Thursday, November 06, 2008

America’s Introduction to Islamic Finance 101 – The Good, the Bad, and the Ugly

With the economic melt down engulfing the American financial markets, a new light has been seen as possibly offering hope. A new ideology in banking and finance has merged in America, or rather a very old system finding a new path in the modern world. With the disturbingly exploitative practices of the mortgage and loan industry America has seen a 57% increase in foreclosures coupled with unemployment rates hitting a 5 year high as well. In just over 20 years we have seen over a 700% increase in the American deficit, with no relief in sight.

One of the options currently being pursued as an avenue of lessening the economic hardships, and offering essential financial services for a growing community of Muslim investors, as well as an increasing segment of ethical/socially conscious investors is “Islamic Financing”. The demand for Islamic Finance has increased dramatically and now accounts for roughly 800 million in assets while growing at around 15% per year, making it a market aspect undeniably in need of closer examination. To this end the Department of Treasury recently scheduled an event to explain in more detail the concepts of Islamic Finance to the most important persons in regards to policy making. The event, entitled “Islamic Finance 101”, was designed to fulfill a specific need:

“To help inform the policy community about Islamic financial services, which are an increasingly important part of the global financial industry. The Department of the Treasury, working with Harvard University’s Islamic Finance Project, will host speakers from academia and industry to share information on the development of Islamic finance, both in the United States and globally. The primary audience of this seminar is comprised of staff from U.S. banking regulatory agencies, Congress, Department of Treasury and other parts of the Executive Branch.”
The Good

In theory, Islamic financial products are aimed at investors who want to comply with the Islamic laws (Sharia) that govern a Muslim's daily life. These laws forbid giving or receiving interest (because earning profit from an exchange of money for money is considered immoral); mandate that all financial transactions be based on real economic activity; and prohibit investment in sectors such as tobacco, alcohol, and gambling. Islamic finance seeks to promote social justice by banning exploitative and deceitful practices. This frees the consumers from such unfair practices like interest (riba) which can often effectively strangle the life out of many business owners, or other such borrowers. This partnership is essential to benefiting the community as a whole since the borrower has responsibilities himself and to the loaner for his success, and the originator of loan has a need to ensure the success of the borrower so that they will see a return on their investment. Together this shared accountability, creates a actual “Working” relationship between the two entities, rather then the traditional parasitic relationship in which the originator of the loan reaps the rewards and benefits of others hard work, while essentially offering very little if any support.

The Bad

While several entities such as the Islamic Development Bank are playing key roles in the development internationally acceptable standards and procedures while strengthening the sector's architecture in different countries, there are still rather large, complex challenges to developing a framework for governing, supervising, and regulating Islamic banks since there is no common approach among countries where Islamic banking exists. Two of the most common approaches are that Islamic banks should be subject to a supervisory and regulatory regime of central banks that is entirely different from that of conventional banks (currently practiced in Yemen and Malaysia). The second main view recognizes the uniqueness of Islamic banks' activities, but favors putting them under the same central bank supervision and regulatory regime as that for conventional banks, with slight modifications and special guidelines (as practiced in Bahrain and Qatar).

Other international institutions that are working to set Sharia-compliant standards include the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the Islamic Finance Service Board (IFSB), the International Islamic Financial Market, the Liquidity Management Center, and the International Islamic Rating Agency. As reported by the International Monetary funds quarterly, Finance and Development a number of countries and institutions have adopted accounting standards developed by the AAOIFI, which complement the International Financial Reporting Standards. The IFSB aims to promote the development of a prudent and transparent Islamic financial services industry and provides guidance on the effective supervision and regulation of institutions offering Islamic financial products. The IFSB has recently finalized standards on capital adequacy and risk management, and has made progress in developing standards on corporate governance. Once developed and accepted, these international standards will assist supervisors in pursuing soundness, stability, and integrity in the world of Islamic finance. So while Islamic Banking and Finance are making strides, even breaking new grounds in America, there still remains an arduous task before numerous groups who are independently working on a collective goal.

The Ugly

The Islamic Finance 101 seminar has brought a considerable amount of negative criticism which claims to expose the seditious nature of the Shariah and thus the inherent inequity and contemptuous nature of all things associated with it. This round brings out such notable figures as the embodiment of the Anti-Islamic movement Robert Spencer, as well as his faithful supporters from such groups as Members of the Coalition include Concerned Women for America, ACT for America, Institute for the Study of Islam and Christianity, the Zionist Organization of America, Traditional Values Coalition, Center for Security Policy, Endowment for Middle East Truth, Unity Coalition for Israel, Let Freedom Ring, Christian Solidarity International, Tradition Family & Property Inc., Women United, Jewish Action Alliance, Florida Security Council, Society of Americans for National Existence and the Center for Security Policy.

