Islamic Finance

There is a compelling article in the Telegraph on Islamic Finance. The problem is Sharia Law and its restrictions on loans and charging interest with its consequent implications for Islamic financing. The problem is that in Kuwait the Islamic financial firms are trying to work around the loans and interest restrictions in Sharia Law.

it underlines a)the many profound shades of Islam that stretch across the world from North Africa through the Middle East to Indonesia and b)the varying effects this can have on the social and economic development of each country

The problem’s arise in credit situations where a default arises. In Asia, Oceania, North and South America and Europe (all under a multitude of different religions) – the rules regarding credit, interest, and loan management is relatively standard. But in Kuwait (right next door to Abu Dhabi which is working assiduouly to become the Beiruit of the Middle East in terms of managing Investment Finance) it shows the fits and connuptions that Islamic Businesses have to go through. Does this shed light on why Islamic countries have done so poorly in current times on innovation? Probably not given that micro-finance, which won a Nobel Peace Prize, arose in Bangladesh – an Islamic predominate country. So instead, this article underlines a)the many profound shades of Islam (for example, variances in regions for observing Sharia law) that stretch across the world from North Africa through the Middle East to Indonesia and b)the varying effects this can have on the social and economic development of each country. Its as if Islam did have its Reformation (Shia, Sunni, and maybe half a dozen variants) but has not been able to insure religious freedom of choice (and therefore separation of religion and state) as effectively as the other world’s religions have done.

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