormat instead of a partner in a relationship of faith, love and compassion.
6. Be on time.
What could be the worse Dawa than this: you invite guests at 6 p.m. and you, the host, show up at 8 p.m. Please plan ahead to be on time. If you expect a delay, let your guests know what time is suitable to arrive at the wedding.

The Issue of Riba in Islamic Faith and Law

Perhaps one of the most difficult issues in Islamic concern for fairness in business dealings is its prohibition of business transactions that call for charging riba (usury and interest). Riba, in its Qur`anic meaning, means paying money for the use of money. Muslims have struggled with the problem ever since the Qur`an categorically denounced riba. From the Islamic perspective, with its bias towards fair distribution of wealth and social justice, the Qur`an's strictures against riba have implications for international political economy. The issue also confronts devout Muslim business people as they struggle to make their investments religiously and morally legitimate.
This essay will analyze the controversy around riba as a prime example of how Muslims engage in ethical reasoning about business practice. It will show that ethical judgements in Islam amalgamate cultural elements derived from the particular experience of Muslims living in a specific place and time, as verified by the timeless universal norms derived from the scriptural sources like the Qur`an and the Tradition (Sunna), which themselves possess common elements applicable to all humans as humans.
Although the business world today is moving towards globalization in which small businesses are going to be further marginalized, the paragon of business ethics in the Muslim world as well as the West remains a devout individual who exhibits unusual sense of ethical-religious responsibility towards the higher goals set by his/her religious teachings. To dismiss this dimension from discussions about the business world today is equivalent to saying that the highly technicalized business world is moving at a pace uncontrollable by human beings and that no human conscience is able to direct the moral consequences of wealth-generating enterprises, however exploitative or corruptive they might appear to morally conscious individual or group of individuals. The following case illustrates the ethical dilemma presented by the Qur`anic stricture against paying and charging interest in business dealings.
A Religious Ethical Dilemma for a Muslim Businessman
Mr. Kamaluddin, a highly successful businessman, was faced with an ethical dilemma of a religious kind when he bought his company some twenty-three years ago. At first he did not let the owner of the property know that he had an ethical and religious problem with a transaction that involved him paying interest, because he was concerned that the seller would have factored that interest into his selling price. So after Mr. Kamaluddin had negotiated the price, he told the owner that he make a down payment, and then cover the rest in installments over a period of time. However, he could not pay interest on the unpaid balance because that was not allowed by his religion. The owner suggested that the selling price be increased to cover the interest. Mr. Kamaluddin argued that it would amount to the same thing as paying interest and in good conscience he could not justify that. He also made it clear that if this were not acceptable then he would simply not proceed with the transaction. At this point, the owner agreed not to charge the interest. Mr. Kamaluddin finalized the deal and bought the business.
In this case the amount of the interest was not significant and the owner was not going to lose much money. Nevertheless, it is hard to predict what the owner would have done had the amount of the interest been significant. And because the stakes are often much higher, the prohibition on interest-taking presents serious problems to Muslim business people. While Mr. Kamaluddin had enough resources to make the down payment, those Muslims who don't, face a quandary. Either they would have to apply for a loan to an interest-charging bank or they would simply have to give up an opportunity to start a new business.
Conscience and social responsibility in Islam
Mr. Kamaluddin's case underscores one of the fundamental value differences in business practice between Muslims and their counterparts in the West, namely, the ethical status of interest related transactions. Religious rulings related to the charging, paying and taking of interest in Islamic legal tradition have been at the center of ethical deliberations among Muslims for many centuries. Around the world, mainstream Islamic opinion continues to regard interest as an impediment to social justice. As a result, the question of whether interest is a legitimate financial instrument or not remains an important issue of conscience. In the Islamic tradition, human acts have a direct impact upon the development of conscience, the source of determining the rightness or wrongness of human undertakings. The conscience must be constantly guarded against being corrupted. For when the conscience of individuals becomes corrupted as a result of neglecting ethical matters related to the production of daily sustenance, there remains no moral safeguard to prevent these individuals from engaging into more serious acts that would lead to the destruction of the very fabric of social relations founded upon divinely ingrained sense of justice and fairness.
