For the past 2 years or so, we have noted that Islamic bonds, properly known as “sukuk,” have become the financial weapon of choice for Islamic imperialism.
Here is how that works:
• As we know from historical records and contemporary statements from Islamic leaders, the purpose of Shariah Finance/Islamic economics is to promote Shariah itself.
• Islamic imperialists are now using the credit markets to force Shariah-compliance worldwide, not just among and between Muslims.
• Sukuk impose Shariah-compliance two ways:
1. Islamic issuers increasingly issue Sukuk rather than conventional debt instruments. Therefore, creditors who want to invest in the credit markets are compelled to invest their money in a Shariah-compliant way.
2. On the flipside, Islamic investors who invest in the credit markets are increasingly insisting on Shariah-compliance, thus compelling issuers/borrowers to issue Sukuk instead of conventional credit instruments, such as debentures. This is happening in the sovereign debt markets, as well as the corporate debt markets. The power wielded by oil-rich Islamic nations, institutional and individual investors makes this form of Islamic imperialism to impose Shariah-compliance globally potentially very powerful.
Still many Western observers don’t know what Sukuk are. The financial firm Clifford Chance has published an Introduction to Sukuk. Now, we’re sure they didn’t have Shariah Finance Watch in mind when they posted this guide online, so don’t be surprised if you read their guide if it take a rosy view of Shariah Finance and Islamic bonds. Nevertheless, it is a useful document for those of us who seek to understand what the Shariah Finance industry is doing to spread Shariah around the globe: