A pioneering initiative to introduce Islamic economics as an academic subject was taken at Osmania University in the former princely state of Hyderabad nearly a century ago. In recent years, significant contributions to the subject have been made by Umar Chapra, Nejatullah Siddiqi, Muhammad Baqir al-Sadr and Anas Zarqa, among others.
In the 1970s Islamic economics was introduced as an academic subject at a number of universities in the Muslim world. Several professional journals devoted to Islamic economics have been launched in the past three decades. Hundreds of research projects in the subject have been carried out in universities around the world, including in Europe, USA and Canada. At least 200 doctoral dissertations have been submitted and approved at universities. The first international conference on Islamic economics was held at King Abdul Aziz University in Jeddah in 1976. Since then more than a thousand of conferences, seminars and symposia have been organised in Pakistan, Malaysia, Turkey, Indonesia, Saudi Arabia and other countries, many of them under the auspices of the International Association of Islamic Economics.
Islamic Finance in a Globalising World
Globalization is a metaphor for the increasing interconnectedness of the world. It refers to a broad spectrum of processes in the contemporary world, including large-scale international migrations, the rapid growth and impact of modern information and communication technologies, the unprecedented flow and movement of capital, technology, goods and services, peoples, ideas, lifestyles and cultural symbols, the global intertwining of communication, production and consumption, the rise of supranational frames of power and international relations, the increasing porousness and fluidity of national borders, and transnational diasporas. Under the impact of globalization, all countries are now increasingly interconnected through trade, information and communication technologies and migration, and social, economic and political processes are becoming increasingly global in scope. Globalization is a complex, multi-layered process, involving economic, technological, social, political and cultural dimensions, which are often interlinked.
Islamic finance, a prominent part of Islamic economics, which is essentially premised on Islamic principles governing trade, banking, investment and all other types of financial transactions, is steadily gathering momentum across large parts of the world, including Europe, North America and Australasia. Islamic financial institutions eschew charging interest and investing in industries that involve prohibited items such as alcohol, gambling and pornography. They operate on the Islamic principle that reward and risk should be shared among all participants in a business or financial transaction. Islamic finance embraces a wide range of institutions, products and services, including Islamic banks, Islamic investment companies and banks, mutual funds, bonds and stocks, insurance, equities, and Islamic e-commerce.
Islamic finance is increasingly becoming a mainstream component of the global banking system. Currently, more than 500 Islamic financial institutions exist in over 90 countries across the world, with an asset holding size of around $ 2 trillion. About 80 per cent of the Islamic financial assets worldwide are managed by Islamic banks or the Islamic units of conventional banks. Ernst and Young, an international consulting and accounting firm, estimates that Islamic financial assets grew at an annual rate of 17.6 per cent between 2009 and 2013 and will grow by an average of 19.7 per cent a year in the coming years. Iran holds the world’s largest level of Islamic financial assets valued at over $518 billion and accounts for at least 37 per cent of Islamic financial assets worldwide. Seven out of ten Islamic banks in the world are Iranian. Saudi Arabia’s share in global Islamic financial assets is 18.5 per cent, followed by Malaysia with 10 per cent and UAE with 7.36 per cent. Malaysia and the Gulf Cooperation Council states (Kuwait, Bahrain, Qatar, Oman, United Arab Emirates and Saudi Arabia) form the hub of the global Islamic finance network. Al-Rajhi Bank, Saudi Arabia’s largest Islamic financial institution, has total assets over worth $ 80 billion. The total assets of Kuwait Finance House, one of the world’s largest Islamic banks in the world, are KWD 11.291 billion.
Islamic bonds (sukuk) are among the highest profile products of Islamic financial institutions and form about 15 per cent of the total assets of Islamic investment funds. According to the 2014 Global Islamic Financial Report, financial assets worth about $1.813 trillion are being managed in a Shariah-compliant manner. The UAE has been the world’s foremost issuer of sukuk over the past ten years, contributing over 36 per cent of global sale value, followed by Malaysia at 32 per cent. In 2014 Britain became the first non-Muslim country to issue Islamic bonds. It raised $339 million from the issuance of sukuk.
