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Saturday, March 7, 2009

[ALOCHONA] Jakata Conference Calls For Growth of Islamic Finance

Jakata Conference Calls For Growth of Islamic Finance

Islamic finance and banking must be developed as an alternative to the discredited Wall Street model of doing business, the World Islamic Economic Forum resolved as it wrapped up Wednesday in Indonesia, international news agencies have reported.
   More than 1,550 delegates including prime ministers, presidents, princes and sheikhs from 38 countries issued a declaration calling on the Islamic Development Bank to take the lead in promoting Islamic finance.   They also called for 'effective regulations' in the conventional global financial industry to 'mitigate risk and failure' in the aftermath of the Wall Street collapse triggered by a credit crunch in the
US housing sector.  The declaration expressed support for the IDB Task Force for Islamic Finance and Global Financial Stability to 'promote Islamic finance and banking as a viable alternative to the conventional financial system.' It also called on 'governments and Islamic banks to expand sharia (Islamic) compliant micro-credits' to small businesses in the developing world.  'The declaration has a host of policy recommendations that, if implemented widely, would enact real change within the Muslim and non-Muslim world,' World Islamic Economic Forum Foundation chairman Tun Musa Hitam said.The fifth Islamic economic forum opened in Indonesia, the most populous Muslim country and the largest economy in Southeast Asia, on Monday. Other items on the agenda included the 'global food crisis' triggered by last year's price spikes and falling production, alternative energy and the future of fossil fuels. The delegates included corporate leaders from 87 companies as well as governmental and non-governmental organizations.

We agree with the recommendation of the forum. The latest financial crisis that has engulfed, more or less ,  the whole world has proved that old-style capitalism is not an ideal system. Apart from failure in regulations, it has in-built problems, riba-based operations are essentially faulty. Such operations do not produce responsibility and care, on the other hand its positivist  ( value-free ) stance makes it social – Darwinist in character and worshipper of  money. It is time for the world to turn towards Islamic financial system , it should be seen not as a religious system by the West but as a financial alternative mode. At least Muslim word should accept it in full.



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