Can Islamic finance help? T
he meltdown of the global fi nancial system has raised pro found questions of its fundamental structural reform. The downward spiral in the US and Western Europe is described by financial experts as deleveraging: the forced reduction of accumulated debt by households and financial institutions. As more assets get dumped into the market, prices are driven down further, which in turn necessitates more deleveraging. This vicious cycle has gained such momentum that even the massive bailout packages may not be sufficient to stop it. The bursting of the debt-fuelled property bubble in the US, together with the crippling losses suffered by banks, has set in motion a chain-reaction that, in a worst-case scenario, (according to Prof Niall Ferguson of Harvard) could lead to a 21st century version of the Great Depression. The immediate cause of the current financial crisis appears to be the excessive and imprudent lending by banks. This in turn is attributed to the unbridled power of private bankers to create money out of nothing, and then to loan this bank-created money on interest (described as fractional
reserve banking). In this present with transactions in the real economy. monetary framework, money is According to Prof John Gray of Oxtraded as a commodity, instead of per- ford University, derivatives have creforming its true funcated a “virtual finantion of operating as a The Spirit Of Islam cial economy” which medium of exchange. “has a terrible potenThis system favours tial for disrupting the the rich against the inunderlying real dustrious poor. Deeconomy as seen in spite the fact that dethe collapse in 1995 posits are sourced of Barings, Britain’s from a broad crossoldest bank”. It is section of the society, therefore no surprise their benefit goes that George Soros has mainly to the rich. described derivatives James Robertson as “hydrogen in “Transforming bombs”. Warren Economic Life” Buffet described states that: “Today’s M Shoaib Omar them as “financial money and finance weapons of mass desystem is unfair, ecologically destruc- struction”. tive and economically inefficient. The Bank for International SettleThe money – must – grow impera- ments (BIS) currently estimates the tive … skews economic effort to- notional amount of all outstanding wards money out of money, and derivatives (including credit default against providing real services and swaps) to be a staggering 600 trillion goods”. dollars, more than 10 times the size A substantial proportion of this of the world economy. Although privately created bank-money is in- debt-financing cannot be ruled out, vested in speculative wagering instru- the solution lies in a shift to equityments, such as derivatives based on based financing, posited on profit and futures, swaps, and options. Such loss sharing, which is the primary betting instruments are not connected characteristic of Islamic Finance. In
this equitable manner, economic effort would be directed at providing useful goods and services, instead of simply making money out of money. At the same time, the wide gap between the supply of money and the supply of real goods and services would be decisively narrowed. The distinguishing features and benefits of Islamic Banking were aptly summarized by the Islamic Development Bank, based in Jeddah, (established 1975) in the following words: “Islamic banking is distinctive in two respects: concentrating on the real sector of the economy, it imparts tremendous stability to the economic system by achieving an identity between monetary flows and goods and services, and by operating on a system of profit and loss sharing in its evolved state, it insulates the society from the debtmountain on the analogy that if the economies enter into recessionary or deflationary phases, the principles of profit and loss sharing protects the states and economic operators from the evils of accumulation of interest and minimizes defaults and bankruptcies.”. The writer is corporate & Islamic finance attorney.
