Foreign Policy has a new report on Islamic finance, the growing industry that combines medieval legal formulas with modern banking. For some, it represents the way forward from the economic crisis and the hope for a new world order. But for others, it is a faith-based scam:
Until the credit crunch of 2008, Islamic finance was a fast-growing, if still relatively obscure, new specialty of international finance. But after Wall Street’s implosion, Islamic finance’s champions have begun to promote the sector as a safe haven from the ills of the global economy. At a Doha conference in late 2008, Sheikh Yusuf al-Qaradawi, arguably the world’s most influential Islamic scholar, asserted that “the collapse of capitalism…shows that the Islamic economic philosophy is holding up.” DeLorenzo is even more sweeping in his claims. “If you had sukuk [or interest-free bonds based on actual assets], the subprime crisis never would have happened,” he says.
Continue reading at Foreign Policy.