Under the banner of “The Coalition to Stop Shariah” which claims to speak for peoples of all faiths and political affiliations who “do not want to submit to the jihadist doctrine of Shariah”. Let us take a moment to examine the nature of these peoples of all faiths and political affiliations:

Coalition include Concerned Women for America - The mission of CWA is to protect and promote Biblical values among all citizens - first through prayer, then education, and finally by influencing our society (excerpt from the official mission statement of the CWA)

ACT for America - Create a nationwide network of chapters in order to more effectively inform, educate and mobilize Americans regarding the multiple threats of Islamofascism, and what they can and must do to protect themselves and their country against this determined enemy (from the official mission statement of ACT)

The Institute for the Study of Islam and Christianity (ISIC) is an independent non-profit academic institute, on the cutting edge of the study of Islam, Christianity and Muslim-Christian relations. In the contemporary context of increasing tensions between Islam and the West, we aim to present an objective, robust and rigorous understanding of the relevant issues and their implications for Islamic and western societies. A rather politically safe introduction to ISIC, however if you look a bit further into their director, Dr Patrick Sookhdeo an Anglican priest, you will notice a stream of very anti-Islam themed articles and papers.

The Zionist Organization of America - Since its founding in 1897, the Zionist Organization of America has been fighting for the Jewish people and the Land of Israel. The ZOA is the only organization that documents and exposes Palestinian Arab violations of the Road Map plan. The ZOA leads the efforts on behalf of American victims of Palestinian Arab terrorism. The ZOA's campaigns have repeatedly led to the defeat of hostile critics of Israel who were nominated for important government positions.

Traditional Values Coalition is the largest non-denominational, grassroots church lobby in America TVC which speaks on behalf of over 43,000 churches. (Official introduction to the TVC)

Center for Security Policy founder - president and CEO Gaffney, Frank J. Jr. has produced a steady flow of anti-Islamic content in numerous publications.
Endowment for Middle East Truth - Israel has been on the front lines of the struggle to preserve both its very life and the values it embodies of democracy, human rights, tolerance and pluralism against the forces of radical Islam. We, at EMET, believe that in the perception of the radical Islamists who have waged war against our civilization and its democratic values, the United States and Israel sit in a common trench (official introduction of EMET)

Unity Coalition for Israel - The mission of Voices United for Israel is to focus the efforts of secular and religious organizations and individuals for whom the existence of the State of Israel is central and essential to the future of the free world. We educate these organizations and individuals on security issues and radical ideologies, including global Islamic terrorism, affecting not only Israel, but all of Western Civilization. (Official mission statement)

Christian Solidarity International - CSI is a Christian human rights organization for religious liberty helping victims of religious repression, victimized children and victims of disaster. Examination of their writings, in particularly under the human rights category reveals an anti-Islamic ideology.

The reason I took the time to actually identify these organizations and their basic principles is simply to help illustrate that their claim to speak for people of all faiths and political affiliations is nothing more then a farce. This coalition is nothing more then a gathering of anti-Islamic propagandists who oppose the United States own governmental plan on an introduction to Islamic financing based on nothing more then a biased view of Islam and Islamic Law (Shariah).

A fatal flaw in the principle beliefs of individuals and groups alike who are so compelled to hate everything about Islam is that they are blaming individual acts on the whole of the religion. They take the most sensational interpretations and opinions and use it as ammunition to discredit anything with Islam. Fortunately the reality of truth can not be extinguished by misguided interpretation and opinion, and there are some who are still able to see the benefits of something even if they can not accept its whole completely.

U.S. Treasury Department's sponsorship of a training seminar on managing U.S. financial assets in compliance with Shariah Law is a sign that despite the apprehension to promote anything Islamic that is so clearly visible, it is still possible to put these biases aside and take something that is clearly beneficial and apply it to a situation that is dire need of help. Following in the steps of several European countries, the US has seen the potential promise of Islamic Banking and Finance.

“Islam all too often resonates negatively in Europe, with a great part of non-Muslim public opinion uncomfortable with Islamic culture and values. Secular and Christian opinion is at best suspicious of shariah, Islamic law, and indeed often antagonistic. The notion of wanting to apply shariah principles to banking and finance is treated with scepticism if not outright hostility, especially as there is no concept of Christian or Jewish banking, even if there are some parallels between shariah financial principles and the teaching of the Old Testament. Yet Islamic finance is thriving in Europe, and many major European banks perceive it as a profitable opportunity to generate new business rather than as a threat to existing business. Although Islam is sometimes viewed as prescriptive and concerned with restricting choice, Islamic finance is about widening choice, and in particular about providing alternatives to interest based finance. The aim is to develop financial products that are seen as ethical and within the realm of socially responsible investment. The approach in this research is largely thematic and institutional rather than geographical, with the subject viewed from a European rather than an Islamic world perspective.” Islamic Finance in Europe, Rodney Wilson, 2007.

