In my career, I have been to many Islamic finance conferences across the globe. I have met dynamic individuals with creative ideas, dedicated leaders with an acute focus, and prominent policymakers that shape economic relationships. Many argue that these conferences are becoming repetitive, and serve no real benefit. I disagree. Even as I become a seasoned attendee, I still gain, however little, from these conferences. There will always be something new to learn, someone new to meet.
Conferences are also statements of intent whatever the headline topic may be. The 9th World Islamic Economic Forum, held between the 29th and 31st October, at the Excel in London was undoubtedly a statement of intent. A concordia of passionate Islamic financial practitioners, ethical businessmen, and world leaders congregated to extol the virtues and principles of Islamic economics. On the first day alone, 15 world leaders amassed creating what one commentator described as the Muslim Davos.
And in this arena, Conservative leader and British Prime Minister, David Cameron announced the UK government’s intention to make London an Islamic Finance hub through the issuance of a sukuk by 2014, and the creation of an Islamic index. The Mayor of London, with his guffawing buffoonery and strange mix of intelligence and wit, stomped through the halls of the Excel, symbolising his intent of bringing Islamic financial business into the country. Baroness Warsi, another Conservative politician, proudly witnessed the results of her efforts in bringing WIEF into the UK. In previous speeches, she has recognised the potential of Islamic economics to counter the worst aspects of capitalism.
The Islamic finance industry was delighted, pleased with such support; delighted with the grandeur of the occasion. But I felt a slight degree of sadness. Yes, I am proud Islamic finance has risen from the backwaters of Egypt to become a global industry; yes, I am proud that Muslims are securing top positions in multinational organisations; and yes, I am proud that the Islamic finance system is being acknowledged as a real alternative to the conventional system. But there remains a worry in me, eloquent summarised by the Prince of Wales.
In a speech at the WIEF, Prince Charles concisely addressed the encroaching environmental problems caused by the intense productivity resulting from global capitalism as it is practiced today. As an economist, we acknowledge that scarcity is the foundation from which the theory of demand and supply with the associated concepts of quantity and price are formulated. So with greater and more efficient campaigns on resources, resources are diminishing, prices are increasing and wealth is concentrating into the hands of a few. All this does not bode well for the planet.
Without a planet that can sustain its inhabitants, then what use is finance? To put it another way, and more provocatively, what value does Islamic finance offer if it fails to address the myriad of problems that the world is currently suffering from? Prince Charles threw the gauntlet down for the industry to prove itself as a true alternative that meets the needs of society. His reference to the Quran suggests that he is well aware of what Islamic finance can offer, but by offering the challenge, beneath the lines, the Prince of Wales was expressing disappointment at the current guise of Islamic finance.
We in the industry cannot let the industry be hijacked by parochial aims and programmes that create disparity. This is not to say that the industry is doing such, but it is to say that it is a real possibility. This month’s issue of ISFIRE focuses on certain positive and negative issues in Islamic finance, and Islamic economics as a whole. The reader may feel there is some negativity in the tone. We do not wish to be. But we have to be constantly aware of the challenges. The world is crying out for a more equal system. Islamic finance cannot then rest on its growth rates and political support, especially by those whose horizons are limited by time and social pressure. There is too much good the industry, and the broader Islamic economy, is giving to the world. We celebrate this, but we should not rest on our laurels.