2 AAOIFI 20Th Annual Shari’ah Boards Conference - Kingdom of Bahrain

Day 1
Sunday 14 Shawwāl 1443 H, 15 May 2022

8:00 - 9:00   Registration

9:00 – 10:00    Opening ceremony
   Recitation of verses from the Holy Quran
   Keynote speech: Sh. Mufti Muhammad Taqi Usmani, Chairman, AAOIFI
Shari’ah Board

   Conference patron’s keynote address:  H.E. Rasheed Mohamed Al Maraj,
Governor,  Central Bank of Bahrain

   Keynote address: H.E. Sheikh Ebrahim bin Khalifa Al Khalifa, Chairman, AAOIFI
Board of Trustees

   Speech by guest of honor, H.E. Mr. Mahmoud Mohamed Wafa, Chairman,
Libyan Capital Market Authroity, Libya

   Welcome speech: Mr. Omar Mustafa Ansari, Secretary General, AAOIFI

10:00 – 10:30    Mementos presentation: guest of honour and felicitation to sponsors
   Exhibition opening and break

10:30 – 12:00    Session 1: Interactive discussion session on: Integration among Shari’ah and
regulatory requirements

  Session chair
   Dr. Ibrahim Ali Abdullah Al Mansoori, Director of Sharjah Center for Islamic
Economics, Al-Qasimia University, UAE

  Speakers
   Mr. Khalid Hamad Al-Hamad, Executive Director of Banking Supervision,
Central Bank of Bahrain

   Honorable Sh. Yousef Khalawi, Member of Board of Trustees, AAOIFI, KSA
   Honorable Sh. Dr. Ahmed bin Abdulaziz Al Haddad, Member of Shari’ah Board,
AAOIFI, Head of Supreme Board, Central Bank of the UAE, Member of UAE Iftaa
Council, UAE

12:00 – 12:15   Zuhar prayer and break

12:15 – 14:15    Session 2: Applying the new risk-free benchmark rates in Ijarah and Murabaha

  Main themes:

   AAOIFI Shari’ah Board Chairman’s letter to the regulatory authorities around
the globe mentioning the concerns in the adoption of risk free rate (backward
looking, retrospectively applied rates) and its impact.

   The need to have Murabaha with variable return.
   Is there any Shari’ah concern in using the new benchmark rates in standard
Murabaha transactions other than Tawarruq?

   Executing Murabaha at a known and deferred price followed by one / several
Murabaha transaction at spot price to cover the difference in the benchmark
rate based on the binding promise by a party who is obliged to pay the increase.

3AAOIFI 20Th Annual Shari’ah Boards Conference - Kingdom of Bahrain

Day 1 (Continued)

Sunday 14 Shawwāl 1443 H, 15 May 2022
   Executing Murabaha at a known and deferred price with an undertaking to
discount as per the benchmark rate based on a binding promise or as per a
condition in the contract.

   How to cover the risk of repudiation (Nukūl) of acting upon the binding promise
in these structures?

   What is the difference between these structures and Murabaha at a deferred
variable profit linked with a benchmark rate?

   Do the accounting requirements impact the recognition of variable profit in a
transaction structure based on the benchmark rate against recognition of the
total profit as stated in the contract?

   In the Ijarah variable rent – what is the basis of determining the rent of the
Ijarah lease period prior to commencement of the period?

   Determining the rent of the Ijarah rental period at its end based on a
benchmark; shall it impact the knowledgeability of the rent?

   Dividing the Ijarah rental period into two sub-periods wherein the rent of the
first sub-period will be determined and the period shall be longer. The rent of
the second sub-period will be determined prior to its commencement and after
knowing the index and the period shall be shorter and rent of this period shall
address the difference of the first sub-period as per the index

   To make the Ijarah rental period daily or to renew Ijarah on daily basis – is it a
practical structure? And how  offer and acceptance are secured upon renewal.

   The legal stand on variable price and variable rent (general overview).

  Session chair
   Honorable Sh. Esam Ishaq, Member of Shari’ah Board AAOIFI, Chairman and
Member of IFIs’ Shari’ah Supervisory Boards Around the World, Bahrain.

  Speakers
   Dr. Abdullah bin Isa Al-Aydi, Member of Shari’ah committee, AAOIFI, Faculty
member of the Faculty of Shari’ah and Law at Jazan University, KSA

   Dr. Usman Zaheer Mughal, Shari’ah Review & Control Senior Manager, Saudi
British Bank (SABB), KSA

  Commentators
   Honorable Sh. Dr. Abdul Rahman Al Atram, Deputy Chairman of Shari’ah Board,
AAOIFI, Chairman of Shria’ah Board of Alinma bank, KSA

   Honorable Sh. Dr. Aznan Hasan, Member of Shari’ah Board, AAOIFI, Chairman
of Securities Commission Shari’ah Board, Malaysia

   Honorable Prof. Dr. Esam Al Enezi, Member of Shari’ah Board, AAOIFI,
Professor at the University of Kuwait, and Chairman and Member of IFIs’
Shari’ah Supervisory Boards around the world, Bahrain

14:15 – 15:30   Lunch break (sponsored by The Central Bank of Bahrain) and Asar prayer

15:30 – 17:00    Session 3: Variance in the contracts’ vitiators (Mufsidāt Al-Aqd) in terms of
the strength and weakness, and its impact on the Shari’ah provisions (Aḥkām)

  Main themes:
   What is meant by the variance in the contracts’ vitiators?
   The Shari’ah objective (Maqṣad sharī) in the variance of contracts’ vitiators

4 AAOIFI 20Th Annual Shari’ah Boards Conference - Kingdom of Bahrain

Day 1 (Continued)

Sunday 14 Shawwāl 1443 H, 15 May 2022
15:30 – 17:00    The reference of determining the strength and weakness of the vitiator.

   The signs of variance among the contracts’ vitiators.
   Juristic impact resulted from variance in the contracts’ vitiators.
   Applications of variance in the vitiators as per the contemporary practices of the
Islamic financial institutions.

  Session chair
   Honorable Sh. Dr. Ahmed bin Abdulaziz Al Haddad, Member of Shari’ah Board,

AAOIFI, Head of Supreme Board, Central Bank of the UAE, Member of UAE Iftaa
Council, UAE

  Speakers
   Sh. Dr. Basheer Mohammad Ezzeddine Al Ghariani, Member of Shari’ah Board,
AAOIFI, Deputy Chairman, Central authority for legal supervision, Central Bank
of Libya, faculty member of the jurisprudence of transitions in postgraduate
studies at Tripoli university, Libya.

   Dr. Ali Mohamed Bourouiba, Head Shari’ah Audit (Al-Salam Bank Algeria),
Algeria

  Commentators
   Honorable Sh. Sulaiman bin Abdullah Almajid, Former Member of KSA Shura
Board, Former Judge of Court of Appeal, Deputy Chairman of the Shari’ah ’ah
Board, Alrajhi bank, KSA.

   Honorable Dr. Abdul Fattah Al Bezm, Chairman of the Shari’ah Committee of
Syria International Islamic Bank – Syria

   Honorable Sh. Dr. Abdul Nasser Musa Abu al-Basal, Minister of Awqaf Islamic
Affairs and Holy Places, Member of AAOIFI Shari’ah Standards Committee,
Professor at Islamic Economics and Banking Department in Yarmouk University,
Jordan

17:00    End of the day one

5AAOIFI 20Th Annual Shari’ah Boards Conference - Kingdom of Bahrain

Day 2
Monday 15 Shawwāl 1443 H, 16 May 2022

9:00 – 10:45    Session 4: Financing via dynamic Musharaka – between Juristic indigenization
(Ta’ṣīl Fiqhī) and its practical application

  Main themes:
   Meaning of dynamic Musharaka and its working model and process flow in the
contemporary practice

   Indigenization of new ways of applying dynamic Musharaka in short-term
financing (working capital financing).

   Rules of Musharaka financing in the investment portfolio (general pool).
   Rules of Musharaka financing restricted in a particular investment portfolio,
partnership exclusively in particular assets.

   Rules of calculation and distribution of profits of dynamic Musharaka financing /
investment.

   Indigenization of ending dynamic Musharaka based on redemption / exit
(Takhāruj) disregarding the balances in the accounting / financial records.