Saturday, May 31, 2008

Extremisms newest victim – Doughnuts and Ice Coffee

Dunkin Doughnuts and the domestic queen of the small screen Rachael Ray became the latest victims of extremism, but it was not the “Jihadi Islamists” this time that threatened the free world. Rightwing extremism was at its best when it forced national chain Dunkin’ Doughnuts, known for their coffee and baked goods, to pull what had become a controversial online ad campaign featuring the Food Networks mega star, celebrity chef Rachael Ray.

In the advertisement Rachael Ray is seen in a park, standing in front of trees with pink blossoms and a building with a distinctive spire holding an iced coffee. The seemingly picturesque add is apparently not exactly what we are led to believe because a black and white checkered keffiyah that inconspicuously adorned her neck is actually "symbolic support for Muslim extremism and terrorism."

How could we have know if it were not for the ultra-conservative (rightwing) bloggers who have touted that the ad “casually promotes the symbol of Palestinian terrorism and the intifada, the keffiyeh, via Rachael Ray.” even labeling the clothing selections as “Jihadi chic”. How many Americans have been fooled into purchasing these delicious ice cold coffee drinks from the machinery of Jihadi Extremism!

Needless to say, Corporate America once again folded under the criticism of conservative would be pundits whose scare tactics continue to not only pressure, but to shape and change public perception and by association, corporate policies as well. Dunkin’ Doughnuts announced that it would no longer be using the Rachael Ray ads “because the possibility of misperception detracted from its original intention to promote our iced coffee.” So mindful of the implications of being labeled as sympathetic to Islamic Extremism, Dunkin’ Doughnuts went even further to explain the clothing selection “In a recent online ad, Rachael Ray is wearing a black-and-white silk scarf with a paisley design,” it said. “It was selected by a stylist for the advertising shoot. Absolutely no symbolism was intended.”

For all of the freedom these people claim to be defending, is it not hypocritical of them to attempt others to force others into conforming to their own ways. Is it wrong to wear anything that is reminiscent of the Middle East? Are we to close down that shwerma and falafel shop on the corner out of fear of ‘Culinary Jihad’? It is a sad day when corporations collapse so easily because of the paranoia of others.

Monday, March 03, 2008

Fundamental Difference Between Islam and Science

(a.k.a. Validating Islam through Science)

In an era of unprecedented access to information we have seen a dramatic rise in scientific understanding. Diseases that were once fatal have been cured or treated, examinations into the molecular level of almost every living thing is common place, we can even send people into space and yet with all of this knowledge there is still a longing by the majority of the world for something more profound. The information we feed our intellects does not always satisfy our soul (I would dare to say never does) so the vast majority of people turn their attentions towards a higher power. It is through the recognition of this higher power and its guidance do we begin to reconcile our soul and intellect; offering an insight and understanding into the unknown and unseen, the world that touches our very existence as well as explanations of the world before us, the one we touch within the constraints of our senses.

Physical sciences seek justification within the context of scientific method, using empirical evidence to explain the world around us. “Science refers to a system of acquiring knowledge. This system uses observation and experimentation to describe and explain natural phenomena.” Thus it is through observation, experimentation and reproducible results (the key to scientific method) that people seek to rationalize the world around them. Theology, or the Science of Theology as some refer to it is “the systematic study of God and His divinity, the science concerning God ... the study and analysis and knowledge that treats of God and of God's attributes and relations to the universe, like creation, providence, salvation”

The fundamental difference can be seen not in the approach to the topics but the very nature of the topics themselves. One deals with the worldly while the other deals with the spiritual, but neither necessitates the cancellation or refutation of the other for each has its own space in our world. While physical sciences are based on tangible, measurable qualities, theology is based on the intangible, immeasurable quality of faith therefore it is to me irrational for one to use one to validate the other.

Scientists do not use religion, or more to the point do not use God to their work, why should we use science to try and prove God; the creator of all things, Allah (SWA) does not need to be validated through worldly science.

In the end we can see that in science they have faith (called theory) but seek to manifest this belief with statistical data produced from experimentation, but in theology (religion) there is faith, which seeks to manifest itself in spiritual peace and harmony, a sense of security in the life of the hereafter. While we can boast of the scientific miracles of the Qur’an we should never feel the need to justify Allah’s existence through science, his divine wisdom is most apparent in its spiritual nourishment. We can seek divine inspiration through the revelation of scientific understandings, and we can appreciate it was science that proved these inspiration, but science and theology should not be seen as contrary forces seeking to discredit each other, rather as two parts of the same coin, for all of this world, physical and spiritual is under the auspices of Allah (SAW).

