01 April 2011
There is much made of the ethical and giving nature of Islamic finance, and indeed there is much made of the practice and principals of Zakat. But for Islamic finance to be more than that, to be more than simply glorified conventional finance with a Shari'ah tint, then there should be more substantive work done - and be seen to be done - by the industry at large.
I am thinking here of more visible and high profile works that are for a great cause by themselves. Some years ago there was talk of more use being made of Waqf monies not only to ensure a better return on the capital employed but to make sure that even better deeds were done along the way.
The reality of many, if not all, Islamic investment banks is that they are hidebound to operate within narrow confines and seldom venture into more socially responsible and more worthy areas. This is a rather long winded way of saying that they all invest in real estate and not much else rather than investing in more altruistic avenues. But surely if Islamic finance is to be about doing things a better way should we not also spend time making sure that we do better things a better way?
If we must invest in real estate then let it be in low cost housing where it is needed, like Egypt and Sudan, rather than throwing up another glitzy office tower in Doha or KL. There is sure to be a decent return on the investment for such projects if for no other reason than simple basic economics. There is demand and not enough supply so there must be a profit to be turned in doing so. I am not calling for charity here - simply better business sense based on worthwhile causes.
-Ends-
There is much made of the ethical and giving nature of Islamic finance, and indeed there is much made of the practice and principals of Zakat. But for Islamic finance to be more than that, to be more than simply glorified conventional finance with a Shari'ah tint, then there should be more substantive work done - and be seen to be done - by the industry at large.
I am thinking here of more visible and high profile works that are for a great cause by themselves. Some years ago there was talk of more use being made of Waqf monies not only to ensure a better return on the capital employed but to make sure that even better deeds were done along the way.
The reality of many, if not all, Islamic investment banks is that they are hidebound to operate within narrow confines and seldom venture into more socially responsible and more worthy areas. This is a rather long winded way of saying that they all invest in real estate and not much else rather than investing in more altruistic avenues. But surely if Islamic finance is to be about doing things a better way should we not also spend time making sure that we do better things a better way?
If we must invest in real estate then let it be in low cost housing where it is needed, like Egypt and Sudan, rather than throwing up another glitzy office tower in Doha or KL. There is sure to be a decent return on the investment for such projects if for no other reason than simple basic economics. There is demand and not enough supply so there must be a profit to be turned in doing so. I am not calling for charity here - simply better business sense based on worthwhile causes.
-Ends-
© Press Release 2011
