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The Forum > Article Comments > Sharia finance uncovered > Comments

Sharia finance uncovered : Comments

By Vickie Janson, published 20/9/2013

'Islamic Banks…are the life-line of Wahhabi insurgency, they are the feeder of Islamist armed groups, without them terror-donations could not reach the end users scattered around the world'

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I’m not sure how a Napoleoni’s endorsement of Sharia economics would help address the problems you’ve identified. I’d be more inclined to send them the follow short videos of a Scholar, Habib Ali Al-Jifri, addressing similar issues, such as these two links:

Love of the Prophet: http://www.youtube.com/watch?v=io7DZll2rIQ

Habib Ali responds to the plea of a woman: http://www.youtube.com/watch?v=fZG6ibK8mwo

The Mosque, Women & Prophetic Advice: http://www.youtube.com/watch?v=vSrkt8AglLE

…and then suggest that they engage with some of the scholars at www.Qibla.com. You may also learn something about traditional Islam, and not the Wahhabi revisionism that you have probably been mainly exposed to, by enrolling in one of their courses. The last video is also instructional in terms of how to criticise in a manner that is sincere in intention and therefore constructive.

Getting back to the main issue. You ask “Why not just be ethical and use conventional finance ethically”. According to people like Napoleoni you cann’t. Conventional finance is wide open to abuse. There will be people who will step in and do the wrong thing. Shariah financial products can help close these loopholes. I gave the example of the Greek debt crisis with its roots in political graft. Greek politicians and officials would not have been able to divert loans to fund their houses and boats under Sharia compliant finance. There would never have been a sub-prime crises if the financial products were Shariah compliant.

If I were to ask you how my argument or Napoleoni’s argument is affected by what you describe as the “inherent problems of the sharia” would you be capable of answering? Do you understand sharia-compliant financial products such as Murabaha, Mudaraba, Ijara, Sukuk, Musharaka, Istisna or Salam? At least one Australian bank will soon be offering some of these products. How would these so called "inherent problems" impact on these banks or society?
Posted by grateful, Thursday, 24 October 2013 8:52:24 PM
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Agreed - Napolean's endorsement does not help address the problems many people see.
Sharia finance practitioner David Clark explained how sharia finance prohibits excessive uncertainty resulting in the claim of being “more stable”. Clark notes in his submission to the Board of Taxation the most common structure of a sharia home loan is the ijara structure. Here “certainty” is achieved by entering into a new lease each month to allow variable rental. The borrower undertakes to constantly renew the lease until the principal is repaid. Hence there is “monthly certainty”. ie The same monthly certainty conventional finance offers. I am not a finance practitioner but have been advised by Clark that Mudarabah and Wakalah structures are defined “without regard to market reality”. But this is quite secondary to concerns about religious scholars like Taqi Usmani heading the so-called 'highest regulatory board' directing these sharia investments. He is an extremist whose ethics in no way align with most people. ie Jihad against infidels are included in his recommendations. The idea that sharia finance isn't just as open to abuse as any other finance is ridiculous given people like Usmani direct investments. I trust I've made it clear my main concern is validating and promoting sharia compliance in any way. As long as we have news like this - it just seems crazy to promote sharia at all - it just acts to support those who are extreme: http://www.dailymail.co.uk/news/article-2471776/Sultan-Brunei-introduce-new-sharia-laws.html
Posted by Vickie, Thursday, 24 October 2013 9:16:16 PM
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Hi Vickie,

Having skimmed through David Clark's submission to the BoT Review and his other article "The Shariah-Compliant Finance Myth", and what appears to be your one-on-one discussions with David, it would be fair to say David is your primary source. Its probably also fair to say that you know next to nothing about Islamic financial products, so you are heavily reliant on this one source. Although David claims to be a "sharia finance practitioner" involved in "consulting Sharia scholars and structuring Islamic finance products", without any further detail I remain skeptical particularly in light of his inflammatory language.

Putting that issue to one side, David has level some common criticisms about the the structure of some Islamic financial products and in particular to what extent are they just replications of conventional financial products. These issues I'd be happy to discuss, although I'd admit that I'm a novice and certainly not an authority, so I would only be speaking as an arm-chair academic. In any case, I like a challenge and David's criticisms of some Islamic financial contracts is a challenge worth engaging in because it would allow us to gain greater insight into what is meant, and what is not meant, by sharia compliant finance.

cont..
Posted by grateful, Saturday, 26 October 2013 1:17:25 AM
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cont..

As for David's remarks about Mufti Taqi Usmani, this is what David has to say in his submission to the BoT Review of IF:

"AAOIFI chairman, Mufti Muhammad Taqi Usmani who sits on many westen and Islamic bank shariah boards says that offensive, aggressive military jihad must be waged by Muslims “to establish the supremacy of Islam world” and “Killing is to continue until the unbelievers pay jizyah (subjugation tax) after they are humbled or overpowered.” He also advises Muslims to only live peacefully in the west until they gained enough power to carry out jihad”

And this is what YOU have to say about the Mufti: "an extremist whose ethics in no way align with most people. ie Jihad against infidels are included in his recommendations."

And this is what Mufti Taqi Usmani had to say about the attribution of these statements to him:

“Surprisingly, many of these websites claim that I have issued a fatwa that “Muslims living in the West conduct violent jihad against the infidels at every opportunity.” But I never made any such statement either in writing or verbally nor issued any so-called fatwa. Nor is there any sentence to that effect in any of my writings, including “Islam and Modernism”. If this statement is attributed to me in Mr. Norfolk’s interview with me, it is not but a blatant lie, because I never said this during the interview.”(*Ref below)

This is a part of full and complete refutation of the sort of accusations you and David have leveled against this scholar. I would ask anyone else reading this post to give the Mufti the opportunity to defend himself by reading his words in full. These words were written in 2009, before David was writing and of course well before Vickie

Vickie, I challenge you to read the Mufti’s statement in full and explain how it can in any way support the allegations you have leveled against the Mufti. You should apologise for defaming the Mufti and admit you have got it wrong (yet again!)

*Source: http://seekersguidance.org/blog/2009/12/mufti-muhammad-taqi-usmani-clarifies-his-stance-on-jihad-2/
Posted by grateful, Saturday, 26 October 2013 1:33:14 AM
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Hi Grateful

1. I agree - I am not any sort of financial expert and that has not been my argument - I am concerned about the promotion of sharia compliance at all for very sound reasons - it goes hand in hand with restriction of freedoms, undermining of the rule of law and human rights abuses. This segregates communities further - food, finance, etc - based on a premise that un-Islamic = unholy.
2. I have met David Clark but it is wrong to assert I rely solely on his submission - I have quoted many people - Muslim and non-Muslim - throughout this blog.

3. Here's a quote from American Thinker January 2013: http://www.americanthinker.com/2010/05/dont_askdont_tell_anything_abo_1.html

"Whatever dim views one may hold on the "Don't Ask, Don't Tell" policy of the U.S. Military, the policy pales in comparison to the outright calls to violence enunciated by some of the Islamic world's most prestigious and powerful Shariah advisors.

Case in point: Meet Sheikh Muhammed Taqi Usmani, former appellate court judge in Pakistan, a Deobandi (one of the most extreme Pakistani schools of Islam, associated with the Pakistani Taliban)-trained jurist and chief Shariah advisor to the HSBC Amanah Bank, one of the world's largest and richest banks and one of the sponsors of Harvard's Islamic Finance Project. Among other delightful quotes from Sheikh Usmani:

For a non-Muslim state to have more pomp and glory than a Muslim state itself is an obstacle, therefore to shatter this grandeur is among the greater objectives of jihad (from Islam and Modernism)

Also from Usmani's book: "Killing is to continue until the unbelievers pay jizyah (subjugation tax) after they are humbled or overpowered."

(That quote is on page 86 of his book - yes - please read the context)

To be continued with reference to your link:
Posted by Vickie, Saturday, 26 October 2013 10:10:20 AM
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The link you gave me has Mr Usmani stating this...
I took the second view and explained that jihad is not meant only when an Islamic state is actually attacked by an alien force, but it is meant also as a preemptive action when the honor and freedom of Muslims is in danger from any alien force. And this is what is meant by “iqdami jihad” which is wrongly translated as “aggressive” or “offensive” jihad.

Attacking because 'honor and freedom of Muslims is in danger'... (hmmm - freedom to impose sharia? )...he continues..'Thus the main substance of my answer was that merely allowing Islamic missionaries entering into a non-Muslim country does not mean that it has no hostile designs against Islam and Muslims. It is possible that despite allowing Islamic missionaries working on its soil, a non-Muslim government is a political danger to the freedom and honor of an Islamic state, in which case jihad is not forbidden.'
(I see, we have to be open to missionary activity and politically open to the rise of the Islamic state - something many wish to democratically oppose - but this opposition may legitimately result in violent jihad because opposition is a reason for this?)
Now Usmani also says this in the link you sent me. '..whatever I have mentioned in my letter on jihad is relevant to a formal/regular Islamic state. It has no relation to the individuals living in a non-Muslim country.' However you can read above the reference to non-Muslim lands and I have that letter in front of me. The context is to (quote) 'break the grandeur' of a non-Muslim state - (over Muslims). I'll leave those thoughts with you - I'll be away for a couple of weeks from Monday Grateful. Take care. Vickie
Posted by Vickie, Saturday, 26 October 2013 10:10:56 AM
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