Get Even More Visitors To Your Blog, Upgrade To A Business Listing >>

The Dillema of Modern Islamic Finance

By Omar Javaid

I recently participated in 10th International Conference on Islamic Finance and Economics in Doha, Qatar, one of the largest gathering of its kind. I listened/discussed my views with various top experts in the field. I also presented a paper on how Islamic concept of wealth and modern concept of capital differs with each other.

In a nut shell all the discussion on the problems and solution in the realm of Islamic Finance were revolving around the challenges emerging for misplacing knowledge of Islamic Finance in the modern western institutional framework standing on foundations completely incompatible with that of Islam! ...

Its like to save the horse, you chop off some part of its body and put it inside a car (horse skin for car seat covers) and expect some benefit for the horse, and when the horse dies or cries in pain then you wonder whats wrong, and wonders how to save the horse. Or to save the tree you chop of some of its branches and place them inside the exhaust of the car... These are exaggerated metaphors however they explains the dilemma and what is being done in the industry of Islamic finance.

Islam is organic (Muslim ummah is like one body, pain of one Muslim is felt by all; the individuals are related spiritually, emotionally and of course contractually as well, and the nature and integrated design of institutions like that of family, bazaar/guilds/souqs etc, waqfs, courts, madarasah, etc.) vs the modern industrial capitalist system is mechanical (it works like a machine as its evolved out of a steam engine/boiler operated production line into a bureaucratic machinery, and this machine logic is everywhere, its a machine design to create money, which is used as a fuel to run the machine to produce more money/capital, so on so forth)...

Taking something from an organic system and putting it into a mechanical system is absurd, and expecting it to work is more absurd, and then lots of time and energy to discuss the problem arising from this misplacement, without realizing the fundamental mistake (which I would argue is an honest mistake) is even more absurd to a ridiculous level.

I presented my paper on the same idea and shared this insight infront of various top experts in the field like Mehmet Asutey (Head of Durham University Islamic Banking program in UK), Dr. Kabir (from US), Muhammad Ayub, to Dr. Asad Zaman, etc. etc. and I am yet to find a top scholar in the field who hasn't agreed to this fundamental problem.

But since its like any other phenomenon, Islamic Financial Industry is also like a snow ball and recommendations from people like me and Dr. Asad Zaman (who has also explained clearly the design of original institutions in one of his paper). Will take perhaps development of another track independent of existing phenomenon, if not adopted by the existing bandwagon.

This post first appeared on The Critic's Den, please read the originial post: here

Share the post

The Dillema of Modern Islamic Finance


Subscribe to The Critic's Den

Get updates delivered right to your inbox!

Thank you for your subscription