Shortage of Shari’a Scholars Threatens Emerging Banking, Oh My
Marion DS Dreyfus
February 5, 2008
According to research reported by MEMRI, the banking industry looking to borrow or initiate financial investments may be hampered for “at least a generation’’ because there simply aren’t enough high-ticket shariah-code (also spelled, for good measure, shari’a) scholars to go around. Since the raft of new financial instruments and deals going forward under the “shariah-compliant financing” banner cannot be completed without the requisite period of study by such scholars, who go for from $50,000 to about double that, the deals will be left in shariah-code limbo until they get the blessing of such mandated clerics.
This might be cause for a second look by the financing institutions and banks contemplating joint arrangements under this speculative and uncertain alternative to traditional interest-bearing ETFs, (Exchange-Traded Funds) bonds and similar long-term investments.
Estimates now are that there are some 50 to 60 gold-standard clerics available right now. Best guess for the number needed in the MidEast? “Ten times that,” according to market maven Sheikh Nidham Yaqouby, one of the world’s most respected of these scholars.
How long does it take to bone up on the shariah code needed to pass muster for this somewhat trendy yet portentous route to “cash infusions” and investing? Best guess is around 5 years, minimum. Maybe longer. Could be a career pathway no one thought of 50 years ago. (Because it didn’t exist until some Muslim Brotherhood types in Egypt virtually invented the entire ‘industry’ out of whole cloth. The customs and practices do not, in fact, hail from the koran.)
Maybe it’s time to take a hard look at whether Westerners should in fact be under the thumb of somewhat troglodyte ‘scholars’ who must ultimately mumble OK before a deal can be consummated.
And maybe the time-lag will give prospective ‘investors’ a sizable lead-time in which to vet and perform due diligence on this critical financial arrangement: Check out the end-term liability, potential lack of transparency, conflicts of interest, snafus with American jurisprudence, inadequate oversight, even a scenario of possible indictments for seditious acts. Those are none of them so far-fetched.
As they say in the media, you could look it up.
Marion DS Dreyfus
20©08
Who’s never won? Biggest Grammy Award surprises of all time on AOL Music.
.AOLWebSuite .AOLPicturesFullSizeLink { height: 1px; width: 1px; overflow: hidden; }