Islam, as it developed in the regions inhabited by other monotheistic faiths like Judaism, Christianity and Zoroastrianism, shared an ethos of public order founded upon justice. It required the practice of a minimum of moral virtues intended to be a kind of "rule of life," to foster a sense of social responsibility. In the Islamic view, both reflection and intention must precede all human acts which infringe upon the spiritual and temporal well being of others. To guide such reflection and inform such intention, Islam has developed a cohesive body of ethical reflection. Islam, the third and last of the Abrahamic religions to emerge, literally means "submission to God's will". It was proclaimed by Muhammad (born 570 C.E.), the Prophet of Islam and the founder of Islamic public order during the 600s in Mecca, Arabia.
Along with certain rules, which were practical and material, temporary and external, Muslim jurists explicitly decreed various permanent restrictions designed to discipline both the body (rules about lawful foods and earning, about dress and public behavior) and the mind (prohibited subjects of thought and conversation that led to the corruption of conscience). In addition, Islam required certain expiatory works of charity to compensate for the sins of omission and commission. These works were intended primarily to inculcate a sense of social responsibility. Whereas the ritual acts, whether performed publicly in a group or privately, were the homage humankind paid to God and were intended to affect the conscience of the practicing believer, commercial engagements were closely tied to the notions of interpersonal justice and were intended to affect public behavior. In this latter sense, the rites are instruments provided by God for developing the conscience in the direction of greater social responsibility.
Islamic juridical discourse on the market
Islam required a good public order in which spiritual interests were organically related to individual material well-being. Hence the law of the marketplace was given almost equal weight with the regulations connected with acts of worship in the mosque. This emphasis on economic relations in the context of commercial markets was not suprising, given that Mecca was the most important trading center of western and central Arabia. Meccans played a dominant role in the creation of a culture that nurtured the cultivation and development of socioeconomic system based on Islamic justice.
The market mechanism is an integral part of the Islamic economic system because the institution of private property depends on it for its operation. It also provides the consumers to express their desires for the production of goods of their liking by their willingness to pay the price. But the profit motive that is essential for the operation of free enterprise, if not controlled, can also become a tool of greed and violate the Islamic goals of social and economic justice and equitable distribution of income and wealth. The strictures against usury in the Qur`an can be seen in the clear distinction Islam makes between legitimate trade with profit motive and unchecked individual greed to increase one's possessions manifold without engaging in precarious trade in a market economy. According to Muslim jurists:
The law in order for the people to benefit mutually permits buying and selling. There is no doubt that this can also be a cause of injustice, because both buyer and seller desire more profit and the Lawgiver has neither prohibited profit nor has He set limits to it. He has, however, prohibited fraud and cheating and ascribing to a commodity attributes that it does not possess.
The main concern of the Islamic public order was not so much collective interest as individual justice in transactions that had to be protected outside of close friendship and family ties. It was expected that, contrary to the claims of tribal kinship and noble family lineage that determined social relations in pre-Islamic Arabia, most human relations under Islam would take the form of contractual relations rather than be determined in advance by social status. Many provisions in the law attempted to back those who were weak in one way or another against the strong who might take advantage of them. While on the whole, faith in Islam constituted ten parts, only one part was related to the God-human relationship and claimed the status of a common universal obligation. The remaining nine parts were related to human relationships, and determined by contractual responsibilities and specific social and cultural experience.
Muslim juridical writings give detailed rulings related to the acquisition and disposal of private and business property and purchase and sale of merchandise. The underlying principle operative in market law is twofold: the autonomy of individual to own productive resources to further her or his economic interest, and the protection of the consumer from harm. The pursuit of individual economic interest was to be regulated within a communitarian ethic requiring the individual to take the competing interests of the community at large as morally binding. Therefore, any individual business undertaking seen to cause harm to the moral and spiritual fabric of the society was to be condemned and prohibited.
The protection of the consumer was regulated through the principle of non-maleficence (al-darar al-muhtamal). This principle required that resource-owners could not seek to cause harm to the buyers by using false information and other means to raise sales. Hence, deceptive advertising was regarded as morally wrong and legally punishable. The principle of public interest (maslahah) required that free mutual consent of the buyer and the seller be regarded as a necessary condition for any business transaction. The Qur`an provides the grounds for the ruling: "O believers, consume not your goods between you in vanity, except there be trading, by your agreeing together". Individual freedom in negotiating business transactions was recognized in the directive given by the Prophet: "Leave people alone for God provides them sustenance through each other". Thus freedom of enterprise leaves much of the production and distribution of goods and services to individuals or voluntarily constituted groups. However, even this otherwise absolute freedom was regulated by the legal principle of public interest that requires that faithful Muslims produce more good than harm.
