business

Japan looks for growth from Islamic finance boom

15 Comments
By Bernardo Vizcaino

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15 Comments
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What is this implying? That Japan's future growth depends on ISIS or Iran? Japan should think again, if that is the case.

3 ( +9 / -6 )

A crash course for anyone unfamiliar with how it works:

Because Islam forbids interest, I instead give you money in exchange for a share of whatever you buy with my money. You pay me a share of the 'profits' (whether you make a profit or not) at regular intervals and once I have collected a previously agreed maximum amount of 'profit', I relinquish my share back to you.

Yes, it sounds just like interest...IMO It's just a clever scheme by wealthy Muslims to pretend that they are observing the 'no interest' rule. We shouldn't have to re-design our entire tax system on property transfers just to facilitate these schemes.

11 ( +14 / -3 )

Thanks for that information, M3M3M3. Obviously, whatever Japan is doing with the economy right now isn't working, and they need to change it, but I'm not keen on why that is (I probably need to "google" it). But obviously whatever is happening in Japan is having the leaders scramble to fix it or change the system entirely, which is why they're looking at this system. It seems sketchy, according to M3M3M3, but this article seems to imply that the system works.

1 ( +1 / -0 )

What is this implying? That Japan's future growth depends on ISIS or Iran?

How about Indonesia, Malaysia, UAE (Dubai, Abu Dhabi), Qatar? Hardly a bunch of terrorists or in pursuit of weapons of mass destruction.

2 ( +7 / -5 )

The problem I have with 'Islamic finance' is that it's built on a convoluted deception. First, the legal title of any assets are transfered into the names of the investors, but then the investors are forced to contractually sign away any rights to lay claim to the assets (ie. they are prevented from going into the factory and take back the machine that they legally own). It creates a overly complex legal structure with the sole purpose of making it look like investors have more legal rights than they actual do.

Of course, all of the big banks and professional investors understand how this charade works but the purpose of the FSA is to protect ordinary consumers from being confused or decieved by schemes which ultimately undermine confidence in financial markets. We really shouldn't even call it Islamic finance, because once the FSA approves this type of investment structure, other investment firms which have nothing to do with Islam will be able to replicate it.

1 ( +4 / -3 )

"How about Indonesia, Malaysia, UAE (Dubai, Abu Dhabi), Qatar? Hardly a bunch of terrorists or in pursuit of weapons of mass destruction."

The economies of Indonesia and Malaysia have long been dominated by the Chinese minorities, who are more than happy with interest (and which helps explain their wealth and success and the Islamic world's poverty).

The Gulf states get the bulk their wealth from the West and east Asia, simply by selling the oil that happens to be under their feet.

1 ( +5 / -4 )

****Be wary of the last word in the headline.

2 ( +4 / -2 )

To my understanding, this is neither a terrorist financing scheme nor another form of Interest rates. It is an ethics based financial system whereby money can only be made based on lawful assets. In conventional finance, risk is transferred from one party to another. But in Islamic financial system, risk is shared. So, both the parties work cooperatively to get a better outcome at the end. Another important difference is that in conventional finance, money can be made out of money. But, in Islamic finance, money can only be made through an underlying real asset.

You are not allowed to invest Islamic Finance money for buying weapons of any type. This is one of the basic preconditions of the system. So, let us not give any sweeping statements without knowing the basics.

5 ( +6 / -1 )

There is a fairly scathing article about Islamic finance by Muhammad Saleem in the FT for anyone interested in reading a bit more.

http://www.ft.com/cms/s/0/398e4cc0-a733-11db-83e4-0000779e2340.html#axzz3WUHxD7OU

1 ( +5 / -4 )

If you don't know who the sucker is at the poker table, you're it.

3 ( +5 / -2 )

Islamic oil producer nations join together to control and manipulate the crude oil prices for profit are acceptable. Do interest and profit reflect same aspect with different application? Would Islamic banking lend money to infidel without discrimination and interest as well? Do rich Islamic nations treat poorer ones on equal footing without discrimination? I am sure, there are plenty of spin to the questions.

0 ( +2 / -2 )

Islamic oil producer nations join together to control and manipulate the crude oil prices for profit are acceptable.

Venezuela, Ecuador, and Angola are "Islamic" now? Interesting.

Would Islamic banking lend money to infidel without discrimination and interest as well?

"Infidel"? What a weird word choice. To non-Muslims, yes, at least in Malaysia these banks can be used by non-Muslims.

1 ( +1 / -0 )

Islamic financial assets have now increased to little less then 2.5 trillion dollars globally. It is THE fastest growing segment of the financial industry. Soverigns like South Africa, Britain, Hong Kong, Luxembourg can not be all wrong. They issued Sukuk, one of the most popular Islamic financial instruments now. Investors are finding it more attractive to invest in Islamic financial products instead of the conventional ones.

During and after 2008 global financial crisis, Islamic financial institutions proved their stability. This is not all nonsense. It is some thi8ng serious which one can not ignore

2 ( +3 / -1 )

Cool.

0 ( +0 / -0 )

Regardless of how one feels about Islam, it's insanity for banks to ignore a growing $2.5 trillion market

-1 ( +0 / -1 )

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