Murder she wrote herself Malik M Ashraf Email: ashpak10@gmail.com
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ive years ago, Benazir Bhutto, a legendary scion and trustee of Bhutto legacy and universally known as the daughter of East embraced martyrdom at Liaqat Bagh Rawalpindi; a martyrdom she wrote herself as is evident from the message that she sent to Mark Siegel before her return to Pakistan. The fact that she knew the risks to her life and yet decided to take them, amply confirms her credentials as a courageous leader of the masses, who valued democracy and service to the people, more than her own life. Her status as an undisputed leader of the masses was confirmed on her return from exile on April 10 1986, when more than one million people thronged Lahore airport to greet and celebrate her homecoming. The dictator was shaken by this tumultuous welcome and support for the young lady, who by now was not known only as Bhutto’s daughter but as a leader in her own right. That popularity was translated into political triumph for her two years later when PPP emerged as the single largest party in the elections, held
after the death of General Zia. Benazir created history by becoming the youngest and the first woman Prime Minister of a Muslim country. Her election as Prime Minister of Pakistan symbolized great snub for the vested interests and the reactionary elements. It also sent a loud and clear message to the world that Pakistan was the most progressive Islamic country. But unfortunately Benazir’s ordeal did not end by becoming the Prime Minister. The establishment and the forces inimical to democratic norms, who had made a tactical retreat in the face of the prevailing circumstances, reactivated themselves and manoeuvred the dismissal of her government by the military-backed President Ghulam Ishaq Khan. She continued to fight the forces of tyranny with exemplary commitment to her cause and made a comeback as Prime Minister in 1993, only to be dismissed by one of PPP’s own stalwarts at the behest of the establishment. The circumstances created by her rival Mian Nawaz Sharif who succeeded her as Prime Minister in the ensuing elections, forced her into self-imposed exile in 1998. The successive set-backs in her political career hardly affected her stature as an unrivalled leader of the masses. In-
stead her popularity among the masses sky-rocketed and further strengthened her image as a torch bearer of democracy. Internationally also she was recognized as the most progressive leader of the Islamic world. She was termed as the most popular politician of the world in the New Guinees Book of Records in 1996 and also included in the list of the hundred most powerful women of the world by the“ Australian Magazine”. The toppling of Nawaz Sharif govt by General Musharraf added a new dimension to her woes. The dictator through a constitutional amendment put a bar on becoming Prime Minister for the third time, ostensibly to keep both Benazir and Nawaz Sharif out of the political arena. He also started vigorously pursuing the politically motivated false cases of corruption instituted by Nawaz Sharif against her and her husband in the Swiss Courts. However, undeterred by these developments she kept lobbying the world governments, specially US to exert pressure on Musharraf to restore democracy in the country. Finally she returned to Pakistan on October 18, 2007 as a result of US backed rapprochement with Musharraf in the backdrop of the
lawyers movement which had considerably weakened Musharraf’s hold on power. Her second homecoming was a much bigger event than her return during Zia regime. Millions turned up to greet her. As predicted by her an attempt was made to kill her through a bomb blast at her rally. She was lucky to escape the attack but about 140 people lost their lives. Even this close shave with death could not keep her away from the masses and she made a conscious decision to continue her election campaign, showing unmatched bravery and dedication to her ideals. But unfortunately her epic struggle for democracy and the cause of poor ended with her martyrdom that nonetheless put the country back on the path of democracy and a representative rule. As is evident, her political career was beset with severe trials and tribulations but she never faltered in her resolve to fight the antipeople entities. It was a story of unparalleled valour and sacrifice. She may have been eliminated physically but she has left an indelible mark on the political canvass of Pakistan which will forever continue to haunt the forces opposed to democracy.
Views From Abroad
Israel kills two-state solution Mustafa Barghouthi
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he two-state solution is dying. The Palestinian effort late last month at the United Nations to attain non-member observer state status was overwhelmingly approved – 138 to 9 – by the international community. Israel, however, warned that the vote would be purely symbolic and change nothing on the ground. This was a calculated and misleading statement. In fact, Israel immediately took revenge for the Palestinians’ temerity in seeking to improve our lot by announcing “zoning and planning preparations” for illegal settlements in the sensitive E1 corridor in the occupied West Bank. This week Israel put out tenders for thousands of new settlement units – the most aggressive activity in the area in years. Israel’s planned settlement construction makes a contiguous Palestinian state virtually impossible. Bethlehem and Ramallah will be cut off from East Jerusalem if the E1 project goes forward, though Israel argues that we can make do with connecting tunnels and elevated roadways, as if that is tolerable. The Is-
