The Vatican article is only one of many articles that have recently appeared on the acceptance by Western governments and bankers of an Islamic financing system. More than accepting it, they seem to be welcoming it, though they are certainly being pressured into this by unnamed forces bowing to the dictates of Islam.
Last December, the French Senate looked at ways to eliminate legal hurdles, particularly levies, for Islamic financial services and products in France and the potential for listing companies on the Paris Stock Exchange. Senate sources said that this area of the financial market is worth from 500 to 600 billion dollars and could grow by an average 11 percent a year.
French Finance Minister Christine Lagarde has announced France’s intention to make Paris “the capital of Islamic finance” and announced several Islamic banks would open branches in the French capital in 2009.
This hearkens back to a video from November 26, 2008 that was posted at many French websites showing Madame Lagarde announcing with (according to some bloggers) visible embarrassment the decision to allow Islamic financing in France. Whether or not this move is constitutional is apparently not even an issue, since European countries change their laws to accommodate Islam. If the “sacred” law separating Church and State can be violated, any law can. The video, with its very soft audio, shows the minister in a strange garb, and struggling to present a happy countenance. There is no way of knowing if this is merely the quality of the video, or an indication of her emotional state. An article from Le Parisien dated November 27, 2008 provides the following information, in addition to the facts presented above:
A revolution in the banking world. After London, where the first Islamic bank opened its doors in September 2004, France could authorize banks respecting sharia law to open in 2009 (...) Hervé de Charette, president of the Franco-Arab Chamber of Commerce emphasizes that “importing Islamic banking into France would help the integration process”. The main obstacle: “Islamic banking arouses fear because it is associated, wrongly, with religious fundamentalism, even with the financing of terrorism,” deplores Elyès Jouini, professor of economics at the University of Paris. (...)
The world economic crisis has changed the ball game. From New York to Hong Kong, all the financial centers on the planet are grabbing the billions of dollars amassed by the oil-rich monarchies of the Gulf. To tap into this manna (...) is the stated goal of Christine Lagarde. “We are determined to make of Paris a great center for Islamic finance,” declared the Finance Minister as she inaugurated the second French forum on Islamic banking.
For another longer English-language article, visit Islam On Line. This article goes back to July 2008, showing that even before the crisis, France had initiated a policy favoring Islamic banking.
Source: Brussels Journal
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Easing Limits on Islamic Finance in France
Video of Christine LeGarde on Islamic Finance
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Islamic Banking Principles
6 comments:
This is another ploy by the west to loot the middle east. English company earlier sold the concept of credit rating and looted 2.5 trillion dollar from the swf of middle east.
Now they are doing it in the way acceptable to the islamic culture. As islamic finance does not have any interest concept, people can walk away with murder with regard to returns.
As such if you look at the people who are investing they are also becoming concern about the return on asset and security of captial.
If all that is charity, they will all invest in poor countries like somaalia, sudan to develop poor muslim countries.
Islamic finance does not have mandatory interest. Following are the impact compared to the traditional banking :
1. Banks technically need not accrue interest
2. Since there is no interest the repayment
amount will not change due to interest rate
variation
These were the two reason which brought out the sub-prime asset issue in america where the consumpiton was more than the income. When the interest rate went up item no. 2 went up and the borrower could not pay resulting in massive bad assets for the bank and the bank itself getting dissolved.
So american and europe would love to have the islamic finance as it will be funded more by wealthy islamic countries and sovereign wealth fund.
NO interest accrual
NO increase in interest rate and emi.
Another round of free lunch probably at the cost of the petro-dollar
Probably if the charity is the spirit and the word islamic finance, they must open up micro-finance in all developing muslim countries leave others. Anyhow that is not going to happen just a wishfull thinking.
Islamic finance still run on the traditional banking finance. Every investor would like to know what would be the return on investment.
The interest is re-cycled in such a manner which is acceptable by shariah. But the principle in which it operates is that there is no interest and on activity prohibited by holy book
Here's an excerpt from a piece by Pankaj Mishra published in Businessweek:
Nov. 18 (Bloomberg) -- During the worldwide depression of the mid-1930s, the poet and Islamic modernist Muhammad Iqbal, often called Pakistan’s spiritual founder, wrote a poem dramatizing the inadequacies of Western political and economic systems.
