I think this is a fond hope, I am afraid. This because of two reasons. The first is theological as Islam is a total philosophical and social system, you cannot have a financial system outside Islam or inside Islam and leave politics out of it. The second is that the current geo-political scenario does demand you to be cognizant of that fact that anything to do with Islam will be looked at with different eyes. By itself, there is nothing wrong with investing based upon Islamic Principles. But I can see why people can get upset with it.
Still, read on.
Islamic finance seeks independence from politics
By Roula Khalaf in Dubai
Published: November 18 2007 15:39 | Last updated: November 18 2007 15:39
Islamic finance experts are trying to disassociate the industry from political Islam, fearing the amalgamation could create a backlash in the west as the sector surges forward in its integration into the global economy.
Nasser al-Shaali, chief executive officer of the Dubai International Financial Centre Authority, on Sunday cited the need to disassociate Islamic finance from politics as one of the industry’s challenges.
“If we don’t demystify the industry, it will not be an alternative” in mainstream finance, he told a Dubai conference.
The phenomenal rise of Islamic finance, a market now estimated at $750bn, with a growth rate of about 15 per cent a year, has coincided with a broader move among Muslim populations to assert their identity.
While it is true that the global war against terrorism waged by the US and its allies has intensified the search for solutions within Islam, enhancing the popularity of Islamist political movements, Islamic finance experts insist that the factors behind the sector’s development have far more to do with economics than politics.
“There’s a minority view that links political Islam with Islamic finance but that view needs to be eliminated,” Mr al-Shaali told FT.com. “We’ve sent the spectre of protectionism in the US and Europe and we cannot tolerate to see it spill over into Islamic finance.”
Islamic financial products, he added, appealed not only to Muslims. “By some estimates, subscription levels for sukuks [Islamic bonds] are 50 per cent from non-Muslim investors.”
Mr al-Shaali said there was a need to raise awareness about the industry and better communicate what it’s about to decision-makers abroad.
The growth of Islamic finance, he maintained, was driven by the interest in more ethical investing. “In an age of greed, well publicised corporate corruption and increased awareness of the social role and responsibility of corporations, investing in Islamic finance is a refreshing alternative,” he said.
Sheikh Yusuf Talal DeLorenzo, chief Shariah officer at Shariah Capital, a DIFC-based advisory company, said in a separate interview that the industry’s growth had most to do with its ability to compete with conventional banking.
“In the last 10 years, we begun to compete with conventional institutions, we can provide the same levels of service and perform with the same bottom line,” he said.
Humayon Dar, chief executive officer of BMB Islamic, a London-based advisory firm, said Islamic financial products are designed to appeal to moderate Muslims.
“Islamic finance is a modernist movement in Islamic communities,” he told FT.com. “It has no political agenda – it’s about a new Islamic identity for moderate Muslims and an attempt to bring Muslims out of the mosque and into the market they interact and trade with people.”
He noted that for the first time, Islamic clerics were dealing with the “torch bearers of capitalism.” If funds from the region are not going into the US as fast as in the past, he added, it was not due to a lack of interest by investors but is rather blamed on the difficulty of accessing the American market.