Saturday, February 16, 2008

Wisdom of the Fly

The oft maligned housefly, for millennia considered nothing more then a nuisance or pest was given a different standing in life just over 1400 years ago. That seemingly insignificant fly had other purposes beyond human understanding at that time, and only now have we began to understand its purpose and properties revealed centuries ago to the Prophet of Allah, through modern science.

Sahih Bukhari - Volume 4, Book 54, Number 537:

Narrated Abu Huraira:

The Prophet said "If a house fly falls in the drink of anyone of you, he should dip it (in the drink), for one of its wings has a disease and the other has the cure for the disease."

As we see from the aforementioned hadith, there was an understanding about the nature of flies given to us by Allah through the Prophet Muhammad but only recently have we began to been able to understand this logic behind this.
“The surface of flies is the last place you would expect to find antibiotics, yet that is exactly where a team of Australian researchers is concentrating their efforts. Working on the theory that flies must have remarkable antimicrobial defences to survive rotting dung, meat and fruit, the team at the Department of Biological Sciences, Macquarie University, set out to identify those antibacterial properties manifesting at different stages of a fly’s development.”

And so the search began to verify, even unknowingly the wisdom revealed 14 centuries ago, in hopes of finding a new antibiotic agent for curing more of today’s ailments.

"Our research is a small part of a global research effort for new antibiotics, but we are looking where we believe no-one has looked before,” said Ms Joanne Clarke, who presented the group’s findings at the Australian Society for Microbiology Conference in Melbourne this week.”

It was only through the study of that they were able to glean some understanding of the antibacterial nature of the fly.

“Flies go through the life stages of larvae and pupae before becoming adults. In the pupae stage, the fly is encased in a protective casing and does not feed. "We predicted they would not produce many antibiotics," They did not, However the larvae all showed antibacterial properties (except that of the Queensland fruit fly control). As did all the adult fly species…Such properties were present on the fly surface in all four species”

One would of course wonder how this relates to Islam and modern science, or specifically how it is overall beneficial to mankind, so let us look further

“The antibiotic material is extracted by drowning the flies in ethanol, then running the mixture through a filter to obtain the crude extract. When this was placed in a solution with various bacteria including E.coli, Golden Staph, Candida (a yeast) and a common hospital pathogen, antibiotic action was observed every time. We are now trying to identify the specific antibacterial compounds. Ultimately these will be chemically synthesised. Because the compounds are not from bacteria, any genes conferring resistance to them may not be as easily transferred into pathogens. It is hoped this new form of antibiotics will have a longer effective therapeutic life.”

So it is clear now, that Flies do indeed have antibacterial benefits even on their exterior body, and when put in context of revelation over 1400 years ago, is it not possible even for those who don’t believe in Islam of Allah, that there obviously was some understanding and wisdom behind this saying of the prophet?

Needless to say this is of course not the first time studies into the properties of flies has been conducted, and it is not a new premis, being able to trace this to at least 1927 in the Journal of Experimental Medicine entitled -

“BACTERIOPHAGE ISOLATED FROM THE COMMON HOUSE FLY (MUSCA DOMESTICA). BY RICHARD E. SHOPE, M.D. (From the Department of Animal Pathology of The Rockefeller Institute for Medical Research, Princeton, N. Y.)” which concluded with:

Summary and Conclusions
1. Bacteriophage active against four species of bacteria was found
in a salt solution extract of house flies.

2. A growth-inhibiting principle, not bacteriophage, active against
four other species of bacteria was found to be present in the same

The search began a long time ago and will continue to go on from non Muslim scientists hoping for new antibiotics and from Muslim researchers hoping to scientifically prove further the miracles of the Quran and Wisdom of the Hadith.

To read about either study further online please visit:

For the study by The Department of Biological Sciences at Macquarie University -

For the Study in the Journal of Experimental Medicine please visit: (properly referenced: J. Exp. Med. 1927 45: 1037-1044.)

There is of course, much more information on this subject, but to find specifically neutral resources that are unbiased and available online I chose the above mentioned studies. Further research will offer your more insight into the subject, however when verifying the nature of a religious saying, edict, or passage virtually all resources will of course be biased in the eyes of others, and will of course be conducted by the followers of the faith and thus their objectivity will questioned. In the end you must decide yourself weighing the “science” against the faith” to see if it makes sense to you, as for me – my faith needs to scientific proof, but it does make for an interesting article now and again.