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Sharia for complete bankers - Part 1

Our resident Mozzie, Irfan Yusuf is a regular contributor to Webdiary and I don't mind saying one of my favourites. His last contribution was On Valentines and Half-Requited Love.

by Irfan Yusuf

If you ever decide to try your luck and visit Indonesia or Malaysia with your travel expenses not financed by - shall we say - non-prescription medications, you’ll notice the word “Syaria” on signs and billboards and even on neon building lights all over the place.

Syaria” is how the beautiful people of the Malay and Indonesian tribes spell that word we’re all scared of. You know. The word that reminds us of chopping hands and stoning people who tip-toe into other people’s bedrooms.

Sharia is a concept that scares the shut (as they’d say in Otago) out of so many of us accustomed to living the good life in the lands of the free. Sharia conjures up a life with no privacy, where bearded morality police in long robes patrol the streets searching for spare limbs to amputate.

Of course, you won’t find many of these dudes and dudettes (women with both beards and hijabs? Allah help us!) patrolling the streets of Jakarta, Bandung, KL or Penang. Instead, if you ask anyone why there are signs about Syaria everywhere, you’ll soon learn that Sharia is for complete bankers.

Abu Bakar heads down under for Sharia training

A few Saturday nights ago, I went to a hotel in the geographical heart of metropolitan Sydney. I had an appointment with Sheik Abu Bakar from Malaysia. I was to join him for dinner, and to receive training in Sharia.

In fact, there were around 100 of us attending the dinner and lecture. And in case some of you are a little panicky because you believe everything Miranda Devine writes, I’d better set your minds at ease. The Abu Bakar we met doesn’t share his surname with the Governor of New South Wales.

In fact, his name is Dr Mohd Daud Bakar [url: www.islamicfinancenews.com/poe_bakar.php] and he is the CEO of the International Institute of Islamic Finance. Dr Bakar is an adviser to numerous banks and financial institutions in Malaysia, the Middle East and Australia that provide financial products complying with Sharia. He even advises the Dow Jones Islamic Index (yes, there is such a thing) on the selection of equities compliant with Sharia.

It all sounds really impressive. And it certainly would be if I could understand any of it. Although I did manage to complete a Bachelor of Economics, I also managed to fail at least one finance course (not to mention numerous accounting subjects). And I tend to read the Australian Financial Review when something I wrote in it appears or when I am at my uni and can get it half-price. But whatever you do, don’t tell them that!

Dr Bakar is probably used to delivering seminars to people who are struggling to look interested in what he has to say. Tonight his fascinating topic was the “Islamic Equity Market”. And what can I remember about his presentation?

Well, the chicken was a bit on the rubbery side. Two dudes sitting next to me kept mumbling away to each other in Turkish. Some bright-eyed chick in a hijab at the next table kept winking at me and waving. She then got up and walked right past me to embrace her female friend sitting behind me.

Some chicks have all the luck!

I$lamic inve$ting

Thankfully, our hosts from the Muslim Community Cooperative (Australia) Limited (MCCA [url: www.mcca.com.au/]) gave us a set of handouts. Dr Bakar had eight pages worth of powerful powerpointed stuff on the various forms of Sharia-recognised business enterprises. As I soon found out, the only thing amputated from Sharia commercial and finance law is usury.

Dr Bakar then taught us about the principles of Sharia-compliant share investments. Basically it is a two step process. First, you look at the company’s core activities. Core activities which aren’t Sharia-compliant include operations based on usury eg commercial and merchant banks. It also includes operations involving gambling, the production and sale of liquor and cigarettes etc.

If the company’s core activities are compliant with Sharia, go to step two. This consists of looking at the other non-core aspects of the company’s operations. Most companies have non-core activities which are a mixture of halal and not-so-halal, in which case the company has a few more hoops to jump through before its shares can pass the stringent Sharia quality-control procedures.

One really contentious issue is that of how we define usury (the Arabic word is riba). On this issue, there is a fair degree of argument and controversy amongst Sharia scholars. But don’t worry. The issue is so esoteric and complex that I’d be surprised a mob of Damascus dimwits will be burning embassies over it.

I$lamic economic$

Books are my passion. I have a fair few titles I picked up whilst travelling through Indonesia. One is a volume of essays entitled “Islamic Perspectives on the New Millenium” and edited by Professors Virginia Hooker and Amin Saikal of the Australian National University. The volume was first published in 2004 by the Institute of Southeast Asian Studies (ISEAS) in Singapore.

A whole 40 out of 250 pages of the book is devoted to “The Economy”. If you look at the authors, it isn’t hard to tell how big this whole area of Sharia-compliant economics and finance is in this part of the world.

But then, that shouldn’t surprise anyone. This is a region full of linguistic and cultural diversity, with mercantile activities perhaps being the only aspects of life that have historically united the many peoples of this region.

Islam came to this part of the world in three ethnic waves. The first and perhaps most important wave (especially in Java) were largely Chinese. Books and articles about Admiral Zheng He [url: www.islamfortoday.com/zhenghe.htm] are all the craze in Indonesia.

