DOHA: The world financial system, which is built on the capitalistic model, came in for a scathing attack for its intrinsic weaknesses at a forum of Islamic banking leaders here yesterday.
A key jurist from the Islamic banking industry, citing the current global financial turbulence as a harbinger of doom for world capitalism, said time had come ‘to offer the humanity’ the Islamic financial system as a viable option.
Dr Hussein Hamed Hassan, Chairman of Fatwa and Shariah Supervisory Board of Dubai Islamic Bank, told the two-day conference the only system which was free of the dangers that triggered the current economic gloom was the Islamic financial system.
“Capitalism has collapsed,” Hussein declared, obliquely referring to futures, derivatives, options and short sale as the speculative aspects of equity trading which rocked the world financial order. He said such transactions were barred by Islam.
“Prophet Mohamed (Peace Be Upon Him) said 14 centuries ago that do not sell any asset which you do not own,” said Hussein. Greed and profiteering wrote the obituary of the capital-inspired world financial system.
“Islamic Shariah doesn’t allow transactions which carry such kinds of risks,” the scholar-banker reiterated, pointing out that derivatives began in the 1960s as a hedging tool but a decade later, they became a ‘business’.
“They talk of leverage,” said Hussein sarcastically of the players that brewed the current crisis and added that for the havoc that had been wrought some were accusing regulators, while others were pointing fingers at governments.
Talking of interest (bank rates) which is forbidden by Islam, Hussein said if it went up it created a crisis as the cost of finance rose, and if it came down it led to a situation such as the one recently in which loans were given away in the US to people who were not able to pay back.
And the irony is that some of the players involved were the ones rated ‘AAA’ by ratings agencies and yet, at the end of it all, ‘the whole thing collapsed’ like a pack of cards. “And they call it free economy!”
About the expanding vistas of Islamic banking the world over, he said several European nations had recently made changes to their legal system to allow Islamic banking to set in foot. “At least fellow Muslims have now come to know that Islamic banking is protected.”
Hussein pooh-poohed G20 leaders and taking a dig at their much-touted meeting, said they announced bailouts worth hundreds of billions of dollars in the hope that the failed system would rise again (to re-wreak havoc!).
The forum ‘Leaders in Islamic Finance 2009’ is being held at W Doha Hotel & Residences and concludes today. Islamic banking and Shariah experts from several countries, including Malaysia, are taking part.
0 Comments:
Post a Comment