Abstract
The biggest financial crisis since 1929 is forcing the world to look for more sustainable financial models that would combine value-creation, stability and morality. Amid the chaos, two financial sectors are thriving: Ethical banking/Socially Responsible Investment (hereafter ‘SRI’) and Islamic Banking and Finance (hereafter ‘Islamic Banking’). The Islamic Banking sector is growing at about 10–15% per year. In contrast with conventional financial institutions the sector has been, so far, mostly insulated from the global financial turmoil. With approximately 1.5 billion Muslims worldwide, including numerous oil and gas producing nations, growth potential is tremendous.
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Notes
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Plato, Laws, Book V; Aristotle, Politics, I, 10; Luke 6:35.
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The subtilities involved in expanding upon different conceptions of interest (as a financial concept, i.e. a preditermined cash flow) and usury (as a despised or forbidden social practice of extracting money) according to different strands in religious and wordly ideologies, largely surpasses the scope of this contribution and even the book
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Reports of the sayings and activities of Muhammad and his companions.
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English translation from Haleem 2004. ‘It was He who created all that is on the earth for you, then turned to the sky and made the seven heavens; it is He who has knowledge of all things.’ [2:29] [Prophet], when your Lord told the angels, ‘I am putting a khalifa on earth,’ they said, ‘How can you put someone there who will cause damage and bloodshed, when we celebrate Your praise and proclaim Your Holiness?’ but He said,‘I know things you do not.’ [2:30]
The concept of Khalifa defines our position in the cosmos as ‘trustees’ of God. As trustees, we have the responsibility to safeguard nature and resources of the planet, and will be accountable for their abuse both in this world and the Hereafter. The Islamic principle of Akharah (‘the Hereafter’) is the concept that we are all accountable for our actions in the Hereafter where depending on our actions we shall be rewarded or punished. The central concept of Islam is Tawheed, it literally means ‘unity of God’ but also implies the unity and equality of all humanity in the eyes of God.
Islam also imposes on the Muslims the concept of Adl, or to do justice but in the most wide-ranging sense of the word. This means that to justice in every aspect of individual and social life is a primary obligation for all Muslims. Very close to the concept of Adl is Istislah, or public interest which a fundamental source of Islamic law. This Islamic principle makes it a responsibility of individuals, communities and the state to consider the common good and welfare of the society and the planet as a whole. Istislah is a far more extensive concept as compared to SRI. All these are fundamental Islamic Principles.
Let me refer to the following hadith:
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The world is green and beautiful and God has appointed you his trustee over it. Clearly, this is undeniably a command to act in an ecological and environmentally-friendly manner.
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God is gentle and loves gentleness in all things. This is in sharp contrast with the calls for blind violence advocated by some self-proclaimed clerics.
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Pay the worker before his sweat dries. From this hadith, we can certainly deduce a recommendation for labour rights. Most unfortunately, this recommendation is often ignored; for instance, the appalling treatment of migrant workers in the UAE is well documented.
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He is not a believer who eats his fill while his neighbour remains hungry by his side. A command to fight famine or malnutrition whether amongst Muslims or non-Muslims. More generally, a call to promote social justice.
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Little but sufficient is better than the abundant and the alluring. This need for sustainability.
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The special character of Islam is modesty. Clearly a recommendation against living materialistic lives.
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Jaufeerally, R.Z. (2012). Islamic Banking and Responsible Investment: Is a Fusion Possible?. In: Vandekerckhove, W., Leys, J., Alm, K., Scholtens, B., Signori, S., Schäfer, H. (eds) Responsible Investment in Times of Turmoil. Issues in Business Ethics, vol 31. Springer, Dordrecht. https://doi.org/10.1007/978-90-481-9319-6_9
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