Today we continue the enumeration of problems associated with Islamic banking as listed by Sookhdeo.
Why non-Muslims are drawn to Islamic Banking
§ In some countries non-Muslims are drawn to these banks; some, because of good profits; others, because they regard the system “as more ethical, fair, and stable” than the “predatory” Western institutions (pp. 52, 56, 76, 78).
Copies of Western Banks
§ “Contrary to their goals, the tendency is for the emerging Islamic economy to be driven by market forces and to become an integrated subdivision of the Western-dominated global economy.” Some see it as just copies of Western institutions (p. 55).
Creating Artificial Needs and Wants
§ “It is clear that the Islamist movements have artificially generated the need and demand for sharia finance” (p. 79). Boer: If Sookdheo does not object to the ways of Western banks and business in general, why should he object to this feature in Islamic banking? They both do the same thing: Create artificial needs and wants. The goose and gander kick in once again.
Driven by Politics, not Religion
§ The demand for this system “is not a purely religious phenomenon.” Sookhdeo holds the “assumption that sharia finance is a politically-driven Islamist invention masked in religious idiom” (p. 79).
Pre-eminence of Divine Directive
§ In spite of the negatives listed above, Sookhdeo admits that to Muslims the sharia connection, “this divine directive,” “is the preeminent point and the final say in the matter” (p. 53).
Issues to be Considered by Western Governments
§ The final paragraph in Sookhdeo’s book: The response of governments and other authorities to this process requires urgent and sustained attention. Detailed recommendations cannot be provided here, but we suggest that it would at least be prudent for Western governments to exercise more discernment over their…support for sharia finance, at least to the extent of recognizing…its vulnerabilities and in particular its lack of external accountability. At a time of intense debate in Western countries over the proper role of religion in public life, the possibility of sharia finance’s giving to Islam an inappropriate influence over financial and economic policy must also be acknowledged. Political, economic and financial institutions are wise to take note of any possible threat to their own systems, and to provide necessary checks and balances before it takes effect. The provision of rigorous regulatory mechanisms for Islamic practices and products, according to internationally accepted norms, must therefore be a priority (pp. 56-57).
Summary of Islamic Banking in Various Countries
§ I would urge you to read Appendix 2-4 in Sookhdeo’s book, where he gives a summary of sharia banking in many countries, Muslim, Western and Asian non-Muslim. It is very enlightening to see how countries react so differently.
I want you to realize that though his is a very helpful book, it is not an objective book: It is part of Sookhdeo’s anti-Islamist struggle and thus selective in the topics discussed. Do not look for anything positive or supportive. Such a book is legitimate and I do not criticize Soohdeo for it. In fact, I recommend the book highly, especially for Nigeria that is presently trying to give birth to Islamic banking. Much of his critique of the system is derived from Muslims themselves.
But—and this is a criticism--it is also infused throughout with the semi-secularist dualism so common to evangelicals, that shines through all of Sookhdeo’s work and that partially derails it. While he totally condemns Islamic banking, he does not utter a single critique of the secular Western banking system that has only recently cast the world into an unprecedented downward spiral due to its avarice and carelessness. Sorry, not quite true. There is that one exception of one single word: Sookdheo refers to the Western system as “predatory.” Profoundly true. But that’s it. For the rest, the Western system is implicitly upheld as the standard to which Muslims should conform. Well, that is Evangelicals for you and other Christians afflicted with this semi-secular dualism. It is a serious critique. Missionaries have exported the same worldview into many countries and saddled the church with it. The result is a clumsy and inadequate response on the part of many Christians to Islam.
In spite of that serious critique, Christians, moderate Muslims and governments need to ensure that the budding Islamic banking sector is not in any way tied to militancy and terrorism, whether internally or globally. Sookhdeo demonstrates very convincingly that much of this sector has such connections. It is the reason some Muslim countries are either cautious or have rejected it altogether. Any such institution must be shut down immediately with zero tolerance, for if left to operate, it will be like a cancerous worm that will be difficult to eradicate once it has settled in.
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