BBC: Islamic Finance is a Dishonest Business Run by Dishonest People
The BBC has published an article by Mr. John Foster, who used to be editor of “Islamic Business & Finance” magazine.
The topic of the article is described by its title: “How Sharia-Compliant is Islamic Banking?”
But it is not really the topic which makes the article interesting. It is the details which make it interesting, as well as important aspects which Foster either ignores or for some reason left out of his article.
The article never really answers the question posed in its title, but it does reveal a great deal about the Shariah scholars who control the Shariah Finance industry.
First of all, Foster refers to Mufti Taqi Usmani as the “grand-daddy of modern Islamic finance.” This may well be the case, but for Foster to point that out without providing the reader with some background on this very important person in the world of “Islamic finance” is irresponsible and poor journalism. It is basically lying through omission. For more information on Usmani, check out our work on him from SFW’s archives:
Taqi Usmani is an enemy of Great Britain. He is certainly an enemy of the United States as well. In fact, Usmani is an enemy of all of Western civilization and the fact that Foster glosses over such a Jihadist monster and even essentially places him on a pedestal is just horrible. I refuse to believe that Foster doesn’t know about Usmani’s beliefs and past work.
Without coming right out and saying so, the article explains that some of the Shariah-compliant products are concoctions produced to pass muster with Shariah scholars, but those products are actually based on conventional products. This is especially true of sukuk–Islamic bonds–and Islamic mortgage products. When you back out the fees and charges, sure enough they seem awfully similar to conventional interest rates in terms of their outcome. (Except that they are more expensive for the consumer and the sukuk have a higher default rate that conventional bonds.)
Note also that the industry seems quite cynical. Western financial services folks create products and then shop them (with cash in hand) to Shariah scholars until they can find one willing to whore himself out enough to approve the product. This suggests that Shariah Finance is largely smoke and mirrors and hardly the “ethical” alternative that financial jihadists claim.
But observers should be careful not to think that Shariah is smoke and mirrors. Shariah is very real and hundreds of millions of people around the world suffer under it. And since the purpose of Shariah Finance is explicitly to promote Shariah, there is just no separating the two.
The BBC builds a picture of a sector with dishonesty at its core, with Western participants with no interest in its outcome and effects beyond commissions and fees and Shariah scholars who are little more than hucksters out to make a buck.