   Means of risk management in contemporary Islamic banking practice for
dynamic Musharaka

  Session chair
   Honorable Sh. Dr. Abdulatif Mahmoud Al Mahmoud, Chairman of Shari’ah

Raqaba Board, Bahrain Islamic Bank, Bahrain
  Speakers
   Honorable Sh. Prof. Dr. Mohamed Ali Elgari, Member of Shari’ah Board,
AAOIFI, Chairman and Member of IFIs’ Shari’ah Supervisory Boards around the
world, KSA

   Honorable Dr. Irshad Ahmad Aijaz, Member of Shari’ah Standards Committee,
AAOIFI, Chairman, Shari’ah Supervisory Board, Bankislami Pakistan, Pakistan

   Honorable Sh. Omran Ashraf Usmani, Member of Shari’ah Committee, AAOIFI,
President and CEO at Usmani & Co Private Limited, Pakistan

  Commentators
   Honorable Sh. Muhammad Taqi Usmani, Chairman of Shari’ah Board, AAOIFI,
Member of the International Islamic Fiqh Academy, Chairman of IFIs’ Shari’ah
Supervisory Boards around the world, Pakistan

   Honorable Sh. Dr. Layachi Sadek Feddad, Advisor, Researcher, & Expert in
Islamic Banking, Former Member of Shari’ah Board, AAOIFI, Algeria

10:45 – 11:00    Coffee break

11:00 – 13:00    Session 5: The extent of difference between the service agent, the
management agent and the investment agent in terms of liability (Ḍamān)

  Main themes:
   The rule of differentiating between the service agent (including the
administrative agent by disposition), the management agent and the
investment agent (in terms of asset turnover (Taqlīb), investment decisions,
investment plans, expected profit etc.).

   All agents are fiduciaries; so is there a way to differentiate between them in
terms of their respective liability and to stipulate its transfer to them or all of
them will have the same ruling of Mudarib.

6 AAOIFI 20Th Annual Shari’ah Boards Conference - Kingdom of Bahrain

Day 2 (Continued)

Monday 15 Shawwāl 1443 H, 16 May 2022
11:15 – 13:15    Is there a ground to consider the investment agent or the management agent as

a third party that is allowed to give an undertaking for making good the loss (in
general and particularly in Sukuk and syndicated financings)?

   Is there a ground to differentiate between the stipulation of non-permitted
guarantee by an agent and his binding undertaking to purchase what he
possesses for a price determined in the promise?

  Session chair
   Honorable Sh. Sulaiman bin Abdullah Almajid, Former Member of KSA Shura
Board, Former Judge of Court of Appeal, Deputy Chairman of the Shari’ah ’ah
Board, Alrajhi bank, KSA.

  Speakers
   Professor Dato Dr. Koutoub Moustapha SANO, Secretary General,
International Islamic Fiqh Academy, KSA

   Honorable Sh. Dr. Khalid bin Mohammed Al Sayari, Member of Shari’ah
Standards Committee, AAOIFI, Member of teaching committee of the
Electronic university, KSA

  Commentators
   Honorable Sh. Dr. Nizam Mohammad Al Yakubi, Member of Shari’ah Board,

AAOIFI, Chairman and Member of IFIs’ Shari’ah Supervisory Boards, Bahrain
   Honorable Sh. Dr. Osaid Muhammad Adeeb Kailani, Memberof Shari’ah

Board, AAOIFI, Global Head, Shari’ah, Abu Dhabi Islamic Bank Group, UAE

13:00 – 13:15    Keynote address: H.E. Dr. Feras Milhem, Governor, Palestine Monetary Authority

13:15 – 14:30   Zuhar prayer and Lunch break

14:30 – 16:00    Session 6: Shari’ah governance frameworks – their origin, developments and
necessity

  Main themes:
   The origins of Shari’ah governance frameworks and their significant
developments over time.

   The impact of Shari’ah governance framework in regulating and safeguarding
the overall compliance with the Shari’ah principles and rules in the Islamic
financial institutions.

   The benefits of Shari’ah governance framework in enabling the Islamic
financial institutions in fulfilling their fiduciary responsibilities, particularly
towards participatory stakeholders (e.g., investment accountholders, Takaful
participants).

   A study of the latest Shari’ah governance frameworks (the new ones and the
extent of their inclusion).

   Did these frameworks achieve what was expected? If no, then where the fault lies?
   In what situations Shari’ah governance frameworks help development and
growth of the Islamic financial industry, and when they can become a burden?

   What are the examples of countries that followed a good Shari’ah governance
system since beginning, or for long time, and how these benefited the growth
of their industry.

7AAOIFI 20Th Annual Shari’ah Boards Conference - Kingdom of Bahrain

Day 2 (Continued)

Monday 15 Shawwāl 1443 H, 16 May 2022
   An insight into the exposure draft of Revised Shari’ah Governance Framework
which is issued jointly by AAOIFI and IFSB.

  Session chair
   Dr. Walid Hegazy, Deputy Chairman of Governance and Ethics Board, AAOIFI.
Founder and managing partner, Hegazy & Partners, Arab Republic of Egypt

  Speakers
   Mr. Omar Mustafa Ansari, Secretary General, AAOIFI, Bahrain
   Mr. Farrukh Raza, Chairman of Governance and Ethics Board, AAOIFI, Group
CEO, IFAAS (Islamic Finance Advisory & Assurance Services) Co-founder, IFIN
(Islamic FinTech), United Kingdom

   Dr. Saad Alameen Bakkali, Manager – Higher Shari’ah Authority, Banking
Supervision, Central Bank of UAE, UAE