(I’d love to write about him more, but I’ll end up losing my train of thought and stuffing up this already lengthy article.)

Then there were the important Indian and Yemeni waves, which introduced Arabic script and Hindu-Arabic numerals (not just Hindu numerals since the Arabs are believed to have invented the zero).

The various animist and mystical tribes were happy to adopt Islam since it gave them a script and a method of accounting that made trade so much easier. Islam was brought to this region not by armies but by merchants able to provide a system of accounting and commercial law that solved numerous protracted trade-based disputes amongst warring tribes from different regions and islands.

More on $haria

If by some miracle you have reached this far, you may have realised this article has already reached 1,094 words. Hopefully, you will get some idea about how Sharia is largely about ... well ... about $haria! Once I’ve gathered some more thoughts and read the relevant chapters of Hooker & Saikal, I’ll get back to you with more.


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Irfan's a treasure!

Irfan, I just wanted to thank you for your work here and elsewhere. You stand on the bridge showing the way and encouraging the timid on both sides to come on over. It is a hugely important role and you seem to be doing it with grace and very good humour.


I wonder what the payback on this loan will be?

Iran has pledged to provide financial assistance to the cash-strapped Palestinian Authority following threats by Western nations to halt aid to a Hamas-controlled government.

More on sharia:

I posted this information elsewhere already but I'm curious Roger as to your take on it:

From UK's The Independent: Gay pride parade banned in Moscow so as not to offend Muslims:

Earlier this week Chief Mufti Talgat Tadzhuddin warned that Russia's Muslims would stage violent protests if the march went ahead. "If they come out on to the streets anyway they should be flogged. Any normal person would do that - Muslims and Orthodox Christians alike ... [The protests] might be even more intense than protests abroad against those controversial cartoons." The cleric said the Koran taught that homosexuals should be killed because their lifestyle spells the extinction of the human race and said that gays had no human rights.

Irfan, I've heard that Sharia demands death for homosexuals but is this really the case? Are there countries imposing Sharia where homosexual behavior is not a crime?


Mike, my article focuses on the financial and economic aspects of that broad legal tradition known as 'sharia'. Like all legal traditions (common law, continental etc), sharia is not limited to criminal law or law pertaining to matters sexual.

I am unable to advise you on what position sharia takes on these matters. but for us living in Australia, the attitude of most sharia scholars is that we follow the law of the land.

That means we do not discriminate against people on the basis of their sexual preference unless it is pursuant to an exemption allowed in legislation.

Further, as far as I am aware, there are no countries enforcing sharia in its totality.

How religion works in the political sphere

Mike Lyvers quoting The Independent newspaper: "The cleric said the Koran taught that homosexuals should be killed because their lifestyle spells the extinction of the human race and said that gays had no human rights."

Well, it's a common mistake to think that just because some religious figure says that "homosexuals should be killed" or that "gays have no human rights" that this in some way reflects what he actually thinks, or otherwise reflects his approach to social issues or would in any way colour his judgement about the rights of others.

For example, our own Prime Minister's ill-considered remarks, reported in today's Herald, namely;

There is within some sections of the Islamic community an attitude towards women which is out of line with mainstream Australian society.

clearly indicates the utter depths of racism charactersitic of his government, and of Australian intolerance generally.

As Kayser Trad, of the Lebanese Muslims Association, has pointed out, Howard is "unfortunately just pandering to the Islamaphobia out there by making these comments".

Howard's qualifying his remarks by expressly referring to a "minority" or "extremists" within the broader community doesn't in any way mitigate his offense.

As it has elsewhere been pointed out, to say that religion "is only a cover" for other social or political agendas is to say that all its practitioners "are hypocrites essentially", and is thus a racist slur.

Get the picture?

How Weligion Rorks (Apologies To Lewis Carrol)

CP, sarcasm and sophistry are a powerful mix. Well done, and not a single Left/Right to be found. I'm proud of you. Does this mean you have turned over a new leaf?

What's that? I misunderstood you. Nah!

The Catholic Litmus

Roger Fedyk :"CP, sarcasm and sophistry are a powerful mix. Well done, and not a single Left/Right to be found. I'm proud of you. Does this mean you have turned over a new leaf?"

I've developed a new method called The Catholic Litmus. When someone is alleged to have made a racist remark about this or that community, you substitute the word "Catholic" for that of the allegedly aggrieved group and see what happens.

So, when Johnny says;

"There is within some sections of the Islamic community an attitude towards women which is out of line with mainstream Australian society."

We substitute "Catholic" for "Islamic" and see how "racist" it sounds.

"There is within some sections of the Catholic community an attitude towards women which is out of line with mainstream Australian society."

- and we come up with the answer: Tony Abbott.

So, no.

The remark is not racist, because it could without offense be directed at another important religious minority, namely the Catholics (me being a Catholic, I can tell).

Moreover, the remark is actually demonstrably true.


CP, ingenious and instructive. Along with "Gaydar", I am adding that to my useful literary toolkit.

