The promoters of Shariah Finance have now coined a new term to hide their agenda and describe their movement: “Responsible” investing.
To do so, they erroneously claim that “Islamic” financial products have provided insulation from the financial crisis and global recession. This, of course, is rubbish, as we have reported on these pages many times. Islamic indices have fallen right along with conventional indices. Islamic banks, particularly in Qatar and the UAE, have had rough earnings reports. And the default rate in sukuk, or Islamic bonds, is substantially higher than that on conventional bonds.
We’d also like to know what is so responsible about the largest Shariah-Compliant financial institutions, the big Iranian banks, which dominate Shariah Finance? What is so responsible about facilitating the financing of terrorism and proliferation of nuclear weapons and ballistic missiles? What do all the Shariah provisions have to say about that?
We know what the international community has to say about it…those big Iranian banks are under US and EU sanctions for their disgraceful line of business. But we note with a certain amount of disdain that banks throughout the GCC continue to conduct business with terrorist banks like Bank Melli of Iran as if nothing were wrong.
What is so “responsible” about that?