16:00  Conclusion


BLOG OF KNOWLEDGE (Shari'ah, Law, Islamic Finance and Muslim News)
Shari'ah, Law, Islamic Finance and Muslim News
Monthly Archives: December 2012
December 29, 2012
DR. ZULKIFLI HASAN
Merungkai Persoalan Krisis di Syria
Merungkai Persoalan Krisis di Syria
Zulkifli Hasan
Berbanding dengan siri kebangkitan rakyat di Tunisia dan Mesir, krisis di Syria mendapat liputan dan analisis yang agak berbeza daripada pelbagai pihak. Secara umumnya, terdapat dua teori yang berkaitan dengan krisis di Syria. Golongan pertama berpandangan bahawa jatuhnya rejim Bashar Al-Assad akan mengukuhkan pengaruh Israel di Timur Tengah. Golongan kedua pula mempunyai teori dan pandangan yang berlainan di mana krisis di Syria dianggap sebagai sesuatu yang ’genuine’ dan penentangan terhadap rejim Bashar al Assad adalah suatu tuntutan jihad. ’Dichotomy’ dan dua teori yang bertentangan ini telah menimbulkan kesulitan kepada aktivis dan badan bukan kerajaan yang sedang memperjuangkan nasib dan kehidupan rakyat Syria yang kini menghadapi krisis kemanusiaan yang sangat membimbangkan. Hingga kini dilaporkan bilangan penduduk yang menghadapi krisis kemanusiaan akan mencecah lebih 2.5 juta.
Pandangan yang menganggap rejim Bashar al Assad sebagai pengancam Israel dan kejatuhannya hanya akan mengukuhkan hegemoni Israel di Timur Tengah ini disuarakan oleh ramai penganalisis politik dan jurnalis antarabangsa  seperti Robert Fisk termasuk tokoh ulama iaitu Sheikh Imran Hossein. Robert Fisk di dalam artikelnya bertajuk ”Bashar al Assad, Syria, and The Truth About Chemical Weapons” menyuarakan pandangannya mengenai usaha Amerika memburukkan rejim Bashar al Assad dengan hasrat untuk menjatuhkannya melalui tuduhan menggunakan senjata kimia. Ini disokong oleh Professor Michel Chossudovsky di dalam artikel beliau ”Confronting Iran, Protecting Israel: The Real Reason for America’s War on Syria”. Beliau berpandangan bahawa kejatuhan rejim al Assad hanya akan mengakibatkan Syria dapat dikuasai oleh sekutu atau agen Amerika dan Israel dan dengan itu, Hamas dan Hezbollah dapat dihapuskan sekali gus melemahkan Iran yang dianggap musuh dan ancaman kepada mereka. Terdapat juga segelintir ahli akademik tanahair yang cenderung dengan pandangan ini malahan melabelkan pejuang pembebasan Syria ini dengan gelaran ”pemberontak” dan ”pengganas” yang sama sekali bertentangan dengan mauqif ulama muktabar.
Berdasarkan permasalahan di atas, penulis ingin berkongsi pandangan mengenai krisis yang berlaku di Syria dan cuba merungkaikan beberapa persoalan yang kini membelenggu pemikiran sesetengah pihak. Penulis telah merujuk pelbagai sumber makalah, artikel, buku, berita, laporan, jurnal dan sebagainya termasuk menghadiri syarahan ulama tersohor Syria, maklumat sumber pertama sahabat-sahabat di Syria serta penerangan oleh aktivis yang telah masuk ke Syria.  Artikel ini juga ingin memperkenalkan buku terkini tulisan Dr. Zulkifli Al Bakri bertajuk ’Krisis Syria dan Mauqif Ulama’ yang menjelaskan pendirian dan pandangan ulama muktabar mengenai krisis di Syria. Berdasarkan sumber-sumber sahih ini, penulis sangat berkeyakinan bahawa krisis di Syria ini adalah sesuatu yang ’genuine’  dan segala bentuk perjuangan dan bantuan adalah dianggap suatu jihad. Rakyat Syria yang berjihad menentang kezaliman dan kemungkaran diketuai rejim Bashar al Assad ini bukanlah ’pemberontak’ tetapi adalah pejuang pembebasan dan jika gugur dikategorikan sebagai syahid. Bersama-sama dengan rakyat Syria bangun menentang kezaliman, keganasan, ketidakperikemanusiaan dan ketidakadilan adalah suatu tuntutan dan kewajipan umat Islam.
Bagi memahami krisis di Syria ini, perlu juga dilihat terlebih dahulu Syria dari sudut demografi. Syria mendapat kemerdekaan pada 1946 dengan penduduk berjumlah lebih 23 juta. 75% adalah Muslim-sunni tetapi kerajaan Syria dikuasai oleh parti Baath iaitu diwakili minoriti Alawi yang hanya 3-4%. Parti Baath yang minoriti Alawi ini bermazhab Syiah Nusairiah dan berideologi sosialis. Berdasarkan demografi ini, amatlah bermanfaat untuk menelusuri serba sedikit asal usul rejim al Assad di Syria ini. Setelah kemerdekaan Syria telah dipimpin oleh keluarga al Assad. Kemuncak kezaliman rejim al Assad ini telah berlaku pada 1982 di bawah pimpinan Hafiz al Assad (memerintah selama 32 tahun) sewaktu tragedi berdarah di bandar Hamah yang meragut nyawa lebih 40 ribu penduduk, 15 ribu hilang tempat tinggal dan 150 ribu menjadi mangsa pelarian. Bukan itu sahaja, dilaporkan lebih 88 buah masjid dimusnahkan dan infrastruktur awam dihancurkan. Sebegitu ramai ulama dan ilmuan Islam yang dipenjara, diseksa dan dibunuh. Di antara ulama yang menjadi pelarian politik ialah Sheikh Abu Fattah Abdu Ghuddah, Sheikh Said Hawa, Sheikh Muhammad Ali Al Sabuni, Sheikh Muhammad Hashim al Majzub, Sheikh Usamah al Rafie dan ramai lagi.
Bashar al Asad telah mengambil alih pemerintahan daripada Hafiz al Assad pada tahun 2000 setelah Perlembagaan Negara dipinda semata-mata untuk membolehkannya menjadi Presiden yang pada itu belum mencapai umur 40 tahun yang dibenarkan. Beliau meneruskan kekejaman lalu dengan beberapa insiden kemanusiaan seperti peristiwa berdarah Qamisyli pada 2004 dan 2008, peristiwa Hasakah pada 2004 dan peristiwa penjara Soydana. Tragedi 2011 hingga hari ini adalah yang paling trajis di mana telah meragut nyawa ratusan ribu rakyat Syria yang majoritinya adalah Muslim-sunni. Ini disahkan oleh Utusan Khas PBB dan Liga Arab, Lakhdar Brahimi. Malahan kekejaman rejim Bashar al Assad juga telah meranapkan pelbagai kesan sejarah penting Islam seperti Maktabah al Khanji yang dianggap antara perpustakaan tertua dunia yang mempunyai koleksi berharga yang tidak ternilai. Melalui fakta-fakta ini, sudah jelas lagi bersuluh betapa tidak logiknya sebarang pandangan yang menyokong rejim Bashar al Assad atas apa sahaja alasan. Malahan melabelkan rakyat yang menuntut keadilan dengan gelaran pemberontak atau pengganas adalah suatu perkara yang amat dikesalkan.
Selain itu, adalah amat penting juga untuk mengenali Alawi atau Shiah Nusairiah yang pengikutnya menguasai kerajaan Syria. Shiah Nusairiah di Syria ini mempunyai hubungan amat rapat dengan Iran dan Hizbullah. Ini kerana terdapat segelintir umat Islam termasuk di Malaysia yang tidak mempunyai gambaran sebenar malahan memberikan sokongan kepada rejim Bashar al Assad dan menganggap Iran serta Hizbullah sebagai pembela agama dan memberi ancaman kepada Israel. Dilaporkan juga Iran telah membekalkan pelbagai jenis senjata kepada Syria. Ayatullah Ali Khomeini pernah mengeluarkan fatwa bahawa wajib rakyat Iran mempertahankan rejim al Assad. Dalam hal ini, kita perlu merujuk kepada pandangan dan fakta-fakta mengenai shiah Nusairiah ini. Sebenarnya, terlalu ramai ulama muktabar telah terlebih awal memberikan fatwa mengenai kesesatan Syiah Nusairiah. Ibn Taimiyah, Ibnu Kathir, al Zahabi, Sheikh Abdul Aziz Baz dan Sheikh Ali al Sabuni secara jelas memfatwakan shiah nusairiah sebagai sesat. Sheikh Gharib al Sirjani mengatakan bahawa kesesatan shiah Nusairiah ini adalah berasaskan ijma. Oleh itu, sebarang pandangan yang menyokong rejim Bashar al Assad yang juga  shiah Nusairiah ini adalah dianggap perkara mungkar dan menyesatkan.
Bagi mengukuhkan pandangan betapa rejim Bashar al Assad ini perlu diperangi dan dijatuhkan, penulis ingin merujuk kepada beberapa pendirian ulama muktabar kontemporari seperti yang dinukilkan di dalam buku ’Krisis Syria dan Mauqif Ulama”. Sheikh Abdul Aziz Baz pada 1982 berfatwa bahawa wajib memberi bantuan kepada umat Islam yang dizalimi oleh rejim Al Assad. Sheikh Yusuf al Qaradhawi dengan tegas menyatakan bahawa wajib bagi rakyat Syria untuk bangkit menentang rejim al Assad malahan menggesa jemaah haji berdoa untuk kehancurannya. Sheikh Ali al sabuni yang baru-baru ini berada di Malaysia dengan tegas menggesa umat Islam untuk melakukan apa sahaja termampu bagi membebaskan rakyat Syria. Ramai lagi ulama tersohor seperti Sheikh Soleh al Luhaidan, Sheikh Muhammad Hasan, Sheikh Aidh al Qarni, Sheikh Muhammad al Irifi, Sheikh Ahmad Qattan dan Sheikh Wahbah al Zuhaili memberikan pandangan yang sama di mana menyeru umat Islam untuk membantu rakyat Syria menjatuhkan rejim Al Assad.
Krisis Syria dan Mauqif Ulama oleh Dr. Zulkifli Al Bakri
Pandangan dan pendirian ulama muktabar mengenai kewajipan membantu rakyat Syria ini disahkan dan disokong oleh Resolusi Muktamar Syria di Istanbul iaitu persidangan para ulama sedunia pada 1-3 Julai 2012. Muktamar ini secara umumnya menegaskan bahawa revolusi rakyat Syria adalah kebangkitan yang hak dan benar dan adalah menjadi kewajipan semua umat Islam untuk membantu rakyat Syria dan menjatuhkan rejim Bashar al Assad. Muktamar ini merayu agar semua negara Islam di bawah pertubuhan OIC serta negara-negara lain untuk memberikan bantuan kemanusiaan termasuk membekalkan persenjataan. Informasi dan maklumat mengenai resolusi muktamar seperti ini dan bukti-bukti kezaliman rejim Bashar al Assad mungkin tidak sampai atau lambat diperolehi oleh umat Islam dan ini menyebabkan ada yang mempersoalkan tindakan rakyat Syria bangun menentang kerajaan Syria. Ini bukanlah sesuatu yang asing kerana rejim Bashar al Asad seringkali cuba untuk menyembunyikan keganasan mereka. Umpamanya telah ramai wartawan yang telah terkorban semasa membuat liputan di Syria seperti Mika Yamamoto, jurnalis Jepun yang sangat aktif melaporkan kebenaran krisis di Syria.
Dunia telah menyaksikan kebangkitan rakyat bermula di Tunisia diikuti Mesir, Libya, Syria dan kemungkinan negara-negara Timur Tengah yang lain. Namun, revolusi di Syria masih dalam proses menuju kemenangan. Malahan persoalan yang lebih besar ialah nasib Syria pasca revolusi. Berbanding dengan revolusi di Tunisia, Mesir dan Libya, krisis di Syria adalah sedikit berlainan kerana ianya melibatkan pelbagai isu geo-politik termasuk permasalahan shiah Nusairiah serta sokongan oleh Iran dan Rusia dan beberapa negara lain. Teori menjatuhkan rejim al Assad sebagai tindakan meningkatkan hegemoni dan penguasaan Israel di Timur Tengah juga adalah satu perkara yang tidak mempunyai asas yang kuat. Pendirian atau mauqif ulama muktabar di seluruh dunia mengenai kewajipan umat Islam untuk membantu rakyat Syria mengesahkan bahawa kebangkitan rakyat Syria adalah sesuatu yang hak dan benar. Kezaliman dan keganasan tidakperikemanusiaan tahap luarbiasa rejim Bashar al Assad adalah tindakan yang tidak boleh sama sekali diterima akal. Rejim Bashar al Assad ini mesti dibawa ke muka pengadilan dan dibicarakan di Mahkamah serta segala keganasan dan kezaliman ini didedahkan kepada dunia supaya tragedi kemanusiaan ini dapat memberi pengajaran kepada semua umat manusia.
Regards