In response to the growing worldwide demand among Muslims for Islamic financial products, a number of major international banks, including Citibank, HSBC, ABN AMRO, BNP Paribas, Deutsche Bank, Barclays, Lloyds TSB, Credit Suisse and Goldman Sachs, have begun to offer Islamic financial products. Deutsche Bank, Barclays Capital and BNP Paribas are among the world’s top five issuers of Islamic bonds. All major banks in Britain now have Islamic divisions, and there are also five Islamic banks in the country. Investment bankers in the West are competing to create a range of new Islamic capital market products on a large scale. In 2003 HSBC Bank launched an “Islamic mortgage” scheme in Britain to provide loans for house purchase. A Texas-based oil and gas firm, East Cameron Partners, issued the first American sukuk (asset-based bonds) in 2006. In April 2007 the London Stock Exchange listed its maiden Islamic hedge funds.
In 2007 the International Capital Market Association and the International Monetary Fund agreed to develop standard contracts and common best practice for secondary trading of Islamic hedge funds and other Islamic instruments. A number of global banks, including Deutsche Bank, Barclays Capital and BNP Paribas, have issued Islamic hedge funds. The increasing global salience of Islamic finance may be gauged from the decision of the Harvard Law School to sponsor the Islamic Finance Project. The Eighth Harvard University Forum on Islamic Finance was held on April 18-20, 2008 in Cambridge, Massachusetts. The Cass Business School in Britain offers a degree in Islamic finance. In 2008 Lancaster University Business School joined the Cass Business School and the School of Oriental and African Studies’ Centre for Financial and Management Studies in offering an optional module in Islamic finance as part of its postgraduate training. Since the global financial meltdown in 2008, Islamic financial products have also attracted the interest of conservative non-Muslim investors. Malaysia, a Muslim-dominated country, has more than 25 per cent non-Muslim account holders in Islamic banks.
In recent years, financial transactions in some of the massive global purchases have been mediated through Islamic bonds. Islamic bonds worth about US$3.5 billion went into the financing of the purchase of the British Peninsular and Steam Navigation by the Dubai Port Authority in 2006. Islamic financial investment played a major role in the Ford Motor Company’s US$ 848 million sale of Aston-Martin to the Kuwait-based Islamic bank, Investment Dar in 2008. Caribou Coffee, the second-largest specialty coffee chain in the US after Starbucks, is owned by a Bahrain-based Islamic equity firm.
Islamic finance, a prominent part of Islamic economics, which is essentially premised on Islamic principles governing trade, banking, investment and all other types of financial transactions, is steadily gathering momentum across large parts of the world, including Europe, North America and Australasia. Islamic financial institutions eschew charging interest and investing in industries that involve prohibited items such as alcohol, gambling and pornography. They operate on the Islamic principle that reward and risk should be shared among all participants in a business or financial transaction. Islamic finance embraces a wide range of institutions, products and services, including Islamic banks, Islamic investment companies and banks, mutual funds, bonds and stocks, insurance, equities, and Islamic e-commerce.
Islamic finance is increasingly becoming a mainstream component of the global banking system. Currently, more than 500 Islamic financial institutions exist in over 90 countries across the world, with an asset holding size of around $ 2 trillion. About 80 per cent of the Islamic financial assets worldwide are managed by Islamic banks or the Islamic units of conventional banks. Ernst and Young, an international consulting and accounting firm, estimates that Islamic financial assets grew at an annual rate of 17.6 per cent between 2009 and 2013 and will grow by an average of 19.7 per cent a year in the coming years. Iran holds the world’s largest level of Islamic financial assets valued at over $518 billion and accounts for at least 37 per cent of Islamic financial assets worldwide. Seven out of ten Islamic banks in the world are Iranian. Saudi Arabia’s share in global Islamic financial assets is 18.5 per cent, followed by Malaysia with 10 per cent and UAE with 7.36 per cent. Malaysia and the Gulf Cooperation Council states (Kuwait, Bahrain, Qatar, Oman, United Arab Emirates and Saudi Arabia) form the hub of the global Islamic finance network. Al-Rajhi Bank, Saudi Arabia’s largest Islamic financial institution, has total assets over worth $ 80 billion. The total assets of Kuwait Finance House, one of the world’s largest Islamic banks in the world, are KWD 11.291 billion.
Islamic bonds (sukuk) are among the highest profile products of Islamic financial institutions and form about 15 per cent of the total assets of Islamic investment funds. According to the 2014 Global Islamic Financial Report, financial assets worth about $1.813 trillion are being managed in a Shariah-compliant manner. The UAE has been the world’s foremost issuer of sukuk over the past ten years, contributing over 36 per cent of global sale value, followed by Malaysia at 32 per cent. In 2014 Britain became the first non-Muslim country to issue Islamic bonds. It raised $339 million from the issuance of sukuk.