The integration of ethics and law was most clearly worked out in Islamic economics. The need to regulate an economic system that would be compatible with Islamic concern for redistribution of wealth and social justice required Muslim jurists to resort to legal doctrines and practical rules where the validity of their rulings against certain forms of usury received judicious legal elaboration. The apparent meaning of those verses of the Qur`an that spoke about the prohibition of usury in a straightforward manner were developed through the legal principles and rules, case by case, to create the framework for a morally accountable financial exchange. The nature of this process of legal and ethical construction is taken up next.

Shari`ah and the Emergence of Principles from Cases
Islamic ethics, mediated through God's will, is an integral part of Islamic law: the Shari`ah. The Shari`ah is the divinely ordained blueprint for human conduct, which was inherently and essentially religious. It enjoys comprehensive scope, for it encompasses judgments of public interest and equity which link the overall prosperity of the community in this life and the next. The end of humanity is happiness, and this is attained fully through the rewards of God on the Day of Judgment for everything that humans do to improve the quality of spiritual and moral and material life of humanity.
Islamic jurisprudence (fiqh) was developed to determine normative Islamic conduct as detailed in the Shari`ah. The legal precedents and principles provided by the Qur`an and Sunna were used to develop an elaborate system of rules of jurisprudence. By the middle of the eighth century, Islamic jurists had developed and laid down a legal theory to allow a judge or a mufti to find out in all circumstances what was the legal and moral action. The two sources for deriving authoritative guidance were the Qur`an, the basic scripture of Islam, and the Sunna, the normative directives deduced from the Prophet Muhammad's own actions. Two further resources in Sunni law were provided by the consensus (ijma`) of the scholars of legal tradition, and by a method of analogical deduction (qiyas). Sunni jurists used qiyas to project a new ruling from a known ruling by using data furnished by the Qur`an and the Sunna. Al-Shafi`i (d. 820), a rigorous legal thinker, systematically and comprehensively linked these four sources to extend Shari`ah to cover all possible contingencies. In the Shi`ite jurisrudence, the methodology of their founding scholar and Imam Ja`far al-Sadiq (d. 748) allowed greater use of human reason in deriving the entire system of the Shari`ah. Shi`ite jurists perfected the principle of the correlation between a judgment derived from reason and the one promulgated by the Qur'an and the Sunna, thereby giving human intuitive reason a substantial role in deriving legal decisions at all times. The `rule of correlation' (qa`idat al-mulazama) in Shi`ite law allows the jurists to infer the rulings in the Shari`ah from the sole verdict of reason.
Legal scholars and other administrative officials exercising judicial powers usually issued judgments of public interest, convenience or similar considerations. Duties and right actions that were not mentioned in the Qur`an and Sunna were to be determined by the exercise of independent personal judgment of lawyers. As developed in the classical Islamic legal theory (usul al-fiqh), justifications in religious-moral action consists of a dialectic between judgments (fatawa) in specific cases and the generalizations derived from effective causes (`ilal) in cases in the light of which generalizations themselves are modified. Hence, to derive a specific ethical judgment - for example, that an act of distribution of surplus wealth among the needy is obligatory - is to confirm that it satisfies a certain description of the religious-moral concept of justice according to one's belief in social responsibility. Social responsibility as part of the generalizable command to be just could then be applied to other acts.
The criterion of social responsibility has made it necessary for Islamic jurists to nuance the stringency of moral rules. In contemporary Islamic thinking, human conduct is to be determined in terms of how much legal weight is borne by a particular rule, and whether a rule renders a given practice obligatory or merely recommended. For instance, bribery is ethically and legally forbidden. But if it becomes necessary under an unjust system in order to influence a decision leading to the betterment of the community, then Islamic law excuses it after a careful risk-benefit analysis. The underlying principle in deciding such cases was the proportion of benefit as compared to harm to the well being of the community. Some rules are categorical. For example, cases involving blatant moral-spiritual corruption are excluded from risk-benefit analysis. Another factor in determining the weight of a rule is whether it is to be enforced by penalties in the courts because it occurs in Muslim territory, or whether it is to be left to God's judgment in the hereafter because it occurs outside. Thus, for instance, transactions involving selling or buying of alcohol are regarded as illicit and punishable by the Shari`ah courts when they occur within Muslim communities. However, when a Muslim businessman living in the West sometimes has to entertain his non-Muslim clients with alcohol while abstaining himself, his action, although sinful in itself, is regarded as being beyond the jurisdiction of the Shari`ah court.