Zulkifli Hasan
Srebrenica, Bosnia and Herzegovina. More than 8000 Muslims were killed here in July 1995.
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December 29, 2012
DR. ZULKIFLI HASAN
Conceptualising and Locating the Social Failure of Islamic Finance: Aspirations of Islamic Moral Economy vs the Realities of Islamic Finance
Conceptualising and Locating the Social Failure of Islamic Finance: Aspirations of Islamic Moral Economy vs the Realities of Islamic Finance
Mehmet Asutay *
Abstract
Islamic moral economy emerged in the modern sense in the late 1960s and early 1970s as an attempt to develop an authentic understanding of the Islamic system of economics and develop policies accordingly. As part of this concept, Islamic banks and

financial institutions are considered as the institutional aspects of this moral economy, which can pool their resources together to fi nance real economy activity. However, the transformation of Islamic banking into a commercial banking form since mid-1975 has resulted in unprecentedly successful fi nancial performance, which, however, has been at the expense of the ‘social and economic developmentalist’ aspirations of Islamic moral economy. Therefore Islamic banks and fi nancial institutions are criticised for their social failure. This paper, therefore, aims to explore the social failure of Islamic banks and fi nancial institutions and locate the sources of this failure. In moderating the social failure of Islamic banks and fi nancial institutions, this paper suggests that a third institutional development in the form of non-banking fi nancial institutions, such as Islamic social banking, Islamic microfi nance, an awqaf system, ar-rahn or Islamic pawnbroking, and zakah funds should be created with the objective of serving the social and developmental needs of Muslim societies.
Read
Mehmet Asutay: Aspiration and Realities
Regards

Zulkifli Hasan
With my sifu, Dr. Mehmet Asutay, Durham University, UK
Islamic finance news
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December 24, 2012
DR. ZULKIFLI HASAN
Islamic Financial Services Board needs to apply bolder approach
Islamic Financial Services Board needs to apply bolder approach
Mushtak Parker Saudi Gazette Available at:
http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20121223146846
:
LONDON– The Islamic Financial Services Board (IFSB), the prudential and supervisory standard setting body for the global Islamic financial services industry, celebrates its 10th anniversary in 2013. Today, the IFSB is a far cry from those early days in March 2003 when it started operations at its headquarters in Kuala Lumpur with Prof. Rifaat Abdel Karim at its helm as its inaugural secretary-general.
While his successor, Jaseem Ahmed, a former senior executive at the Asian Development Bank, who took over in April 2011, is trying to stamp his own style and vision on the multilateral organization building on the achievements of the past decade, it is clear that the latter still has several major challenges ahead to help facilitate an orderly and holistic development and integration of the global Islamic financial services industry.
It remains a moot point whether the IFSB is perceived to be constrained by its mandate, which is to introduce prudential and supervisory standards, guidelines and practice notes for the global Islamic finance industry in consultation with various stakeholders to promote its orderly and sound development and thereby contributing to financial stability and economic growth.
But to pursue an agenda relating to prudential and supervisory standards seemingly detached from the regulation, authorization, monitoring and enforcement of Islamic financial institutions (IFIs) in member jurisdictions per se is inexplicable because in today’s globalized world they are inextricably linked to each other.
What the IFSB must not do is to behave as if it is a mere multilateral political organization dabbling in passing with financial sector prudential standard setting matters. Financial sector prudential and supervisory standard setting, as other functions relating to the sector, has to be seen to be above politics, national interest and petty nationalisms.

