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Islamic Banking and Finance Threats and challenges in the aftermath of 9/1
By Latheef Farook June 18 , 2006
Over the years the banking industry, which covers almost every aspect of financial activities and dominates the economies of almost every country in the world, has become the exclusive privilege of the international Jewish community.
In the same way, the multi-billion dollar weapons industry, thriving on human misery, and being one of the main sources of income and employment for many countries in the West, too remains in the hands of a selected few.
And they would to any lengths – including the instigating of wars and destabilizing countries, often at the cost of hundreds of thousands of innocent lives – to preserve this monopoly over these two sectors which provided political influence to an extent where they make and unmake political leaders and even
governments in many developed countries.
Thus they guarded these industries with great care, wiping out any potential threat or challenge, and that too without a trace under one pretext or the other, employing the powerful media which remains under their control, to misguide the world.
Islamic banking, which began to flourish during the past three decades, was no exception as it posed a direct challenge to their century old monopolistic hold on the banking industry.
In the 1970s, farsighted and enterprising businessman Saeed Ahmed Lootah established the first ever Islamic bank, the “Dubai Islamic Bank”, the traditional trading centre in the Gulf, which began to flourish since the aftermath of the oil price boom in the early 1970s.
Though the initial response was not encouraging, within a few years Islamic banking emerged as a factor to reckon with as many Islamic banks and other financial institutions began to emerge everywhere, especially in the oil rich Gulf and Malaysia in the Far East.
The concept of Islamic banking is one of the creative methods of Islam to serve the economic and social welfare of its people in keeping with Shariah. Thus these specially structured, interest-free and innovative products with fewer hidden costs were based on ethical standards. These competitive and transparent Islamic financing schemes have fast become preferred method of doing business.
Understandably, this triggered the alarm bells, which rang rather loud in the ears of the conventional banking circles which set in motion a powerful but secret campaign to discredit bourgeoning Islamic financial industry.
But this campaign came into the open in the aftermath of the 9/11 events at the World Trade Centre in New York and Pentagon. Exploiting the mood in its wake and accusing the Muslims of masterminding the World Trade Centre tragedy, the Western media unleashed a vicious campaign dehumanising Islam and Muslims.
Within days it became an overall global campaign led by US President George Bush to justify their secret agendas against Muslims such as the invasion of Afghanistan and Iraq and help weapons industry, oil companies and corporate conglomerates flourish, though many subsequent independent inquiries clearly exonerated Muslims of any involvement in the 9/11 tragedy.
Islamic banks are neither charities nor terror facades; they are banks operating under Central Bank supervisions and their funds have been subjected to regular supervision and auditing.
Yet the Islamic banking industry was subjected to numerous problems. Investors all over the world, who turned in large number to the Islamic banking, shedding their interest-based conventional banks, had to face difficult times with setbacks such as the freezing of their assets, as some of these institutions were falsely linked to the Al Qaeda group and the Taleban. Transactions of most of these banks and financial institutions were closely monitored.
Saudi Arabia’s Prince Mohammed Al Faisal Al Saud, one of the main architects of the Islamic finance industry, lashed out at the US-led West for their smear campaign against Islamic financial institutions, organizations and individuals.
He warned that this was a deliberate campaign to harm Islamic banks, financial institutions and Muslim investors in the West on the grounds that they were supporting terrorism without a fragment of proof to support these allegations. He said, “We all condemn the September 11 attack on the World Trade Centre and the Pentagon as a crime, which has nothing to do with Islam or Muslims as a whole. But the West also should know that this has not given them the license to undertake an indiscriminate smear campaign against Islamic institutions and organisations aimed at harming their interests”.
Prince Mohammed added that “forces behind this campaign never missed a chance to harm the Islamic finance industry. The problem is not that this will have any impact on our business. But there is a cultural side to our business and they are trying to do Osama bin Laden’s job”.
Reiterating this view, the Chairman of the Council of Islamic Banks Shaikh Saleh Kamel, also the Chairman of Al Baraka Group, then said that the West never welcomed the Islamic banking industry and had always been hostile to it. Thirteen years ago, Al Baraka Bank was even closed down in London. He feels that “certain mysterious circles with ulterior motives were working against the Islamic financial industry and Islamic economics. Therefore it is time that Muslim financial institutions and individuals bring back their money from the West to invest in Muslim countries to develop this industry in our region”.
On the other hand, billions of dollars of Arab and Muslim investments in the West, especially in the US, were at stake as there was a threat of these accounts being frozen under some pretext. It had already happened in some cases.
In fact, the investments of Gulf residents in the US, excluding the governments, were estimated at more than US$ 800 billion, while some reports said that Saudi investment in the US alone constituted around six percent of the total US economy. Some of these investors transferred around US$ 200 billion during the first few months after 9/11 from their private equity stocks, bonds and real estate from the US into their European accounts.
Initially, the overall smear campaign successfully managed to turn the world against the Muslims, and the fair word of ‘Islam’, which means ‘peace’, has been tarnished by the Western media to such lengths that it is now inextricably linked it to terrorism.
Despite all these hostile moves, the Islamic finance and banking has emerged today as one of the fastest growing areas of international finance with the estimated value of this market reaching around US$ 300 billion, with around 15% annual growth.
Greater world-wide awareness of this exciting sector means that new players and products are being continuously introduced, bringing new challenges and opportunities. The potential for Islamic finance on a global scale is only just being realized, with the sector expected to make huge strides in the years to come with new products coming into the market on a regular basis.
(Excerpts from the book “War on Terrorism - The Untold Truths” by Latheef Farook, first published in May 2006, by Petalang Jaya based Strategic Information and Research Documentation Centre.)
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