raeli plan also closes the settlement semi-circle around East Jerusalem and builds settlements in it – our would-be capital. The north and south of the West Bank would be effectively bisected and Israel would control the key. But the Obama administration appears to be unwilling to do anything meaningful. With Israel’s newest settlement plans announced, all members of the United Nations Security Council issued statements condemning the construction – all except the United States. Though a State Department spokesperson said after Israel’s newest announcement that the US is “deeply disappointed” in Israel’s “pattern of provocation,” the Obama administration, after a positive start, has proven every bit as craven in standing up to Israel as its predecessors. A morally compromised United States will provide no succour. Europe, however, is showing signs of understanding just how serious Israel’s actions are. Several European nations voted in favour of upgrading Palestine’s status at the UN. US allies Germany, France, and Britain all spoke out against Israel’s latest settlement plans. But Europe must go beyond issuing statements, dressing
down Israeli ambassadors, or threatening to recall European ambassadors to Israel. Resolute action from the Europeans is long overdue. Now is the time for Europe to review and discard economic relations that disregard Israel’s export of products from illegal settlements. We Palestinians, with our newfound international standing, are also not as helpless as we once were. We can now go to the International Criminal Court and the International Court of Justice. Those Israeli leaders pursuing illegal colonizing activity in E1 and elsewhere would be on notice that we will actively pursue legal action against them. Those European nations that prior to the vote did not want us to pursue legal action may well be convinced that we are right to push back in a limited fashion against Israel’s land-grabbing response. My response, and that of thousands of Palestinians, has been active non-violent resistance to highlight for the world the injustices we face. The UN bid was nothing but the mildest possible form of peaceful diplomatic resistance. During the last few weeks in both Gaza and the West Bank, the Israeli government, with what amounts to the implicit support of the
United States, has sent one message: It understands and respects only the language of force and violence. I have repeatedly warned of the window closing on the two-state solution. With its latest settlement actions Israel has effectively announced that its government has no interest in the two-state solution. Palestinians of my generation – and many younger Palestinians – will be re-evaluating our options. We simply will not accept being permanently relegated to isolated territories and subjected to a system that Archbishop Desmond Tutu and many other moral and legal authorities acknowledge to be apartheid. Effective punitive actions are needed if Israel is to reverse its present course. If the US does not take this action soon, the West should not be surprised to find an increasing number of Palestinians concluding that the two-state solution has died on President Obama and Prime Minister Benjamin Netanyahu’s watch. The writer, member of the Palestinian Parliament, is secretary general of the Palestinian National Initiative, a political party. — Courtesy: The Christian Science Monitor
Exchange offer..!
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kind salesman has offered to visit our house, said the wife to me just before the festive season. “Whatever for?” I asked. “He’s going to tell us what we need to buy!” “A salesman is going to come to my house and tell me what I need to buy?” I asked incredulously, “You think I don’t know what we need?” The doorbell rang and my wife hurried to open the door, “New
doorbell needed,” said the salesman opening an order book and writing, “This one sound like it’s been here from the last century!” “It’s been here from the last century,” said the wife quietly, as I scowled at her. “And what’s that?” asked the salesman. “My music system,” I said, “And lovelier music I have not heard from any other set!” “Maybe,” said the salesman, “But such a gigantic, monstrosity in your living room? Haven’t people laughed when they see this?” “If they do, I’ll…” “Where’s your TV?” “In the bedroom, isn’t that where most TV’s are?” “Yes, when you don’t want to show off your latest LED, one hun-
dred and fifty inch screen!” “One hundred and fifty inches?” I asked aghast, “This is not a theatre!” “Home theatre,” said the salesman simply, “Haven’t you heard of that phrase?” “I go to the theatre when I want to get out of my home,” I said angrily, “I don’t need to bring the theatre home!” The salesman looked at my wife with a sympathetic glance, as she looked at her toes. “We have a few package deals sir!” said the salesman, “You can decided depending on your budget, “We will either change everything completely or a few things here and there. Here have a look!” “I don’t want any of your packages!” I said, “You may leave!” “Then we’ll
have no option but to offer madam the last package, which we reserve for such situations!” “What package?” I asked hoarsely as I scanned the sheet. “Exchange offer of a new husband, along with all the other goodies!” I could swear I saw the wife smile as I hustled the man out of the house. The wife came back after half an hour, “I took the second deal,” she said, “TV in the front room, new door bell, and latest music system. I could never think of giving you away!” I watched them changing the doorbell the next day, thankful I hadn’t been exchanged..! —Email: bobsbanter@gmail.com