Reason and Revelation in Islamic Moral Reasoning
In recent years, attempts have been made to engage Muslim scholars in the ongoing debate in the area of business ethics in the West. At the center of this debate is the role of ethical principles and rules in the moral assessment of an action in Western thinking. Such assessment can be developed from at least four different perspectives: those of the agent, the act itself, the end, and the consequences. They offer different viewpoints about the meaning and nature of moral principles and rules as they are applied to different types of moral dilmmas. In fact, many disputes in applied ethics in the West stem from disputes about the generalizability and applicability of more than one of these normative principles that function as action-guides, categorizing actions as morally required, prohibited, or permitted. Moreover, there exists the great variety of principle-based approaches that focus on general principles as sources of rules, and rules that specify type of prohibited, required, or permitted actions before any particular judgments can be derived in cases dealing with questionable business practices.
While this conceptual apparatus is helpful, it does not enable Westerners to delineate the pattern of Islamic moral reasoning. Without adequate training in the Islamic legal sciences, especially legal theory, one cannot pinpoint the principles and the rules that Muslim jurists utilize to justify and assess moral-legal decisions within their own cultural environment. The process has combined revelation and reason. The convergence between the divine command that human beings must treat each other justly and the rational cognition of justice being good encouraged Islamic jurists to formulate specific moral-legal judgments first and then to search for principles that can be generalized and then applied to new cases. The method, refined over centuries, yields certitude in moral judgment. By working back and forth between legal doctrines and rules, on the one hand, and analogical reasoning based on paradigm cases, on the other, Muslim jurists are able to resolve ethical dilemmas that face the community in dealing with immediate questions about economic issues: banking, taking interest, advertising, and so on. The practical judgments or legal opinions, known as fatawa, reflect the insights of a jurist who has been able to connect cases to an appropriate set of linguistic and rational principles and rules that provide keys to a valid conclusion of a case under consideration.
This pattern of moral reasoning should not be seen as a lock-step deductive model. The Qur`an uses the word al-ma`ruf (the "commonly known" paradigms) for the generalized principles which must be inferred from concrete ethical practice of everyday life. It made no attempt to lay down a comprehensive moral system because it treated morality as "the known," al-ma`ruf. Al-ma`ruf, in the meaning of moral behavior in the Qur`an, signifies "goodness," a "good quality or action," gentleness in any action, or deed, of which goodness is known by reason and by the revelation." Muslim jurists have been working out practical ways of carrying out more efficient proceedings in view of the changed circumstances of commercial life, without setting aside the more idealistic provisions of the law as basic norms. The justification provided by these jurists was to argue that there is a correlation between "known" moral convictions and God's purposes as mentioned in revelation.
Market Ethics and the Charging of Interest
In general, it can be said that in every ethical situation Islamic juridical tradition seeks to address and accommodate the demands of justice and public good. Perhaps one of the most difficult issues to test the Islamic concern for fairness in business dealings was its early prohibition of business transactions that called for charging interest (riba). Often translated by "usury", this term in its Qur`anic meaning, refers to using money to buy the use of money. Muslims have struggled with the problem of interest ever since the Qur`an categorically denounced it, and have not achieved agreement among themselves. Some jurists have interpreted the Qur`anic prohibition to permit exceptions as cases required in different contexts. There have been a number of rulings issued at different times in the history of Islamic jurisprudence making a distinction between `usury' (riba) and `interest' to circumvent the categorical prohibition. Other scholars believe that there is a difference between Muslim and non-Muslim financial institutions, allowing Muslims to receive interest from the latter institutions while prohibiting it from the former.
This lack of unanimity reflects a common but misleading practice among Muslims: sweeping larger questions about the nature of divine revelation under the rug when it comes to addressing interest and usury and other major ethical problems exacerbated by the introduction of laissez faire economics. This uncritical approach to the normative sources has deep roots in the theology of revelation in Islam. Briefly stated, there are two major trends about the meaning and relevance of revelation for Muslims. According to one, Islamic revelation in its present form was `created' in time and space. As such, it reflects historical circumstances of that original divine command. According to the other view, revelation was `uncreated' and hence its current form is not conditioned by place and time. Most devout Muslims reject any hints that the interpretation of revelation reflects cultural or historical variables. In the wake of both quantitative and qualitative change in the modern Muslim economies, the question arises as to how far traditional readings of the revelation are relevant in assessing the negative and positive limits governing the present economic system? It is this critical theological question with drastic ramifications for the overall status of normative tradition that is usually swept under the rug.