In response to the growing worldwide demand among Muslims for Islamic financial products, a number of major international banks, including Citibank, HSBC, ABN AMRO, BNP Paribas, Deutsche Bank, Barclays, Lloyds TSB, Credit Suisse and Goldman Sachs, have begun to offer Islamic financial products. Deutsche Bank, Barclays Capital and BNP Paribas are among the world’s top five issuers of Islamic bonds. All major banks in Britain now have Islamic divisions, and there are also five Islamic banks in the country. Investment bankers in the West are competing to create a range of new Islamic capital market products on a large scale. In 2003 HSBC Bank launched an “Islamic mortgage” scheme in Britain to provide loans for house purchase. A Texas-based oil and gas firm, East Cameron Partners, issued the first American sukuk (asset-based bonds) in 2006. In April 2007, the London Stock Exchange listed its maiden Islamic hedge funds.
In 2007 the International Capital Market Association and the International Monetary Fund agreed to develop standard contracts and common best practice for secondary trading of Islamic hedge funds and other Islamic instruments. A number of global banks, including Deutsche Bank, Barclays Capital and BNP Paribas, have issued Islamic hedge funds. The increasing global salience of Islamic finance may be gauged from the decision of the Harvard Law School to sponsor the Islamic Finance Project. The Eighth Harvard University Forum on Islamic Finance was held on April 18-20, 2008 in Cambridge, Massachusetts. The Cass Business School in Britain offers a degree in Islamic finance. In 2008 Lancaster University Business School joined the Cass Business School and the School of Oriental and African Studies’ Centre for Financial and Management Studies in offering an optional module in Islamic finance as part of its postgraduate training. Since the global financial meltdown in 2008, Islamic financial products have also attracted the interest of conservative non-Muslim investors. Malaysia, a Muslim-dominated country, has more than 25 per cent non-Muslim account holders in Islamic banks.
In recent years, financial transactions in some of the massive global purchases have been mediated through Islamic bonds. Islamic bonds worth about US$3.5 billion went into the financing of the purchase of the British Peninsular and Steam Navigation by the Dubai Port Authority in 2006. Islamic financial investment played a major role in the Ford Motor Company’s US$ 848 million sale of Aston-Martin to the Kuwait-based Islamic bank, Investment Dar in 2008. Caribou Coffee, the second-largest specialty coffee chain in the US after Starbucks, is owned by a Bahrain-based Islamic equity firm.
Databank for Islamic Economics and Finance
E-Marefa, established by Knowledge World Company for Digital Content in Jordan in 2004, is basically concerned with the production and circulation of Arabic digital knowledge in the context of the growing worldwide salience of digital information. E-Marefa Database, founded by Professor Al-Khazendar, is a comprehensive, integrated database on issues and themes related to the contemporary Arabic and Muslim world. It encompasses a wide range of disciplines and specialisations and includes the full text and metadata of some 400,000 research papers published in professional journals or presented at international conferences, 1,900 academic journals, 22,000 theses and dissertations, 11,000 book reviews, thousands of books (and e-books) and statistical reports from 300 entities and bodies from 19 Arab countries.
The specialised areas under e-Marefa Databank include economics, finance and business administrations, social sciences, humanities, Islamic studies and Arabic literature, international and Arab affairs, education, media studies, legal and Islamic fiqh resources, engineering sciences and information technology, pharmacy, health and medical sciences, natural and life sciences, peace, conflict and violence, and youth studies.
E-Marefa Database launched the Databank for Islamic Economics and Finance at the 23rd Annual World Conference on Islamic Banking held in Manama, the capital of Bahrain on 5-7 December 2016. The Databank for Islamic Economics and Finance, an integrated and interactive global system for data analysis and financial comparisons related to Islamic economics and Islamic finance, is aimed at facilitating access to wide-ranging information related to Islamic economics and Islamic finance for the benefit of policy-makers and planners, decision-makers, business corporations, entrepreneurs, researchers and academicians.
The Databank represents over 35 recognised experts in Islamic economics and financial institutions from 40 countries from around the world and includes tens of thousands of documents. It offers detailed information on 3,500 decision-makers, experts and specialists in Islamic economics, 4,400 Shariah fatwas, full text of 11,000 information sources, 6,000 statistical, economic and financial resources and profiles of 300 Islamic financial institutions.
The Databank for Islamic Economics and Finance promises to be an extremely valuable resource for those interested and involved in Islamic economics and finance.
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