Otherwise the exercise becomes compromised at the onset and the achievements and progress similarly stunted.
This is where character, political will and a thought provoking focused plan of action come into play. The onus is not only on the senior management but perhaps more importantly also on the Governing Council of the IFSB, which met in Jeddah recently and appointed Abdullah Saoud Al-Thani, Governor of Qatar Central Bank (QCB), and Mohammed Rosli Sabtu, Managing Director of Autoriti Monetari Brunei Darussalam (AMBD), as Chairman and Vice-Chairman of the Council for 2013 respectively.
The IFSB has accomplished a lot, but it needs to use these achievements to consolidate its future strategy with a much more urgent and bolder approach, even at the risk of upsetting some of its members.
Its achievements are in some respects understated because they do not necessarily translate into instant headline grabbing or immediate impact initiatives given the nature of standard setting.
In December, for instance, the Council of the IFSB at its meeting in Jeddah hosted by the Islamic Development Bank (IDB) admitted eight new members into the organization.
This, according to the IFSB, brings the total membership of the Board to 184 members comprising 55 supervisory and regulatory authorities from the banking, capital markets and Islamic insurance (takaful) sectors in 41 jurisdictions, as well as eight international inter-governmental organizations, and 121 market players (financial institutions, professional firms and self-regulatory organizations).
The newly admitted members include the Capital Markets Authority, Kuwait and the National Insurance Commission, Nigeria as Full members; and the Financial Reporting Foundation, Malaysia, Prudential BSN Takaful Berhad, Malaysia, Safran Stratejik Yonetim ve Teknolojik Danismanlik Hizmetleri Ltd. Sti., Turkey, the Central Bank of the Turkish Republic of Northern Cyprus, Standard & Poor’s, Singapore, and the Gulf Bond and Sukuk Association, United Arab Emirates as Observer members.
In fact, the IFSB has managed to do far more to promote the internationalization, the demystification and the market education of Islamic finance among central banks and regulatory authorities, multilateral organizations such as the World Bank, the International Monetary Fund (IMF), the International Finance Corporation (IFC), the Basle Committee, and the International Organization of Securities Commissions (IOSCO), and other institutions in the space of a decade than the industry per se has managed to do in its three or so decades of contemporary existence.
And yet even here there remain huge gaps. For instance many central banks or regulatory authorities from the 56 Organization of Islamic Cooperation (OIC) countries are yet to become members. Some prominent regulatory authorities are merely Observer members as opposed to Full members. These are revealing organizational nuances, which affect the very structure of the Board. There are those who question the current organizational model of the IFSB, which seems to have a perennial resource problem. They would prefer the organization to adopt an equity with concomitant voting rights structure, which could give it more resource stability and therefore operational efficacy.
Similarly, the IFSB could hand hold new markets and entrants to Islamic finance by issuing a definitive Islamic Banking Authorization Standard.
Take the case of the Central Bank of Oman, for instance, which oddly is an Observer member while the Capital Markets Authority of Oman is a Full member of the IFSB. The sultanate, following the promulgation of a Royal Decree No 69/2012 issued on Dec. 6, 2012 by the Omani Ruler, Sultan Qaboos Bin Said, officially introduced Islamic banking into the local market on Dec. 8 by “amending some provisions of the Banking Law issued under Royal Decree No 114/2000” and adding “a new Title Six – Islamic Banking” to the said law.
The Royal Decree No 69 became effective as soon as it was published in the Official Gazette No 993 two days later. This means that banks in Oman, hitherto the only Gulf Cooperation Council (GCC) country not to have introduced Islamic banking in its jurisdiction, can now offer Islamic banking products to customers and businesses subject, of course, to the approval from the CBO.
However, even the IFSB admits that the best way to facilitate Islamic banking in a jurisdiction is through the adoption of a dedicated stand alone Islamic Banking Law which takes into consideration the specificities of Islamic banking principles. Yet key members continue to ignore this because they perceive Islamic banking as a mere niche market segment or others still perceive Islamic banking as a mere product offering for which it would suffice for the risks and marketing to be managed and regulated.
Asked “why has the Central Bank of Oman decided to go down this route by amendments to the existing law instead of trying to adopt a new dedicated Islamic banking law”, Hilal Ali Saud Al-Barwani, Deputy Governor and Vice President, Banking Control and Legal Department, Central Bank of Oman, told the Saudi Gazette that it was “really a question of speeding up the process, so it’s expediency. We believe the conventional banking law covers a number of things. So it was only a question of adopting articles specifically for the Islamic banking sector.” Al-Barwani also suggested that Oman may adopt a dedicated Islamic banking Law in the future as the industry settles down and grows.
The point here is that if the IFSB had an Authorization Standard in place it could have helped its members such as Oman to start off on the right track with its legal framework instead of delaying it to the future. Surely this would contribute as much to market perception, certainty and confidence as would purely prudential and supervision standards whether on risk and liquidity management, insolvency measures for both IFIs and takaful companies, Shariah standards, etc.
In fact, IFSB Secretary General Jaseem Ahmed, at the 9th IFSB Annual Summit in Istanbul in May 2012, alluded to the fact that underdeveloped enabling environments, weaknesses in the risk and liquidity management infrastructures within Islamic financial institutions (IFIs), the lack of greater consistency in Shariah opinions, and constraints to human resource capacity continue to be a cause for concern and a focus of policy action.
On the positive side, for instance on the adoption and implementation of IFSB standards by member countries and organizations, Jaseem Ahmed said the Board is making some progress, albeit slow. Another important sign is the emergence of national roadmaps and strategies for the development of Islamic financial sectors, and for their prudential regulation and supervision.
The IFSB in March 2012 launched a new medium term strategy for the period 2012-2015, the Strategic Performance Plan (SPP) that will focus on: i) strengthening the stability and resilience of Islamic finance through the development of a range of new standards and guiding principles aligned with the changes in the global regulatory environment; ii) broadening the range of cross-sectoral prudential and supervision standards and guiding principles including capital markets and takaful thus supporting the development of new instruments; iii) educating its stakeholder community about its work and standards so as to support the adoption and implementation of these; and iv) the launching of a revised “10-year Framework and Strategies for the Development of the Islamic Financial Services Industry” which was first developed by the IFSB in collaboration with the Islamic Development Bank (IDB) and its research arm, the Islamic Research and Training Institute (IRTI).
“The pursuit of financial stability”, said Jaseem Ahmed, “does not however solely depend on regulatory development and prudential standards. It depends also on collaboration and cooperation mechanisms that help all stakeholders towards achieving the common goals of a sound and sustainable financial services industry.”
Indeed, the IFSB and IOSCO are cooperating on introducing “Disclosure Requirements for Islamic Capital Market Products”. The Secretary General of IOSCO, David Wright, has in the recent past called for greater harmonization in disclosure requirements across jurisdictions where Islamic capital markets products are offered.
Wright stressed that “the recent financial crises highlighted the importance of sound disclosure regimes in mitigating systemic risk and building confidence in the financial markets. Given the tremendous growth of the Islamic finance industry – an increasingly important segment of the global financial markets – it is essential to achieve greater harmonization in disclosure requirements across jurisdictions where Islamic capital market products are offered.”
In response, Jaseem Ahmed, emphasized that promoting cross-border financing and investment through Islamic finance is critical to attaining the depth and scale in Islamic capital markets needed to be competitive. “This will require the adoption of robust regulatory and disclosure practices that give confidence to investors and consumers alike. IFSB hopes that this collaboration with IOSCO will facilitate a process leading to a set of practices that could be harmonized or mutually agreed upon,” he added.
Perhaps the IFSB can be excused for choosing the optimistic theme, “The Future of the Islamic Financial Services Industry: Resilience, Stability and Inclusive Growth”, for its 10th Anniversary Annual Summit which Bank Negara Malaysia, the central bank, has offered to host on May 14-17, 2013 in Kuala Lumpur.
The challenge for 2013 is to match this optimism with a more urgent and bolder operational plan through the adoption of not only the usual suspects of outstanding standards and guidelines but also others which are outside that operational black box – all of which would make the IFSB a more effective and relevant organization serving the global Islamic financial industry.
Regards

Zulkifli Hasan
Brussel, Belgium
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December 22, 2012
DR. ZULKIFLI HASAN
Dispelling misperceptions about Islamic finance
Dispelling misperceptions about Islamic finance
By Rushdi Siddiqui Available at:
http://www.theedgemalaysia.com/highlights/227766-dispelling-misperceptions-about-islamic-finance.html
IF we were given an opportunity to pitch Islamic finance to US President Barack Obama as a potential item on the agenda for addressing the financial meltdown at the next world leaders’ summit, how would the conversation flow?

He, being a cerebral and poll-conscious president, would probably ask the tough questions, primarily political with public-sensitivity implications. Perhaps, the question and answer session would go like this:

Obama: The US is a secular democracy with separation between church and state by the Constitution. How can faith-based finance work here?
Rushdi: On every US dollar bill, there are the words, ‘In God We Trust’. We in the industry have taken that maxim literally and turned it into rules-based finance. Let’s remove the word ‘Islamic’ and call it what it really is — ‘risk sharing participation finance’. The credit, subprime and eurozone debt crises were a combination of excessive leverage, Mount Everest-sized over-the-counter derivatives, unbridled speculation in toxic asset classes and so on with no real connection to the real economy. That imposed a real systemic risk on the global economy.
Participation banking — as it is called in one of America’s closest allies, Turkey — is about asset-backed financing. Hence, it is a link to the real economy and the amount of money raised is proportionate to the underlying asset. It has been called ‘boring finance’ as it is about leasing, trading and investing. However, that is the vogue now. For example, at the peak of the US subprime crisis, Fortune 500 company GE raised money via an Islamic bond called sukuk.
There is a small but vocal anti-syariah movement in the US and it alleges a link between Islamic finance and terrorism. If allowed in the US, it is a slippery slope to undoing the Constitution.
Where is their evidence of a link? The UK, a close ally of the US in war against terror, has five Financial Services Authority-approved Islamic banks and has been involved in Islamic finance since the early 1980s. And it is still a secular democracy with a robust parliament.
This is about a ‘clash of misperceptions’, not civilisations. It is well known that the longest lines are at the US embassy to get a visa, be it tourist, education or work, and many people have left repressive societies to start new lives in America. They are not interested in bringing the Trojan horse of repressive policies to US shores.
Let’s take what I call the ‘podium test’, whereby we have a conference, under the patronage of the leader, in cosmopolitan Muslim countries with reasonable entry visa policies — say, Kuala Lumpur and Dubai — and home to a variety of conferences. Let’s invite these ‘dedicated’ people to present their evidence and links and let the stakeholders of participation finance rebut, redress and remove these allegations.
So what Muslim country has Islamised its economy and is it exportable to the US and elsewhere?
First, Islamic finance exists in various forms in 11 of the G20 countries, including the US, where a Jewish-owned community bank, Devon Bank, offers Islamic finance products.
Second, the US Treasury, under your predecessor George Bush, had a resident Islamic scholar educating the staff and the day after you were elected in November 2008, there was an Islamic Finance 101 programme at the Treasury in which my colleagues and I participated.

Malaysia, a multi-ethnic and multi-religious country, embarked on Islamic finance in 1983 and now about 20% of its banking is aligned to such principles. The methodical approach is both top-down and bottom-up, supported by successive prime ministers, central bank governors, Securities Commission and industry bodies. Hence, there is a robust regulatory, legal and tax infrastructure with certain needed [initial] subsidies.
However, Malaysia’s 2012 Islamic finance is not wholesale exportable to many countries that still lack the infrastructure. Thus, it will not happen overnight in the US or elsewhere, and if one tries to fast-track it to capture the surplus liquidity of the Gulf Cooperation Council countries, the law of unintended consequences will probably kick in, causing more challenges than providing financial solutions.
In other words, today, participation finance is really a domestic phenomenon, and to export it, five major considerations need to be addressed: syariah, tax, accounting, regulations and standardisation.
Does this mean special and separate rules, legislation and tax need to be written? No, the UK provides a good example of ‘refining’ legislation, like the removal of double stamp duty on Islamic mortgages.
So, Islamic finance seems to be about disinformation mediation [by one group] and inadequate information by your industry?

