Islamic Finance and Politics: Guilt by Association

Ibrahim Warde

in Islamic Finance in the Global Economy

Published by Edinburgh University Press

Published in print February 2000 | ISBN: 9780748612161
Published online March 2012 | e-ISBN: 9780748653072 | DOI:
Islamic Finance and Politics: Guilt by Association

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Critics of Islamic finance focus on the political mischief of Islamic banks on domestic and international terrain. The suspicion surrounding Islamic banks rests on the syllogism: political Islam at the domestic and international level requires financial resources, Islamic banks are committed to Islam and have vast financial resources; therefore, Islamic banks are likely to advance the political goals of potentially subversive Islamic groups. Do Islamic banks have a domestic or international political agenda? Do they play a role in promoting radical Islam and international terrorism? The answer is that they usually do not. Banks, by virtue of being part of the existing power structure, have a strong status quo orientation. However, there are exceptions to that general rule. As will become evident in the succeeding discussions, the benign view is not widely shared among authoritarian leaders, who often see financial Islam as a destabilising force. This chapter discusses the connection between Islamic finance and politics in domestic and international contexts, comparing the evolution of financial Islam in Saudi Arabia, Egypt, Turkey, Sudan and Indonesia. It also discusses the role of Islamic finance in the New World Order and in the post-September 11 world, where Islamic financial institutions have often been considered ‘guilty by association’.

Keywords: Islamic finance; political Islam; international political agenda; politics; New World Order; post-September 11; guilty by association

Chapter.  9505 words. 

Subjects: Society and Culture

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