Rather than peek further under this rug, I will consider some of this historical and theological issues connected with the institution of riba. At the time that the Prophet emerged in Mecca, transactions with a fixed time limit and payment of interest (riba), as well as speculations of all kinds, formed an essential element in the highly developed regional system of trade in Arabia. A debtor who could not repay the capital (money or goods) with the accumulated interest at the time it became due was given an extension of time in which to pay, but at the same time the sum due was doubled. The practice was prevalent during the early part of the Prophet's mission in Mecca before he migrated to Medina in 622 CE, where he denounced it. Like other social reforms the Prophet introduced into his growing community, the prohibition against interest was introduced in stages in the Qur`an. It began with a caution: "O believers, devour not usury (riba) doubled and redoubled, and fear you God." Later, , the prohibition was proclaimed in no uncertain terms:
Those who devour usury (riba) shall only rise as one whom Satan strikes with his touch; that is because they say: `selling is like usury.' God has permitted selling and forbidden usury…God blots out usury, but freewill offerings He augments with interest. God does not love any guilty unbeliever… O believers, be aware of your duties, and give up usury that is outstanding, if you are believers. But if you do not, then beware that God and His prophet shall war with you. If you repent, you shall have your principal, without doing an injustice or suffering an injustice. If any one is in difficulty let there be a delay till he is able to pay, but it is better for you to give freewill offerings if you are wise.
It is important to note that instructions about usury are connected to the message about "freewill offerings" (sadaqat), encouraging people to "spend in the path of God." The Qur`an compares and contrasts two practices: usury earned without giving anything in return, and charity given without taking anything in return. Measured in risk-benefit terms, the evil effects of usury surpass by far the good effects of charity. The Qur`an indicates that the practice of usury leads to the concentration of wealth in few hands, giving these people power over the less fortunate in society: "And they accepted usury even though they had been forbidden to do so; and they devoured and misappropriated the goods and monies of others in their greed." The practice is seen to lead to social unrest and corruption because the rich become richer as a result of reckless profiteering, whereas the poor remain poor: "That which you entrust to commercial organizations with a view to making profit will not be increased by God; nor will it increase your sustenance…Corruption appears on land and sea because of the evil that human hands have done…". Clearly, the Qur`an regards usury a practice of unbelievers. It requires, as a test of belief, that it be abandoned. The Prophetic traditions which elaborate the Qur`anic passages declare that taking interest on loans is one of the gravest of sins. All who take part in transactions involving interest are cursed, and the guilty are threatened with hell. Various kinds of punishment are described.
The Qur`anic denunciations of usury were occasioned by the needs of a developing community faced with socio-economic imbalances. But such denunciations were not consistently absolute. The Qur`an sometimes softens its position on a matter of interpersonal justice it has fulminated against just before, recognizing the human conditions that prompt such behavior. At other times, the Prophet, as its interpreter, moderated the Qur`anic stance by providing exceptions to the overall prohibition. The case of usury points to this confrontation between revelation and social inertia in the early community. In spite of all the deterrent threats voiced in the Qur`an, some jurists foresaw that transactions involving interest would prevail. In pre-modern judicial decisions, gold and silver were generally regarded as items capable of riba. A number of traditions show that the severe prohibition of usury was moderated by reference to the changed circumstances of a transaction involving specific items and the way they exchanged hands in active trade. In general, Muslim jurists developed cases to permit exceptions to the categorical prohibition in the Qur`an. The cases were reported in the traditions that were open to various interpretations. There were monetary transactions that led to principles that now govern when and where interest may be accepted. For instance, some Muslims practiced money exchange during the Prophet's life time. They asked the Prophet if this was alright. The Prophet said: "If it is from hand to hand (yadan bi-yadin, that is, immediately), there is no harm in it; but if it is delayed (nasa'an) it is not right." Some jurists extrapolated these traditions to maintain the view that riba consists only in the increase of original amount of a loan in a business agreement with a fixed period (dayn); others opined that there is no riba if the transfer of ownership takes place immediately. In other words, interest was to be permitted if transfer of ownership took place at once.