Democracy and capitalism had empowered a privileged elite in the name of the people, Iqbal felt. But he was not much fonder of Marxism, which was then coming into vogue among anti- colonial activists across South Asia and the Middle East:
But what’s the answer to the mischief of that wise Jew That Moses without light, that cross-less Jesus Not a prophet, but with a book under his arm For what could be more dangerous than this That the serfs uproot the tents of their masters
(Rooh-e-Sultani Rahe Baqi To Phir Kya Iztarab
Hai Magar Kya Uss Yahoodi Ki Shararat Ka Jawab?
Woh Kaleem Be-Tajalli, Woh Maseeh Be-Saleeb
Neest Peghambar Wa Lekin Dar Baghal Darad Kitab
Iss Se Barh Kar Aur Kya Ho Ga Tabiat Ka Fasad
Torh Di Bandon Ne Aaqaon Ke Khaimon Ki Tanab!)
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In any case, Tunisians voting for Ghannouchi and Pakistanis flocking to Khan’s rallies are not the radical revolutionaries or closet theocrats they are often made out to be by a paranoid local elite and a global liberal intelligentsia. Rather, these are people who have simply failed to develop the habit of seeing Islam as a purely religious phenomenon, separate from economics, politics, law and other aspects of collective life.
Whether liberal and secular elites like it or not, there are a large number of socially conservative Muslims who wish to see the ethical principles of Islam play a more active role in public life. The mind-numbing division between “moderates” and “extremists” that often passes for profound understanding of Islamic societies in the West simply fails to account for this invisible majority of Muslims, who are unlikely to plump for secular liberalism either now or in the near future.
For many nationalist and reflexively conservative Pakistanis, Imran Khan’s belief that “if we follow Iqbal’s teaching, we can reverse the growing gap between Westernized rich and traditional poor that helps fuel fundamentalism” is not the empty rhetoric it may sound to a Westernized Pakistani.
Indeed, the history of South Asia and the Middle East has repeatedly shown that the failure of modernizing endeavors, and the widespread suffering it unleashes, has always enhanced the moral prestige of Islam. In the eyes of its victims, the debacle of modernization and secularization has also diminished the credibility and authority of local elites as well as their Western sponsors.
The classic example, of course, was Iran. Visiting the Islamic Revolution after the fall of the secularizing Shah, the French philosopher Michel Foucault claimed that “Islam -- which is not simply a religion, but an entire way of life, an adherence to a history and a civilization -- has a good chance to become a gigantic powder keg, at the level of hundreds of millions of men.”
The 1979 Islamic Revolution in Iran that Foucault rashly cheered on has, in another generational shift, run its course. And revolution per se may be far from the minds of young Pakistanis and Tunisians trying to regain control of their national destiny. But the powder keg of political Islam that Foucault spoke of remains dry elsewhere in the Muslim world; and its potency is only likely to increase as Western political and economic systems and ideologies seem, to many Muslims, feeble, and yet so malign.
http://www.businessweek.com/news/2011-11-17/islam-offers-a-third-way-in-pakistan-and-tunisia-pankaj-mishra.html
IRTI, Thomsob Reuters and IBA Study reveals double-digit growth in #Pakistan’s #Islamic finance sector. #Karachi http://en.mehrnews.com/news/119532/Study-reveals-steady-growth-in-Pakistan-s-finance-sector …
A study launched by IRTI, Thomson Reuters and IBA has shown that Pakistan’s Islamic finance sector continues its steady growth.
The study on the Outlook of Islamic Finance in Pakistan said the banking sector is growing and market share in 2018 is expected to rise to 15% percent.
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The Pakistan study ... provides recent developments across the Islamic finance industry and the broader economy and identifies challenges for the country’s future before presenting a number of key development recommendations.
Since its independence in 1947, Pakistan has been striving to develop an economic system based on Islamic principles, the study explains. And in the past 15 years, Pakistan has shifted to a dual Islamic/conventional financial system, which boosts business with the global economy while making progress towards a fully Islamic financial system by building market demand for it. Policymakers and regulators in Pakistan have made positive strides to reform the legal and regulatory framework in the past decade.
