|Jim Kouri||December 11th 2012|
Financial instruments -- cash, bearer bonds, etc. -- in line with Islamic law or Shariah are predicted to hit $1.8 trillion (U.S.) globally by 2013, up 38.5 percent year on year, according to American corporate auditors Ernst & Young's World Islamic Banking Competitiveness Report 2013 released Monday. But some wonder if this growth will help radical Islamist groups.
According to the report, the top 20 Islamic banks have registered an annual growth of 16 percent over the last 3 years.
The Saudi Kingdom emerged as the largest market for Islamic assets, with an estimated $207 billion in 2011, was ranked first by the report. Saudi Arabia is followed by Malaysia, with $106 billion that are "Shariah-compliant assets," while the United Arab Emirates ranked third with total assets of $75 billion (U. S.).
The 20 largest Islamic banks hold about 57 percent of the total international Islamic assets and are concentrated in the seven core markets for Islamic banking which include Saudi Arabia, Kuwait, United Arab Emirates, Bahrain, Qatar, Malaysia and Turkey, said the Global Islamic Banking Center of Excellence at global consultancy and corporate audit firm Ernst & Young.
With their nations no longer under the thumb of corrupt dictators, Egypt and Libya are considered promising Islamic finance markets, the report states. In fact, several banks in Egypt are expected to launch Shariah-compliant banking practices, according to Ernst & Young.
Islam's Shariah financial regulations do not allow banks to operate with interest, but instead with profit and loss-sharing models. Shariah dictates that clients and banks become partners, rather than capital takers and lenders.
In addition, shares of companies conducting "un-Islamic businesses," such as weapons and military equipment, pork-meat production, media that's viewed as being pornographic, and selling alcoholic beverages. are banned from any Islamic fund or financial index.
One of the fears in Western nations is that Shariah banks will allow money laundering and other activities by groups such as al-Qaeda, Hamas, Hezbollah and other terrorist organizations. Research found that Britain's Islamic banking sector is the biggest in Europe, and larger than many Muslim nations, including Pakistan.
Britain's enthusiastic support for "Shariah banking" raised concerns in Washington that the City of London could become a centre of terrorist funding, leaked documents show.
Jim Kouri writes for The Examiner, from where this article was adapted.