Contemporary attitudes towards interest (riba)
Because the rulings inferred by earlier jurists were not strictly uniform, there now exists a variety of views regarding the permissibility of charging interest in the buying and selling of goods. Outside of precious metals there remain differences of opinion about the items that are liable to usury ordinances. Thus, for instance, should all business dealings in things of the same kind be considered capable of riba? The opinions vary according to the documentation used to deduce juridical decision. Some argue that interest is permitted if the transfer of ownership of goods capable of riba takes place immediately. This is also known as riba al-fadl (`immediate' credit), which occurs in a contract of sales when there is an increase in the terms of exchange themselves. The more strict Muslims limit riba to the exchange of goods of same kind in equal quantities in accordance with a tradition that says: `Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt, each kind for each kind, in hand. He who increases or asks for an increase commits riba, alike whether he gives or takes.' In the case of loans, which occasioned the Qur`anic prohibition of interest in the first place, it is forbidden to make a condition that a larger quantity shall be returned without regard to the kind of article. This is known as riba al-nasi`a (`delayed' credit) which entails a fixed increase in the amount of money over a time period. This kind of riba is the main source of contention.
The law regarding interest in lending is formally more strict. Muslims are prohibited either from taking or paying interest. Much of the Islamic law of contract is aimed at enforcing this prohibition of usury and risk (maysir). Riba in a loan exists not only when one insists upon the repayment of larger quantity, but also if any advantage at all is demanded. Therefore, it can even be forbidden to draw up a bill of exchange (suftaja) because the vendor, who is regarded as the creditor, reaps the advantage of avoiding the cost of transport. To be sure, many merchants used bills of exchange in the Muslim middle ages. But they were always conscious that a direct breach of the prohibition of usury was a grave sin.
Remembering such strict interpretations, conscientious Muslims to this day therefore not infrequently refuse to take bank interest. It is accurate to say that riba has operated in a negative manner. The thrust of the debate over riba has centered on the definition of the term, and has included little by way of a positive construction of a viable alternative in the contemporary financial world. The oil boom changed the picture of money flow radically, and one urgent problem facing the Arab and Islamic world was how to utilize effectively the petrodollars without openly flouting the Shari`ah. The question of riba emerged again, but in a different context. For many concerned with its prohibition, the premise was that riba simply meant interest, and loans for interest could consequently not be accepted. Still, the importance of riba-based commerce and its requirement to charge interest have given rise to a number of methods to evade the prohibition. Some Sunni schools and the Shi`ites have recognized such methods of evasion in their discussion about the purpose of divinely ordained restrictions. In applied jurisprudence, these methods are not seen as contrary to the strict enforcement of the prohibition. Legal interpreters argue that two firm principles-"Necessity overrides prohibition" and "No harm and harrassment in Islam"-provide a reason to take into consideration the situational aspects (mawdu`at) of the original prohibition, to the extent that these two principles reflect the effective causes (`ilal) and inner significance (maqasid) of the Qur`anic ordinance. For example, if the categorical prohibition of interest has an adverse impact upon those who are manipulated in society, it may fail the test imposed by "Necessity overrides prohibition"; if one manoeuvers carefully to make interest fall within the acceptable limits , it may meet the test required by the rule "No harm and no harrassment." The case of deferred sales (buyu` al-`ajal) presses this line of interpretation farther. Where the delivery of the item or the payment of its price is deferred to a later date, there is no certainty nor even a strong probability that such a sale would lead to evil. Hence, if A sells his car to B for $10,000 with the price being payable in six months' time, and then A buys the same car for $8,000 from B with the price being payable immediately, this transaction in fact amounts to a loan of $8,000 to B on which he pays an interest of $2,000 after six months. From a legal viewpoint, there is a strong probability that this sale would lead to riba although there remains enough uncertainty that some jurists have regarded this type of transaction to be valid and legally binding. The uncertainty concerns whether the arrangement is actually exploitative. For if two businessmen have agreed, then it might be legitimate for the one who is to profit by the consequences of the present deal to be bound to share his profit in a complementary future deal.
Still, more strict jurists continue to regard any loan contract specifying a fixed return to the lender as immoral and illegal, regardless of the purpose for which a loan is sought, its amount and, or the prevailing institutional framework. The reason is that a distinction made in the loan operation by those who justify this operation, between the money on which the contract is made and the operation of lending itself is actually money rewarding money,which is unacceptable under the Shari`ah. This vocal minority in juridical opinion takes the Qur`anic prohibition as categorical, and hence, not open to any further debate or discussion. There is little doubt that in the case cited for this study, Mr. Kamaluddin's religious tenets were governed by the directives received from the latter group of scholars.
In general, it is safe to assume that majority of the Muslim businesses have come to recognize a fait accompli in dealing with interest-based transactions. Devout Muslims may remain hesitant to invest their money in the international stock market, but continue to avail themselves of modern banking with its religiously questionable practice of charging or paying interest. Most businesspeople simply consent to the western model as long as the financial institution happens to be non-Muslim. And some jurists regard banking with interest permissible, as long as, a person does not negotiate the interest and the bank is non-Muslim. Others seek to justify such excusatory thinking. Some leading Sunni jurists in Egypt defend their positive rulings on bank interest by regarding the modern bank interest as something different than the riba (usury) forbidden in the Qur`an. Their judgment rests on the ordinary lexical meaning of the term riba, which literally and simply means "increase" (ziyadah). They argue that since not every increase or profit is unlawful in the Shari`ah, the Qur`anic text remains open to further extrapolation as to what type of increase God intends to forbid. Another tactic is used by Islamic banking institutions in many countries, including traditionally Muslim countries like Algeria and United Arab Emirates. They maintain their economic viability by describing themselves using the Islamic legal concept of "partnership for profit and loss" (mudaraba). There are basically three parties to the "partnership": the depositor (mudarib), the entrepreneur-investor (mudarab) or agent (`amil) and the bank which is intermediary between the depositer and the entrepreneur, as well as the agent of the owner of capital deposited in its safes. In this form of organization, all the parites to the mudaraba share in the profit and losses of the enterprises.
Conclusion
Despite efforts to evade it, the prohibition of interest remains a key element in the Islamic vision of a socially responsible economy, and an important element in Islamic business practice. In the last few decades of the twentieth century, according to a report by the Institute of Islamic Banking and Insurance, as many as 150 Islamic banking institutions manage $100 billion in the Muslim countries and abroad. There is a huge market demand for religiously guided investing among Muslims. Committees of Muslim jurists are consulted to decide what companies are Qur`an-safe (i.e., for example, do not sell alcohol, pork products, tobacco or charge interest on loans) for investment. Interest in Islamic investment is growing, with international stock markets launching their own Islamic market index to track Qur`an-safe stocks. The influence of Islamic ethics extends further. Besides ruling out certain items as forbidden, the Shari`ah (Muslim religious law) also governs how much debt a company can carry and how much it can earn from interest. From the Islamic perspective, with its bias towards fair distribution of wealth and social justice, the Qur`an's strictures against riba remains at the heart of the Muslim individual as well as national financial institutions in international economic activity.
The prohibition of interest may become an important benchmark of justice in international political economy. As the world economies move closer to integration there is a growing consensus in the international community to move towards a more or less transcultural framework of ethical principles and rules. What is needed is a meta-ethics, a way for the different cultures and religions of the world to interpret their norms and practices to each other. From a normative Islamic point of view, the aim of this dialogical mode should be to engage theologians, scholars and policy makers in the world economic system to search for better ways of redestributing wealth and preserving social justice across nations. This normative focus clearly is evident in Islamic jurisprudence regarding the charging or paying of interest. When the Qur`an banned transactions involving interest, the purpose was to protect financially weak in one way or another against the wealthy who might take advantage of them. The attitude which dominated Islamic jurists was fear of arbitrariness in the decisions of those who held financial and political power. It is an appropriate attitude today.
The Islamic position is an important contribution to international business ethics, for it is supported by a general cross-cultural moral belief that the poor ought to be protected as well as a specific revelation within Islam that regards interest as a form of disregard for the downtrodden in society. All cultures share certain moral principles like beneficence or nonmaleficence. All require rules like truthfulness in advertising as an essential element in regulating morally responsible merchant-consumer relationship. The Islamic prohibition of interest therefore seems to be an extension of the ethical requirement that human beings must treat each other fairly, rather than an obstruction to commerce.

