Islamic Finance: a safer bet?

The global economic crisis has handed the proponents of Islamic finance a “golden opportunity” to show that it is a better alternative to Western-style capitalism. That, at least, was what Malaysian Deputy Prime Minister Najib Razak told participants at an Islamic economic conference in Kuala Lumpur last month.

Islamic finance, argued Datuk Seri Najib, could become a model for change because it prohibits many of the risky activities that triggered the current crisis. He may have a point.(link)

Maldivian government has been in talks with the biggest Islamic Bank in Bahrain to set up an islamic bank in Maldives.

What happened to this project?

If this project goes through, Maldivians can obtain finance to build their homes without the fear of being thrown out of their homes when the unpaid compounded interest runs higher than the principal loan taken. We need the Nasheed government and sharia scholars specialized in islamic banking to make islamic banking a reality in Maldives.

Capitalism is taking a battering in the West because of the greed of top level executives who have caused some of the biggest banks in America and Britain to go into insolvency, forcing the governments to step in and bail them out.

At a time when many of the industrialised countries are going through the worst recession since the Great Depression, it is worth looking at new perspectives for financing development of small countries like Maldives. Layoffs and unemployment are devastating for small communities like us with limited opportunity for alternative employment.