The study also highlights the country’s resilient agricultural production, strong potential for hydropower generation, oil production, natural gas reserves, and large gold and copper ore deposits. These resources should also be fully utilized to help accelerate the growth and development of the country, and the Islamic finance industry is a potential partner for structuring and financing such industrial projects.
“Islamic finance is taking strong roots in Pakistan with the support from the government as well as from the State Bank of Pakistan, and the Securities Exchange Commission. Besides the growth in Islamic financial assets, a sustained progress can be observed in regulations, highlighting new frameworks for Shariah governance for Islamic financial institutions, Sukuk and Takaful. The Islamic finance industry is establishing on a robustfooting and we are confident that it has a strong potential for leading the international Islamic finance industry,” said Professor Dr. Mohamed Azmi Omar, Director General of IRTI.
The report highlights that the Islamic capital market sector registered a remarkable growth at a double-digit rate in the past decade, recorded mostly by Islamic mutual funds. Takaful and Mudarabah companies are catching up, despite the relatively small size of these industries. In all Islamic finance industry segments, finance professionals and investors maintain a positive economic outlook, and Islamic finance institutions have built strong fundamentals.
The study also highlights some key trends in the future growth of Islamic finance in Pakistan. These include the rise of branchless Islamic banking via mobile services, the fast growth of the KME Meezan Index (KMI-30) and Islamic All-Share Stock Indices, open market operations on government Sukuk to maintain the liquidity of the Islamic banking system and the rapid expansion of Islamic microfinance.
“To maintain this pace of growth, we recommend that policymakers and professionals continue their reform of regulations and integration with global Shariah and governance standards, the expansion and deepening of an Islamic finance education curriculum, and their marketing effort towards rural areas, to spread awareness and financial inclusion,” said Mustafa Adil, Head of Islamic Finance at Thomson Reuters. “We have no doubt that in the coming decade, we will see Pakistan as key international player for the growth of the global Islamic finance industry”.
To download the full version of Pakistan Islamic Finance Report: Innovation at Asia’s Crossroads, please visit the pages below:
http://islamic-finance.zawya.com/ifg-publications/Pakistan-300816074233A/
http://www.irti.org/Reports/Pakistan.pdf
#Investment inflows spur #Pakistan's corporate #sukuk (Islamic bond) market http://reut.rs/2mHKBoO via @Reuters
Growth of sharia-compliant investment funds in Pakistan is helping fuel demand for sukuk, or Islamic bonds, giving local firms new funding options while strengthening the case for Islamic pensions in other majority-Muslim countries.
Strong demand for Islamic funds, and in turn sukuk, could encourage other countries trying to deepen their Islamic capital markets, in particular in the Gulf region where private pensions are rare.
Pakistan's Islamic banks lag their conventional peers, holding around 13 percent of total deposits, while Islamic mutual funds and private pensions have a far greater market share.
Islamic mutual funds held 242.7 billion rupees ($2.3 billion) in assets as of December, or 37 percent of the total, official statistics show.
Almost two-thirds of assets in the country's voluntary pension system (VPS) are now managed under Islamic principles.
All 10 VPS managers offer Islamic pension products, worth a combined 14.5 billion rupees, or 63 percent of total VPS assets with the largest VPS product being sharia-compliant.
Attractive yields, tax exemptions and greater flexibility in choosing external managers have made VPS products popular, which in turn adds to demand for sukuk, said Abdullah Ghaffar, head of investment banking at Al Baraka Bank Pakistan.
"Mutual funds, both fixed income as well as equity funds, have become big time investors in existing and new sukuk issues taking place because of the huge assets under management under their disposal."
Two recent sukuk transactions from manufacturing companies attracted significant interest from such investment funds, while equity funds are also becoming active in initial public offerings, Ghaffar added.
Reforms from Pakistan's capital market regulator have also helped equity-like financing vehicles, known as modarabas, to grow their combined assets above 41 billion rupees.
This has attracted a wide range of issuers: Byco Oil Pakistan Limited raised 3.12 billion rupees via sukuk using a credit gurantee and Ghani Gases raised 1.3 billion rupees via a privately-placed sukuk last month.
In December, Fatima Fertilizer Company mandated banks to raise 10.5 billion rupees through a lease-based sukuk.
Pakistan GasPort Consortium Limited plans to raise 8.6 billion rupees via seven-year sukuk to finance the construction of the country's second LNG import terminal.
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