Islamic Economics Can Solve World Problems

Islamic economics presents viable solutions to many problems facing the world, says Abdul Rahman al-Jeraisy, a leading businessman and chairman of the Riyadh Chamber of Commerce and Industry. “There are a number of successful experiments in the field of Islamic economics,” al-Jeraisy said, emphasizing the importance of applying Islamic methodology in utilizing and managing material resources.
In a statement on the occasion of the seventh Islamic Economic Conference, which opens at King Abdul Aziz University (KAU) in Jeddah on April 1, he said the conference would shed more light on the growing significance of Islamic economics. “[Sharia] has given utmost importance to economic matters and warned against financial dealings that would have dangerous consequences on the Ummah [the broader Islamic nation] and moral values,” said al-Jeraisy.
He underlined the importance of the conference as it comes at a time when many Muslims have drifted away from Islamic teachings in dealing with their economic and financial matters.
“The conference also offers a good opportunity for interested people to become aware of new research in the field of Islamic economics,” he said. Jeraisy Group is one of the conference’s main sponsors.
The three-day conference will examine the findings of numerous studies in Islamic economics to counter challenges posed by the modern world and help poor Muslim countries develop their economies. Dr. Abdullah Muhammad Bafel, vice-president for higher studies and scientific research at KAU, said the conference would formulate a futuristic economic vision from an Islamic perspective.
The conference will bring together economists, business leaders, entrepreneurs, thinkers and journalists. It will be a forum for Islamic economists, bankers and financiers to discuss the intricacies of Islamic finance and examine the dynamic nature of Islamic economies. “It is vital to examine why the vibrant principles of Islamic economics have not been implemented over the past few years and no viable method has evolved to invest the wealth of rich Muslim countries in poorer Muslim countries,” Bafel said.
Participants will also discuss the development of natural resources in Muslim countries in light of the challenges and opportunities posed by globalization. The conference will also help develop strategies to create a better understanding of business opportunities in emerging markets.
The conference will discuss as many as 50 research papers on various topics presented by experts from different parts of the world. Dr. Abdullah al-Musleh, secretary-general of the International Organization for Scientific Miracles in the Holy Qur’an and Sunnah, will present a paper on “Miraculous Economic Teachings in the Qur’an.”
Al-Musleh will focus on the economic problems being caused by the interest-based banking and financial system that obstructs investment, causes inflation and expands the divide between rich and poor. “Zakah encourages investment, controls inflation and contributes to solving unemployment problems,” he added.
[The Qur’an requires a Muslim to donate five percent of his income in the form of zakah or zakat (alms) for the benefit of the poor.
The author does not explain how zakat could encourage investment, control inflation and contribute to solving the unemployment problem. After all, in the case of the capital-surplus countries in the Gulf, the excessive liquidity is the main source of inflation. Unemployment is more a social and cultural issue than an economic one, as it has to do with the reluctance of Gulf citizens to engage in non-white color jobs. Moreover, the unemployment of women in Saudi Arabia, for example, is not an issue caused by lack of investment.]

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Islamic finance is the fastest growing market in ethical finance with an annual average growth rate of between 10 percent and 20 percent. Current global Islamic finance assets stand at $800 billion and are predicted by some to rise to $4 trillion by 2015. The credit crunch has provided Islamic finance with a unique opportunity to assert its values of ethically based financing, which could help to shape the global financial industry as a whole.
Islamic finance distinguishes itself from conventional finance in its compliance with the principles of Islamic commercial jurisprudence. Islamic finance techniques seek to promote ethical and socially responsible investment while providing an alternative to interest-based finance. The main tenets of Islamic commercial jurisprudence prohibit interest payments on monetary loans or securities, speculation, uncertainty in certain contractual terms and engaging in anti-social business activities. Some of the main Islamic financing techniques include murabaha (cost-plus financing), sukuk (Islamic bonds), ijara (based on the leasing of an asset), istisna’a (production/construction financing) and musharaka (equity investment).
The recent defaults in the Islamic finance industry have shown that the Gulf has been affected by the same liquidity issues as the West, with central banks actively intervening to encourage interbank lending. However, there are significant differences in the views about long-term prospects expressed by bankers in different states in the Gulf, as well as between bankers situated in Western banks, conventional local banks and Islamic banks, with the latter being the most optimistic, especially if they are based in countries with rich energy resources. The general view among all bankers is that they will monitor market performance in the first two quarters of next year.