Saudi Cleric Calls for Shariah Finance
On Friday and yesterday we emailed you Action Alerts about AIG offering a shariah-compliant insurance product. Last month the Treasury Department hosted a forum designed to educate government and private sector attendees on the Islamic finance market.
Today, we report to you the UK Financial Times story that “Saudi Arabia’s top cleric” has called for “Muslim countries to renounce capitalism and form an Islamic economic bloc that adopts interest-free finance.”
Apart from the fact that shariah “interest-free finance” is frequently disingenuous (in that the financial investments are often structured to provide a profit but the profit is not called “interest”), the pronouncement from Grand Mufti Abdelaziz Al al-Sheikh is but another reminder of the growing threat of “cultural jihad” to the West.
Remember, one of the world’s leading authorities on shariah-compliant finance has termed it “jihad with money.” Stay tuned in the weeks to come as we provide more information and education about shariah-compliant finance.
Top Saudi cleric cites crisis to press for sharia finance
By Abeer Allam in Arafat and Reuters
The Financial Times (UK
Published: December 7 2008 23:16 | Last updated: December 7 2008 23:16
Saudi Arabia’s top cleric has used his annual sermon to Muslim pilgrims assembling for hajj to urge Muslim countries to renounce capitalism and form an Islamic economic bloc that adopts interest-free finance.
Grand Mufti Abdelaziz Al al-Sheikh told worshippers assembling on the plain of Mount Arafat that global economies now caught in crisis were suffering the result of using interest as a bedrock of their financial systems. Under Islamic law, or sharia, paying or receiving interest is forbidden.
The crisis, he said, demonstrated that “Muslim countries must have sharia-compliant economies and unite to become a formidable economic power”.
Islamic banks, which grew rapidly in the Gulf region in recent years from an influx of oil receipts, often depend on retail deposits rather than money markets for funding. As a result, sharia-compliant banks generally demand strong collateral, which some argue is why their exposure to toxic loans is limited.
The white-bearded mufti, wearing the traditional white robes of the pilgrim, also warned young Muslims to stay away from the corrupting influences of the modern media, which he termed “ideological terror” and said was targeting them.
The mufti’s economic edicts are meant to serve more for spiritual guidance, and commenting on a global economic phenomenon is a rare event.
Some pilgrims said that they would pray for an end to the global financial crisis.
Mohammad Fateh, who works for a brokerage in Egypt, told Reuters: “The economic crisis is on the mind of most pilgrims. They are going to pray to God to alleviate the problem...It’s an unexpected crisis and the only solution is mercy from heaven.
“The Arab and Muslim worlds are going to be affected by this crisis. I’ll pray to God to lift this scourge,” he said, adding that many had asked him to offer prayers on their behalf.
The hajj retraces the path of the Prophet Mohammed 14 centuries ago after he removed pagan idols from Mecca, his birthplace, and years after he started calling people to the new faith, now embraced by more than 1bn people worldwide.
At Arafat, Muslims pray for forgiveness and for their own and fellow Muslims’ welfare.
After sunset, the pilgrims were scheduled to continue their gradual trip toward Mecca, heading for Muzdalifa to gather pebbles for the symbolic ritual of throwing stones at a set of pillars and walls representing the devil.
Saudi media said this year a record 1.72m hajj visas had been granted to Muslims abroad and at least 500,000 local people had received permits.
This year’s hajj has so far not faced any of the problems or disasters that have marred the event in previous years, which included fires, hotel collapses, police clashes with protesters and deadly stampedes caused by overcrowding.
Saudi Arabian authorities have carried out renovations over the past year in an effort to ease the flow of pilgrims inside the Grand Mosque and at the disaster-prone Jamarat bridge. In January 2006, 362 people were crushed to death there in the worst hajj tragedy since 1990.
Copyright The Financial Times Limited 2008