Voice of the People Overcoming energy crisis MALIK SHAHAN ASLAM The limited resources of this planet earth are experiencing the over exploitation due to increasing population day by day. It has given rise to a serious energy crisis throughout the world. Today man is constantly in confrontation with his gratification of the fulfillment of his physiological needs. Same is the essence of Pakistan but the main issues related to energy crisis in Pakistan refers to the lack of effective policies by the Government, Corruption, Lack of resources and Ambiguous Law and order situation. Due to the difference in Demand and supply ratio of crude oil it maintains the rising trend in the International market. Pakistan is a developing country experiencing a very arduous situation of Terrorism, Provincial disharmony on Energy issues (Kalabagh Dam), Foreign pressures and incompetency of Government , it paves the way for energy crisis. In South Asia India, China, Afghanistan and Iran attaining the important Geo-strategic locations of the world. China has become world’s second largest economy, India world’s emerging economy and Iran the example of Self-reliance country and Afghanistan the gateway to the world of natural resources the central Asia where lies the world’s second largest reservoirs of oil .In this whole scenario the question arises why Pakistan is lacking behind??? As we know the economic growth is contingent on energy so utilizing every source of energy can be helpful in bringing Pakistan out of the hovering clouds of Energy crisis. Recent inauguration of first wind power unit in Jhimpur near Thatta was an appreciable step to generate energy from renewable sources. Today there is more need of such possible wind and solar energy projects instead of expensive means of energy to wipe out energy crisis from Pakistan. —Via email
Fake certificates KHURRAM SHAHZAD AWAN Education is the main cause of a reputation to be considered as a well, established and a successful country in the world. Different countries of the world have their own criteria to check the literacy standard in their homeland. In Pakistan we have a measuring instrument for checking the literacy rate is that a person who can write his or her name is considered to be the literate person. Degrees are selling in the market without any restriction and check and balance. There is no criteria available in Pakistan to check the reliability of a qualification certificate. A large number of government and semi government employees are working on the basis of their fake qualification certificates. People can easily take the degree by paying required money demanded by a person for the sake of getting fake qualification certificate. They are not only making the fake qualification certificates but also providing the fake attestation stamps on the back side of the qualification certificate. This is a catastrophic phenomenon in Pakistan and increasing with the passage of time. Government should take necessary steps to stop this illegal act and a strong checking authority should be appointed on an urgent basis to monitor this un ethical and illegal activity. —Islamabad
Liberal education M BAQA QAZI The most important institution in Socialization is Education where man can learn basic features of life. Since it has been disseminated to common people, there has been rapid growth in every sphere of development: science, technology, sociology, politics, anthropology, etc. Now it is activated towards quintessential human right of every individual man. Though, it encompasses a wide sphere of knowledge, it has been metamorphosed by man according to his needs. It can be mainly applied as a tool of economic development. The developing countries, which are still far behind, need to forge efforts to transform their education system in order to catch up with the rest of the world. Not only because it helps in achieving economic development but also because it fulfils the need of society in every sphere of life. Liberal education is required to be based on information and knowledge. It improves the skills and competitiveness of students. As the world has become a global village, the importance of communication skills has escalated manifold. These
1st wind power project IQBAL HADI ZAIDI
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s an honest and true patriotic Pakistani it will be highly im moral on my part not to heartily and profusely congratulate PPP headed by President Asif Ali Zardari on establishing 1st wind power project in Pakistan which to me, if not annoying, is the very 1st achievement for PPP to be honest. 24th December, 2012 can be very rightly called as the golden day for the country as for the 1st time in the history of Pakistan President Asif Ali Zardari inaugurated 1st wind power project in Jhimpir, Thatta district, Sindh which will be operational next month producing 50 MW which is just the beginning. So far so good because at least something concrete has been done by PPP government to ease power shortage though 50 MW is very much insignificant so far as our total power requirement is concerned but nevertheless it is a right step in the right direction. However why did we take so many long years to embark upon the activity which is not our new invention in any case? What stopped PPP which boasts of being the most popular political party of the country to embark upon such project earlier when it ruled the country many long years back when Zulfiqar Ali Bhutto was on the driving seat or for that matter when Benazir Bhutto had been on the throne? Even Zardari is on the seat for almost 5 years time and this was not given any importance and priority. —Kuwait
few objectives of liberal education are very important for developing countries including Pakistan. Another benefit would be the eradication of poverty. Liberal education will also help in raising the living standard of every common man as it is directly proportional to the income of a family. —Karachi
