First Published: 2010-04-18

Islamic finance restores 'transparency' to banking

Islamic banking offers 'accountability', to become 'more acceptable' in non-Muslim countries.


Middle East Online

Tun Musa Hitam, head of World Islamic Economic Forum

BRUSSELS - The missing ingredients of "responsibility, transparency and accountability," glaringly absent throughout fraudulent Greek reporting to the EU, were instead to be found in Islamic finance, the head of the World Islamic Economic Forum has said.

"The methodology of Islamic banking will become more acceptable, even without being in Islam," Former Malaysian deputy prime minister Tun Musa Hitam said.

He cited a surge in the numbers of specialist economic religious ulama, who re-interpret Sharia law for expansion throughout non-Islamic territories.

Sharia prohibits interest on money and re-distributes added value based on goods not paper.

Moody's Investors Service said earlier this month that the Islamic finance industry had a market potential of at least 5.0 trillion dollars -- more than five times its actual 2009 value.

"Seen from the east, from developing countries, we're laughing because they're not doing what they taught us," Tun Musa said of the EU's decision to protect Greece rather than sending Athens to the International Monetary Fund.

"You find that a European nation has adopted anything but good practice, which has resulted in a disaster (and) now the name and the prestige of the European Union is at stake, but more importantly, its economies," he added.

"The normal way of resolving these issues is to go to the IMF. Developing countries do that, but not the EU.

"It's yes, no, maybe every day," he said.

Tun Musa maintained that the Western system where "anything goes in terms of lending and conduct" lay behind the Greek fiscal disaster.

A host of countries, led by Britain but stretching from Italy to Japan and Russia, are planning joint Islamic finance ventures, seen as filling a perceived vacuum in confidence.

The march of Islamic finance will form a major plank of the WIEF's sixth annual conference in Kuala Lumpur next month.

Tun Musa even blamed default in Dubai on the penchant in the Middle East to "look West". A heavy hit endured by Singapore during the Asian financial crisis of a decade ago, was due to the same problem, he added.

"Malaysia was hit least because we did not put our money in the West," he insisted.

Tun Musa said the onus was on Europe to find the political will to face down anti-immigrant, anti-Islam extremists.

Turkey's long-stalled talks on EU accession represented the perfect test if Western and Islamic financial and economic models were to be successfully fused post-crisis.

Europe was "going to lose a huge stabilising community that is playing a very important role as a bridge between the Muslim and the Western world," he warned of a move, led by German Chancellor Angela Merkel, to pull back from full membership talks.

"There will come a time that the Turks say 'enough is enough, we're going our own way'", he stressed.


Iraq forces press Mosul assault

Clashes, air strikes end Aleppo ceasefire

UN call to extend Yemen truce falls on deaf ears

Turkey reports over 35,000 people in detention after coup attempt

In violation of constitution, Iraq parliament votes to ban alcohol

Mosul refugees under IS fire at Syrian border

Morocco king calls for public administration reform

Israeli air force strikes Gaza

Russia not considering renewing Aleppo ceasefire

Israel minister: ‘we will completely destroy’ Gaza in next war

Mosul battle sees highest number of US air strikes yet

74 jihadists dead after IS assault on Kirkuk

Palestinians free four held after visiting settlement during Sukkot

IS executes five Iraqis in western town

Baghdad denies Ankara taking part in Mosul operation

Iraq forces fight to tighten noose around Mosul

Turkey hits Kurdish group in Syria again

Kremlin aims to 'liberate' Syria with Assad in power

Egypt court upholds 20-year sentence for Morsi

Turkey PM warns EU: Turkey has alternatives!

Battles rage in Yemen despite three-day truce

For second day, Iraq forces clash with ISIS in Kirkuk

New report accuses Syria of chemical attack in Qmenas village

Islamic Jihad stages show of force in Gaza

UN says 'crimes' in Aleppo are 'of historic proportions'

IS sniper kills Iraqi journalist in Kirkuk

US official says coalition should target IS in Raqa after Mosul

Moscow extends Aleppo ceasefire

Italy PM says officials should have voted against UNESCO Jerusalem resolution

Syrian ‘Toy Smuggler’ accused of fraud

UN: IS may use civilians as human shields in Mosul

Armed men attack refugee boat off Libya

US says will work with Turkey to deal IS 'lasting defeat'

Moscow ‘highly concerned’ at jihadists’ refusal to leave Aleppo

Four Palestinians arrested by their security forces for settlement visit

Mauritania president says no change to two-term limit

UN delays Aleppo evacuations due to lack of security assurances

Oman denies reports of arms smuggling to Yemen

Israel looking to buy three more German submarines

83 migrants rescued off Cyprus

Under pressure in Mosul, IS fighters attack Kirkuk

Air strikes hit Yemen rebels despite ceasefire

US officials: Iran boosting arms sales to Huthis via Oman

Iraq forces make gains against IS near Mosul

Arab coalition accuses Yemen rebels of breaching truce