Yes, in both instances. The most valuable commodity in the world is not oil, gold or even the greenback, but information. Most credible jurisdictions have laws against, say, inside information.
The industry needs to establish a ‘professionally run and well-financed’ Islamic information industry body to dispel myths, warehouse information, undertake global marketing, provide crisis management and so on, and it would be ideal to house it in Washington, DC. This way, you and your successors have immediate access to what Islamic financing is all about.
Regards

Zulkifli Hasan
The Louvre Museum, Paris
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December 17, 2012
DR. ZULKIFLI HASAN
Islamic financial system shows inherent resistance to global crises
Islamic financial system shows inherent resistance to global crises
By Khurram BaigPublished: December 17, 2012 Available at:
http://tribune.com.pk/story/480449/islamic-financial-system-shows-inherent-resistance-to-global-crises/
Islamic finance is one of the fastest growing segments of the global financial industry. In 2008 the size of the global Islamic banking industry was estimated about $820 billion. Now it is closer to $1.35 trillion according to Global Islamic Finance Report (GIFR), and is expected to cross $1.6 trillion before the end of the current fiscal year.

The Islamic financial industry now comprises 430 Islamic banks and financial institutions and around 191 conventional banks having Islamic banking windows operating in more than 75 countries, according to the GIFR.

Pakistan is also a fast growing country with regards to Islamic finance and growth has been phenomenal. Starting from scratch in 2002, it is now about 8% of the local banking industry.
While Islamic banks play roles similar to conventional banks, fundamental differences exist. The central concept in Islamic banking and finance is justice, which is achieved mainly through the sharing of risk. Stakeholders are supposed to share profits and losses, and charging interest is prohibited.
There are also differences in terms of financial intermediation, the paper notes. While conventional intermediation is largely debt based, and allows for risk transfer, Islamic intermediation, by contrast, is asset based, and based on risk sharing. One key difference between conventional banks and Islamic banks is that the latter’s model does not allow investing in or financing the kind of instruments that have adversely affected their conventional competitors and triggered the global financial crisis. These include toxic assets, derivatives, and conventional financial institution securities.
Analysis done by the IMF suggests that Islamic banks fared differently, if not actually better than conventional banks during the global financial crisis. Factors related to the Islamic banking business model helped contain the adverse impact on their profitability. In particular, smaller investment portfolios, lower leverage, and adherence to Shariah principles—which precluded Islamic banks from financing or investing in the kind of instruments that have adversely affected their conventional competitors — helped contain the impact of the crisis when it hit in 2008.
The study used bank-level data covering 2007−10 for about 120 Islamic banks and conventional banks in eight countries — Bahrain, Jordan, Kuwait, Malaysia, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates. These countries host most of the world’s Islamic banks (more than 80% of the industry, excluding Iran) but also have large conventional banking sectors. The key variables used to assess the impact were the changes in profitability, bank lending, bank assets, and external bank ratings.
While the study showed that Islamic banks were able to better withstand the initial impact of the crisis, the following year (2009), weaknesses in risk management practices in some Islamic banks led to a larger decline in profitability compared to that seen in conventional banks. The weak 2009 performance in some countries was associated with sectoral and name concentration—that is, too great a degree of exposure to any one sector or borrower. In some cases, the problem was made worse by exemptions from concentration limits, highlighting the importance of having a neutral regulatory framework for both types of banks.
Despite the higher profitability of Islamic banks during the pre-global crisis period (2005–07), their average profitability for 2008–09 was similar to that of conventional banks, indicating better cumulative profitability and suggesting that higher pre-crisis profitability was not driven by a strategy of greater risk taking. The analysis also showed that large Islamic banks fared better than small ones, perhaps as a result of better diversification, economies of scale, and stronger reputation.

Islamic banks contributed to financial and economic stability during the crisis, given that their credit and asset growth was at least twice as high as that of conventional banks. The IMF paper attributes this growth to their higher solvency and to the fact that many Islamic banks lent a larger part of their portfolio to the consumer sector, which was less affected by the crisis than other sectors in the countries studied.
However the post-crisis years have also shown where the Islamic banking sector is relatively weak. It lacks as efficient a structure for liquidity management as seen in conventional banking. The IMF report also recommended that the sector needs a stronger supervisory and legal infrastructure, including bank resolution.
The paper also recommended that Islamic banks and supervisors work together to develop the needed human capital, saying expertise in Islamic finance has not kept pace with the industry’s growth.
Regards

Zulkifli Hasan
Top of Europe, Jungfraujoch, Switzerland
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October 2, 2015
DR. ZULKIFLI HASAN
Don’t let TPP jeopardise Malaysia’s future
Don’t let TPP jeopardise Malaysia’s future
By BY JOSEPH STIGLITZ AND ADAM HERSH
http://www.themalaysianinsider.com/malaysia/article/dont-let-tpp-jeopardise-malaysias-future
Prime Minister Datuk Seri Najib Razak is facing his last best chance to reverse the course of the Trans-Pacific Partnership, or TPP, a new international economic agreement that would lock in unequal trading relationships between advanced economy countries, such as the United States, Japan, Canada, and Australia, and developing economies like Malaysia.
TPP negotiators are now in what they hope is the final round to conclude this agreement. Political leaders will boast of negotiating for the best interests of their people and country.
But the reality is that special corporate interests – in the United States as elsewhere – have been given far too much influence on the negotiations. The agreement will go far beyond just cutting tariffs and quotas to mandate fundamental changes in each country’s legal, judicial, and regulatory institutions – a sop to the moneyed lobbies who have had more access to the process than concerned citizens or even lawmakers.
Given past experience with US-led trade agreements, and what we glean from documents leaked from the confidential negotiations, it is clear that Malaysia’s negotiators are giving away much to advanced country business interests.