A social stigma HUMNA ALI Corruption although can be classified into a thousands of categories depends on how good people manipulate things. However the basic and most common type is “bribe” which has far reaching implications towards the destruction of complete system. Any system would be declared as a complete failure once the corruption starts appearing even on the grass root level. It really hurts when I see a thousand white elephants in every single department with a big mouth opened before the poor and needy and the most concerning and funnier part of the story is that one has to bribe to get into a position where he can ask for the same and the chain reaction goes on and on. If we peep into the golden pages of history of our own country every single day out of these 62 years is like a page full of thousand cases of corruption right from demarcation to 5 martial laws, from peon to board of governors and even from sports field to getting your child admitted to a good school. For promotion, business, politics etc. Even for basic necessities like electricity and now even sugar, this is what we see in any corner we look at. Crux of the matter is that this is a social stigma we are living with and this is the time to bring about a change, a revolution. So the need of the hour is to develop ourselves a sound sense of what corruption actually is and take all those measures so as to eradicate it right from the grassroot level. Merely including a chapter on corruption in curriculum at schools won’t be as effective as a parent inculcating the same sense in a child by making it a part of child’s basic moral values list for it is the foremost solution to the social stigma we are living. It is the time that we realize and do something in real rather than joining the social services communities on facebook and makes our country Pakistan a better place to live in. —Lahore
Women’s sufferings M ASHRAF There are so many organizations active for cause of suffering women, throughout the world. Are these redressing the root cause of the problem? Are these really concerned for suffering women? Are these really needed at all? Working of all these organizations gives every indication of lacking proper analysis and planning for helping the suffering women for all times to come. Unplanned approach to any problem must result in mockery of the issue, whereas this particular issue concerns the honour and dignity of mother of human beings. Undisciplined approach in the matter may appear to be merely for popularity and reputation. Every religion with a book of instructions strictly instructs for respect and regards for women. In more than 90% cases of abuse to women, the males involved are believers by inheritance and they have never studied the books of their belief, in whole life. Majority of them are illiterate due to which they cannot even think of going through the instructions of the Holly books that teach them to be polite and kind to women. All low literacy states suffer from multiple complex crimes including survival of corrupt politicians, who pollute every nook of every social setup. In such states women and children suffer most. Misbehaviour and
cruelty against one woman affect more than three children on the average, in one home. What to talk of millions of homes throughout the world? Newspapers’ articles give lists of kinds of violence (maximum seven: honour killing, rape, sexual harassment, handing over of women in compensation, acid attack, forced marriage and marriage to the Quran) against women, but nobody mentions about a serious violence of using women to display their bodies for earning millions in favour of groups of males completely clad from toe to neck. Use of tele / print media devices against the norm of cultural values of the society creates unsolvable problems for conservative class of housewives and children. A few dozen people maintaining kingly lives through business of modeling and fashion shows in conservative sections of various societies are causes of complex troubles for so many house wives. Illiterate rich husbands expect modeling gestures from their wives and engineer out cause of friction in the family. The ruling authorities have an important responsibility to maintain pro culture atmosphere. They need to strongly obstruct anti culture activities at all costs for maintaining tranquillity in social setup. All social setups can never submerge in a single way of living. Permitting free hand to tele / print media will result in more and more crimes and corruptions and more cases of torturing women and children. —Via email
Values in changing times RABIA SALEEM With the passage of time it has been felt that there is a need to educate our youth regarding their moral values and norms. Pakistan is a country where people uphold values learnt at their feet of their grandparents, parents and teachers. We would rather die than part with our values. But today we are shedding off the values learnt in childhood for materialistic gains. We hardly remember them despite of following them. However, we still find many people who are developing and maintaining divine values. The whole world today is in much turmoil and confusion. We have lost all faith in God and fight over petty matters, giving the ‘I’ utmost importance instead of ‘We’ for whose welfare we were taught to work for. We had been believing in a joint family system for sticking together in joy and sorrow for ages. But today, we find nuclear families, members of which do not know who to turn to in adverse circumstances as well as with whom to celebrate good times. Parents are the most respected and priceless gift from God to us but still we don’t realize their importance and neglect them by giving our preferences more priorities. We disrespect them and don’t obey them. However, since childhood we have been taught to obey our parents and have great respect for them. Our old values of thrift and shunning of material comforts are giving way to luxury and overspending. We have to educate our youth about values before they get lost in their quest for wealth and power. The onus is now on Educationists and Spiritualists to educate today’s generation about the ‘real’ wealth of our country. We must have great concern on educating the youth about their detoriated values because in changing time we will find people who are totally unfamiliar to their basic norms. —Lahore
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