Speaking of Suicidal

I reckon anyone joining the armed forces under today's political leadership is taking on a possible suicidal task.

The forum you cited, C Parsons, is so obviously a propaganda stunt that would appear to work the way it gets the West's media in a lather.

E for effort

Michael de Angelos: "The forum you cited, C Parsons, is so obviously a propaganda stunt that would appear to work the way it gets the West's media in a lather."

Well, I have to admit it's an hilarious insight into the thinking of the current regime in Tehran.

I am absolutely sure, too, that if a similar course was on offer by the Houston Baptist University in Texas, you wouldn't bother even mentioning it.

Would you?

Oh no! ....that U word.

Irfan, now you've done it. You mentioned the U word. Flak jacket time. Sharia-economics is guilty of actually reading the label on the sauce bottle and passing judgement on the additives. Everyone knows you should never read the fine print. Just unscrew the cap and splash it on like there's no tomorrow, Aussie style. You know it makes sense. Being your average white anglo, I know for a fact that OUR economic system is beyond reproach. I well remember those pictures of Scrooge McDuck having to move piles of loot armed with nothing but a shovel, all the while burdened with spats, cufflinks and a top-hat. Thank Allah for computers, that's all I can say. Now look here, mate, we don't usually use the U word anymore. And while you're at it, never use the word "banking" without attaching the word "industry" - got it? Never say that banks "take" a profit. Always say "make". It goes down so much better with the "consumers" and we wouldn't want to rouse them from their sleep, would we? But now you've whetted my appetite and I can't wait for episode 2.


Islamic banks are in the business of making money too. They are not charities. They charge their customers who borrow money, and they reward customers who deposit money.

The difference is in the method of calculating the charges/rewards.

Depositors in an Islamic bank are more like shareholders. If the bank takes a profit, depositors will be assigned a share of the profit in accordance with the amount they have deposited. This also means that if the bank makes a loss, the depositors will have to share that loss.

Borrowers effectively go into a joint business with the bank, and have to share the profit they take with the bank.

Islamic banks get around the charging of interest by imposing set fees regardless of the size of your bank balance or overdraft.

Irfan, thanks

Irfan, thanks for the interesting article - it reminds me why the internet is so useful. Also, I think I may have seen a brief shot of you on 60 Minutes last night, although I didn't watch it long enough to see whether you had a chance to speak.

HEC of a Lesson

I wonder if they have to pay HECS for this course?

Default rate

Phil Moffat: "I wonder if they have to pay HECS for this course?"

Yes, but they don't have to pay any interest on the student loan.

Sharia — A Different View

I think many Webdiarists will, like me, be relatively ignorant of details of Sharia Law beyond the snippets we see in the media which tend to be dominated by stories of stonings, amputations, honour killings and the like.

This link, Islam’s Shariah and Australian law, was provided recently by a contributor on New Matilda. I found it very enlightening. I hope Webdiarists will take the trouble to read it and become better informed.

Suicide 101

Talking about Sharia and university education:

About 200 students attending a seminar on suicide-bombing tactics at Khajeh Nasir Toosi University in Tehran on Saturday heard Mohammad Ali Samadi, spokesman of Esteshadion (Martyrdom Seekers), say that his organisation had registered "more than 52,000 people who willingly were ready to defend their country. If they strike, we have a lot of volunteers. Their [US and British] sensitive places are quite close to Iranian borders," he said.

A university seminar on suicide bombing tactics?


CP, do you have anything to say on Irfan's topic?

God didn't make them do it

Yes, Roger, it's my guess that the Iranian uni course on how to be a suicide bomber has nothing to do intrinsically with Islam or Sharia law any more than does, say, honour killing.

This buttresses the point I make elsewhere, that it is a mistake to suppose that genuine religious feeling is at the bottom of everything that justifies itself by taking a religious shape.

Similarly, there is little scriptural basis to most of the customary practices of Catholicism. Confession, for example.

Nor the special virtue of Mary, nor her Immaculate Conception.

But this doesn't mean it is not ardently believed by practitioners.

Killing people for the sake of such myths is pointless. Don't you think?

God Did So!

CP, I agree with you wholeheartedly.

The world is full of bullshit and bastardy masquerading as truth and piety.

I like the description of religion which says "institutionalised madness" and "opiate of the masses", and I don't care who said that.

We are "born killers" who only need the slightest excuse to rampage through the next street, next suburb, next town, next country.

It takes a superhuman effort to conquer that urge. I will admit that a very small handful of genuinely religious people would never do such a thing but the great majority, as Hitler proved so readily when he had the German churches bless the storm troopers of his unholy war, will join the baying mob, licketty-split.

Perhaps there are pacifist Muslims, I assume that they are similar in number to pacifist Christians. However, that does leave an awful lot of us to advance the cause of killing in Someone's name.

That sharia law can be so easily extended to commerce just proves that when it comes to pulling the wool over Allah's eyes the Muslims are just as adept as we are to God's eyes. What's that down the back? You reckon they are the same thing. Come up here and I'll knock your block off for being a heretic and just for good measure this guy here with the scimitar will hack off what's left!

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