It is less clear why they would, given the economic loss Malaysia is expected to get in return for such a deal.
Typically, one thinks of negotiation as one side giving something in order to get something else in return. But with the TPP, it is not clear what Malaysia would be getting.
Economists at the United Nations Conference on Trade and Development, UNCTAD, forecast that Malaysia would actually be a net trade loser as a result of joining TPP, with difference between the value Malaysia produces for export and the value it imports, the trade balance, declining by US$17 billion (RM75 billion) per year as a result of the agreement. In other words, the TPP would make Malaysia worse off by the most straightforward of economic measures.
These trade agreements are not free-trade agreements, but managed trade agreements, and typically managed for the interests of corporate interests.
And while the name Trans-Pacific Partnership suggests a “partnership”, it is a special kind of partnership, where one country, the US, calls most of the shots, giving into other “partners” the bare minimum necessary to secure compliance from their corporate and other special interests.
Not surprisingly, the big winners are corporate interests in the US, the big losers are ordinary citizens, both in the US and elsewhere.
But Malaysia stands out as one of the countries where as it now stands even the country’s economic interests stand to lose, with iron and steel, aluminium, mineral fuels, plastics, and rubber are among the sectors that will be hurt.
The shock to this industrial employment and investment will occur at the same time that Malaysian agricultural producers face greater import competition.
But the harm the TPP would do to Malaysian industry is just the tip of the iceberg. Other features make it an even more dramatically bad deal.
First, TPP would restrict member countries’ governments – including Malaysia’s – from passing regulations to protect public health, safety, and the environment, or any other aspect of the public good.
That’s because the TPP would create investor-state dispute settlement (ISDS) mechanisms that would allow foreigners to sue the government when they think a regulation will harm their profits. The arbitration would be private and binding, even if the outcome contradicts domestic laws.
And the company could be compensated for the loss of its expected profits, not just for its past investments, even if its profits are generated by selling products that kill people and if there is no discrimination involved in the regulation.
International corporate interests tout ISDS mechanisms as investment-protecting, but that is sheer nonsense: they are demanding similar provisions of European countries whose legal system provides every bit as good protection for property rights as the US.
In reality they are a backhanded way of undermining countries’ ability to protect the health and safety of their citizens, the environment, or even the economy. Cigarette companies, for instance, can sue a government for requiring particular packaging for tobacco products –simply by claiming it hurts their profits.
These are not hypothetical threats – similar investment agreements already exist and have led to such suits.
Malaysia’s TPP partner Peru is currently facing a US$800 million claim by US investor Renco over whether Renco can continue to operate a lead smelter – ranked among the world’s 10 most polluted sites – and whether it can avoid paying compensation for the victims and to remediate the site.
In another case, Australia is currently facing a suit over public health warning labels on cigarette packages intended to curb tobacco smoking, as is Uruguay (which is not a TPP partner).
Canada, under threat of suit, backed down from similar proposed regulations. And Mexico has been forced to pay US$15 million after arbitrators found error with a state government decision shut down an unpermitted toxic waste dump found to be leaking into the groundwater.
Existing ISDS mechanisms are bad enough. Their radical expansion under TPP would be disastrous.
Second, the TPP would effectively outlaw countries’ efforts to protect themselves from international financial speculators, who inject money into local economies when they’re hot and take money out as soon as they cool.
Such unchecked short-term capital flows cause instability and promote crises, as Malaysia knows full well from the 1997-98 Asian financial crisis. Malaysia used capital controls to protect its people from the worst effects of that crisis.
The result was a shorter and shallower downturn than elsewhere, with a smaller legacy of debt burdening future growth.
Mainstream economists now widely recognise that capital controls are an essential tool for financial regulation – even the International Monetary Fund, which once campaigned against them, has finally admitted their importance.
Since the crisis, Malaysia, has discarded its capital controls, but would be well advised to reinstate them were it to face another episode of financial turbulence like the last.
The TPP would effectively prevent it from even having the choice of reinstating them in the future – throwing it into the hands of the IMF, with the consequence surrender of its economic sovereignty, or forcing it to face even worse choices.
Malaysians need to reflect: what would have happened back then if there had been an agreement like TPP in place? Most likely, Malaysia would still be suffering the economic and political consequences.
A third way TPP locks in the unequal advantages of advanced economy countries is by raising intellectual property (IP) protection in ways that raise profits for intellectual property owners at the expense of everyone else.
The impact of more stringent IP can be seen most clearly when it comes to life-saving medicines. Driven by “Big Pharma” lobbyists, American negotiators are pressing TPP countries to accept protections that will boost their profits, not from innovating new medicines but by keeping potential competitors out of the market and charging consumers higher prices.
It accomplishes this through a variety of seemingly arcane rule changes – buried in jargon about “patent linkage” and “biologics” – which collectively would allow pharmaceutical companies to extend their monopolies for many more years than they currently can.
Mylan, a leading generic medicine manufacturer, has warned that TPP may in effect shut their business out of participating countries – meaning not only will Malaysians pay more for medicines, but that some medicines may cease to be readily available in Malaysia.
Rightly done, greater trade and investment integration with the world promises a lot for Malaysia, but the TPP is not the way to accomplish it.
There is no evidence that such kinds of provisions are contained in the TPP. What they will do is ensure that more of the wages of hardworking Malaysians end up in the pockets of global corporations.
If Najib truly believes in putting the Malaysian people first, he will instruct his negotiators in Atlanta to ensure (a) that Malaysia at least gains economically from the trade agreement; (b) that its citizens continue to have access to generic medicines at affordable prices; and (c) that the TPP leaves Malaysia’s economic future its own hands, not those of multinational investors.
The bottom line must be that TPP make space for Malaysia’s development needs. His negotiators have a hard task ahead, for as it now stands, TPP is designed to set the economy back and to take away some of the critical tools that it needs to promote the health of its people and its economy. – October 2, 2015.
* Joseph Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University and chief economist at the Roosevelt Institute. Adam Hersh is senior economist at the Roosevelt Institute and visiting scholar at Columbia University’s Initiative for Policy Dialogue.
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BLOG OF KNOWLEDGE (Shari'ah, Law, Islamic Finance and Muslim News)
Shari'ah, Law, Islamic Finance and Muslim News
March 30, 2010
DR. ZULKIFLI HASAN
The Current Economic Crisis – Is Islamic Finance a Solution?
The Current Economic Crisis – Is Islamic Finance a Solution?
By Parvez Ahmed Available at:
http://www.huffingtonpost.com/parvez-ahmed/the-current-economic-cris_b_516965.html
Throughout the current economic and financial crisis one contrarian statistic has stood out. Financial assets offered by the Islamic Financial Services Industry (IFSI) and generally classified as “Shariah-compliant,” were less affected by the crisis. Economist Loretta Napoleoni during a lecture at the University of New Mexico proclaimed, “Islamic finance … [a] system [that] could help us to get out of the current crisis.” Writing in the influential Turkish daily Today’s Zaman, columnist Ibrahim Ozturk declared, “Islamic finance has entered a bright new stage of development, emerging after the global financial crisis as a more equitable and efficient alternative to the Western approach.” The widely read Arabic daily Asharq Al Awsat opined, “Islamic banks are untouched by the current crisis due to the nature of Islamic banking especially that it does not deal in debt trading and distances itself from market speculation that takes place in European and American banks.” How do such claims stack up against reality? Is Islamic finance different enough from conventional finance to avoid its pitfalls?
The IFSI, which has marketed itself as being an alternative to the conventional financial system, has come a long way from its rather modest and relatively recent beginnings. The IFSI was recently estimated by Moody’s to be worth $700 billion and projected by the Islamic Development Bank to be $2.8 trillion by 2015. By 2015, majority of the IFSI will be geographically centered in the Gulf Cooperation Council (GCC) region while the South Asian region will provide about 15 to 25 percent of the total services. The IFSI encompasses almost all of the institutional and architectural features of the conventional finance industry. However, it should be noted that the size of IFSI relative to the Conventional Finance Industry (CFI) is very small (about 2 percent). In other words the IFSI has not been sufficiently stress tested to proclaim its efficacy when applied to a broader set of economic situations.
One distinguishing feature of IFSI has been its insistence that in complying with Shariah (the jurisprudence of Islam) it considers dealing with interest as totally unacceptable. The avoidance of interest reflects verses in the Holy Quran (3:130; 2:175; 4:161) which forbid riba, most often and commonly translated as interest rates. The IFSI contends that it has replaced interest rates with rate of profit on equity, profit sharing finance and markup transactions.
In practice, the contracts of the IFSI fall short of the “interest-free” claims it makes. IFSI contracts do allow for presence of interest rates, mostly indirectly but sometimes directly, albeit in small measures. Islamic mutual funds for example allow investment in stocks of companies that use interest based debt (current practices allow 33 percent debt-ratios). Sukuks, described as Islamic bonds, guarantee a fixed rate of return, which to most financial observers look like interest. In murabaha, Islamic jurists opine that home buyer (mortgagor) is involved in credit sales and not a loan contract (as in traditional mortgages). Yet murabaha loan documents use the conventional terms like “note,” “loan,” and “interest” to describe its features much like any home mortgage contract. Moreover, the mark-up used in murabaha is usually benchmarked to a conventional interest rate.
This has given rise to what Rice University’s Mahmoud El-Gamal pejoratively calls Shariah-arbitrage, defined as the practice of extracting premium rents from participants in a captive-market for products labeled and perceived to be Shariah compliant. The paradox is not merely of academic interest. Among the producers and users of Islamic financial products there is pervasive skepticism. A unique insight about this perception is gathered from a recent research on the attitude of customers and bankers using IFSI. A significant majority (6 in 10) believe that the development of Islamic banking has more to do with being faithful to Islam than any other criterion (although the proponents of Islamic finance often cite the superiority of IFSI is due to its purported commitment to social justice and welfare). Nearly 7 in 10 believe that the “rate of profit” or “markup profit” charged by Islamic banks do not differ much from interest based transactions offered by the CFI. Potential patrons (7 in 10) are unwilling to transact with the IFSI because they do not find much difference between the IFSI and the CFI.
In discussing how bankruptcy courts are likely to rule on foreclosures under IFSI contracts like ijarah (lease-based transactions), murabaha (cost plus markup sale) and musharaka (partnership contract), legal experts observe, “We would not anticipate that this type of foreclosure would differ materially from that of a conventional mortgage foreclosure. … The ‘borrower’ holds all the benefits and risks of ownership in a Musharaka transaction as well.” As such in bankruptcy and foreclosure proceedings, IFSI providers have the same legal protections as those afforded to CFI institutions in debt based transactions.
The current state of IFSI is prohibition driven primarily centered on taking existing CFI contracts and pronouncing the Islamicity or lack thereof for those contracts. The IFSI then proceeds to institute contractual changes that alter the structure of the contract to make them contractually Shariah-compliant without addressing any of their possibly inherent fault lines. This process is enabled by Shariah-boards, which pronounce the Islamicity of such contracts. The Shariah-boards are beset with agency problems (conflict of interest) as they are not subjected to disclosure rules equivalent in scale and scope to those for corporate boards, which many argue are in urgent need for more reform and transparency themselves! According to a recent study the top 5 Shariah-scholars makeup 15 percent of the entire universe of Shariah board positions. Only 180 scholars are involved in nearly 1000 Shariah board positions. This stifles innovations and fosters unhealthy imitations.
One thing is clear, if Islamic Finance is to remain restricted to Muslims then not only will Islamic Finance not save the day but it will also pervert the mission of Prophet Muhammad, described in the Quran (21:07) as a mercy to all humanity (creation, to be precise). The emphasis on the prohibition based aspects of Shariah have led to missed opportunities to promote the maqasid or objectives of Shariah whose aims are not prohibition-driven but rather, inclusive and egalitarian. The maqasid or objectives of Shariah, is to protect and preserve life, mind, faith, property and offspring, which according to the noted Andalusian Islamic scholar Abu Ishaq al-Shatibi is a set of objectives that are common to all religions and must be the transcendent framework to evaluate all Islamic law, social obligations and contracts (financial or otherwise). The attainment of these goals require the development of a positive and inclusive vision, which can truly address the many shortcomings that plagues the world of finance — from bad regulation, to un-transparent contracts, to plain old greed.
Islamic finance has a role to play in the world of finance. But to do so, the IFSI will have to de-emphasize its innovations based on Shariah-arbitrage and engage in developing a more holistic vision that will resonate with all people of conscience, not just Muslims. Islamic mutual funds, for instance, will have to beyond the negative screens it primarily imposes in selecting stocks to developing positive screens that steer investments towards those opportunities that can lead to sustainable development strategies. Islamic finance must also promote the highest ethical standards and the most transparent disclosure rules, enabling a healthy dose of sunshine into the complex world of financial engineering (responsible for the now infamous credit default swaps that produced the toxic home loans). Islamic banks must also provide a positive vision of efficient and effective distribution of zakat wealth. Islamic financial institutions must develop innovative programs to produce equity based partnerships with small and medium enterprises, which are often the forgotten sector in the world of high finance. The Islamic financial service industry can truly differentiate itself by adopting a more socially conscious role that will enable them to not only fulfill the objectives of Shariah but also inject an alternative vision into the world of global finance allowing a necessary paradigm shift if only to avoid another global economic crisis.
Prof. Parvez Ahmed is a Fulbright Scholar and Associate Professor of Finance at the University of North Florida. With Seth Anderson he co-authored, “Mutual Funds: Fifty Years of Research Findings.” He is also a frequent commentator on Islam and the American Muslim experience. His blog can be read at:
http://drparvezahmed.blogspot.com/
“The easiest period in a crisis situation is actually the battle itself. The most difficult is the period of indecision-whether to fight or run away. And the most dangerous period is the aftermath. It is then, with all his resources spent and his guard down, that an individual must watch out for dulled reactions and faulty judgment.” Richard M. Nixon
Regards

