At the Thistle City Barbican Hotel on 1 November, Christian Concern launched What’s Wrong with Islamic Finance?, a booklet authored by Tim Dieppe. Tim and Bishop Michael Nazir-Ali hosted the evening.
Islamic finance, otherwise known as sharia-compliant finance, is based on the idea that all forms of interest are prohibited (or haram) in Islamic law. Over 20 lenders in the UK offer Islamic financial services. In 2014, Britain made history by becoming the first non-Muslim country to issue a sovereign Islamic bond, as part of the government’s ten-year commitment for the UK to become the Western hub of Islamic finance.
When Prime Minister, David Cameron said he wanted to go further still: ‘I don’t just want London to be a great capital of Islamic finance in the Western world; I want London to stand alongside Dubai as one of the great capitals of Islamic finance anywhere in the world.’
Reasons for caution
With a growing number of Islamic finance retail customers seeing this as an attractive financial model, is there reason to be cautious? The premise of Islamic finance is the belief that the Qur’an forbids the implementation of all types of interest. This, however, is based on a modern radical interpretation of verses Surah 3:130 and Surah 2:275-79.
The financial products on offer contain charges or expected profits that look a lot like interest, leading many Muslims to criticise Islamic finance as being deceptive. Leading scholar in Islamic Studies, Timur Kuran, says that ‘the alleged antiquity of the doctrine is a myth… even the concept of Islamic economics is a product of the 20th century.’ Elsewhere he says: ‘The real purpose of Islamic economics has not been economic improvement, but cultivation of a distinct Islamic identity to resist cultural globalisa-tion.’ Abdul A’la Mawdudi, who founded the militant Pakistani Islamist Jama’at Islami movement, started the concept of Islamic economics that Kuran speaks of.
Preventing integration
In his booklet, Tim Dieppe similarly argues that the real aim behind Islamic finance is to create a separate rival financial system, and that Islamic finance serves to prevent the integration of Muslims into Western societies. This in turn serves to benefit Islamic fundamentalism, by fuelling the idea that Muslim societies live by distinctive rules. Logically, the funds necessary for shari’a-compliant finance cannot be obtained from conventional financial sources. The establishment of exclusively sharia-compliant institutions would be required.
Naïvety
Ultimately being entirely isolated from the rest of the global economy, a rival financial system controlled by Muslims would be the result, and would likely be discriminatory against non-Muslims. Perhaps it then comes as no surprise that shari’a-compliant finance is promoted by and associated with extremists. They support Islamic finance because it promotes the segregation of Muslims in the West and increases the influence of shari’a law. In this sense, Western financial institutions and governments have been incredibly naïve in their encouragement of this subversive financial system.
Zakat
A further example of the detrimental consequence of permitting this sharia-compliant system is one of the five pillars of Islam, Zakat. This is a similar concept to tithing; it is described as the charitable payment of 2.5% of profits to shari’a-compliant activities. We ought to be wary of anything that supports the wider influence of shari’a law in our culture, especially given what we see of the ongoing crises affecting Islamised nations across the Middle East.
Zakat can be used to finance violent Jihad, the propagation of Islam. Jihad financed through zakat is nothing new, but Islamic finance would vastly increase the volume of potential zakat collections. Also the collection and distribution would come under one central authority that would almost certainly be controlled by committed Islamists. A paper published by the Centre for Security Policy says: ‘With some 400 banks in 75 countries and a trillion dollars in Islamic financing currently, the potential zakat sums are staggering.’
If our government and financial institutions continue to uncritically accommodate shari’a-compliant finance in the UK, it will become harder to object to shari’a in other areas, such as family law. To promote a widespread acceptance of Islamic finance legitimises shari’a law as an operating judicial system in the West. Why is our government welcoming and lending credibility to an illiberal, undemocratic and discriminatory system? What’s Wrong with Islamic Finance? aims to bring proper awareness of the truth of the subject. It is time Western governments and financial institutions ‘wake up’ to the elusive nature of Islamic finance and expose its deceptive roots.