ZULKIFLI HASAN

DURHAM, UK
The Bowes Museum, Durham.
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BLOG OF KNOWLEDGE (Shari'ah, Law, Islamic Finance and Muslim News)
Shari'ah, Law, Islamic Finance and Muslim News
March 21, 2010
DR. ZULKIFLI HASAN
Amanie Business Solutions plans expansion into Australia and Europe
Amanie plans expansion into Australia, Europe
By Habhajan Singh Available at:
http://www.themalaysianreserve.com/SubPage.asp?pageid=3&eventid=3858
A local Islamic finance consulting company anchored by prominent Shariah scholar Dr Mohd Daud Bakar is looking to expand its presence in Australia and Europe to tap the growing business opportunities in those regions, attempting to tap into changes in regulation to accommodate Islamic finance and also the growing need to structure Shariah-compliant products.
Amanie Business Solutions is looking at opening up offices or partnerships in Australia, while the choice for Europe is between London and Luxembourg.
“There are concrete proposals to the [Australian] Government to amend some laws to accommodate Islamic finance. These are some of the areas of interest,” Dr Daud Bakar told The Malaysian Reserve.

He was referring to the Australia financial centre report presented to the Australian Parliament and made public in mid-January which had recommended on withholding tax on offshore borrowings and on Islamic finance, to improve its ‘access to offshore pools of savings at competitive rates, so as to provide more diversified and cheaper funding for Australia’s investment needs’.

Commonly known as the Johnson Report, it was commissioned by the Government in September 2008 as part of its commitment to secure Australia’s future as a leading financial service centre.
The move would make Amanie a Shariah consultancy with one of the widest global presence. Most Shariah consultants tend to concentrate in either London or Dubai, while Malaysia is populated more by individual Shariah scholars who work mostly with Islamic banks and takaful operators who require their services.

The developments coming out of Australia would have been the impetus for legal firm Zaid Ibrahim’s to open offices in Sydney and Melbourne in the December 2009.

One of the largest local legal firms in Malaysia, Zaid Ibrahim had stated that its primary focus would be to promote Shariah-compliant business. Zaid Ibrahim, with offices in Singapore, Thailand, Indonesia, Vietnam and Dubai, had set up in 2008 an Islamic finance advisory firm called ZI Shariah Advisory Sdn Bhd.
Dr Daud Bakar, who also chairs the influential Bank Negara Malaysia’s Shariah Advisory Council (SAC), is no stranger to the Islamic finance scene in Australia. Amanie has advised a number of deals originating from there, including LM Investment Management Ltd’s (LM) Islamic property fund and Crescent Investments Australasia Pty Ltd’s equity fund, both being the first of their kind in that part of the world.

“LM came to see us in Dubai. In fact, they were our first clients in Dubai,” he said. The Dubai-based vehicle, Amanie Islamic Finance Consultancy and Education LLC chaired by Dr Mohamed Ali Elgari, signed off the fatwa for Crescent’s fund. The other signatories on that document, displayed on the company’s website, are Dr Daud Bakar, Dr Muhamad Amin Ali Al-Qattan and Dr Osama Al-Dereai.

LM, which described itself as privately owned specialist Australian income funds manager, floated the LM Australian Alif Fund. It said that it is a ‘Shariah compliant fund, with fatwa confirming the Shariah compliant status’ of the funds and its investments, suitable for investors seeking ‘Australian assets delivering profit in a Shariah compliant manner, and is available for investment in a range of major international currencies’.
As for the European move, industry observer note that European cities like London, Dublin and Luxembourg are vying to be international hubs for Islamic finance.

Luxembourg, for example, is key domicile of funds in Europe and have amended a number of taxation laws to accommodate Islamic finance funds. “Here, they would be interested in originating and listing of funds,” said one observer.

Dr Daud Bakar said that Amanie sees ‘potential business expansion’ in Luxembourg. “We have some experience endorsing few Islamic funds licensed from Luxembourg using UCIT 3 and SICAV structure,” he said.

UCITS3 is an European Union initiative. Funds go through a stringent regulatory process which then allows it to be floated in the EU jurisdictions without much further local clearance. SICAVs, a vehicle much like an umbrella for funds, are increasingly being cross-border marketed in the EU under the UCITS directive.
Asked what prompted the move to expand further, Dr Daud Bakar said: “Looking at global financial movements, we’ve seen some strong interest in some jurisdictions like South Korea, Australia, Luxembourg, Kazakhstan. We like Kazakhstan, where we have partners who take care of our interest.

“We are a global Shariah firm, originating from Malaysia. We then expanded to DIFC [Dubai International Financial Centre] in 2008. Now we are seriously considering to position Amanie in other new potential markets and jurisdictions. Islamic finance is a global industry. We need to be close to out clients, be in the same time zone. We’re proud to fly the Malaysian flag in other countries.”
“If anybody thinks that kings, nobles, priests are good conservators of the public happiness, send him (to Europe)” Thomas Jefferson
Best Regards

ZULKIFLI HASAN

DURHAM, UK
With Dr. Mohamad Daud Bakar, at his office, Amanie Islamic Finance Learning Centre, No.44, Level 41, Emirates Towers, Sheikh Zayed Road, P.O. Box, 31303, Dubai, UAE.
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One thought on “Amanie Business Solutions plans expansion into Australia and Europe”
wan mohd rushdi says:
July 9, 2010 at 3:21 am

i want to know, is amanie business solution provide available internship for student to join practicum for intake december 2010? currently,i`m student bachelor islamic finance and banking in UUM in last semester. thank you.

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