Comment: Islamic finance is powering Britain’s economy
By Dr Muhammad Abdul Bari
Muslims in Britain may have a trust deficit among young people or even in the wider society, according to a recent ComRes poll, but the situation is not all depressing.
When it comes to the economy the Muslim community is more resilient and proving to be a real asset for the country. This is being acknowledged by more and more people. According to the Muslim Council of Britain (MCB), the British Muslim community contributes £31 billion plus to the UK economy and "13,400 Muslim-owned businesses in London alone are creating 70,000 jobs".
Muslims originate from four corners of the world and the continuous success of Islamic finance amid global economic slowdown can only be positive for the British economy. This is something that political and financial leaders from Britain and the Muslim world want.
In a groundbreaking announcement made during the ninth World Islamic Economic Forum (WIEF) – the first time the forum has ever been held outside the Islamic world – prime minister David Cameron boldly declared that the Treasury is drawing up plans to issue a £200m Sukuk (a form of bond that complies with Islamic financial law). He emphatically reiterated London's role as a world city: “We've got 1,800 political and business leaders from over 115 countries here in London – the most open and inclusive capital on the planet –and the greatest centre for Islamic finance in the Western world."
In spite of huge political crisis in some parts of the Muslim world, Islamic finance has done remarkably well. The prime minister has realised that "Islamic finance is growing 50% faster than traditional banking and when global Islamic investments are set to grow to £1.3 trillion by 2014, we want to make sure a big proportion of that new investment is made here in Britain". He announced that the London Stock Exchange was preparing to launch an Islamic Market Index to help the managers of sharia-compliant funds identify new investment opportunities. Chancellor George Osborne and London mayor Boris John have already been commenting onLondon's ability to attract inward investment from the Muslim economy.
The fact that for the first time the WIEF event has been held in London is a testimony that there is a huge goodwill from both British political and financial leaders and the Muslim world. This is a win-win situation.
Islamic finance has not only survived the global financial storms since 2008 but has also out-performed the conventional economy in its growth and service to people. The main reason for its relative success is Islam's insistence on the sharia-compliant (interest-free) financial dealings which began its expansion in many Muslim countries during the1970s. During the 1990s conversations started between the British Muslim community leaders and financiers and politicians and the banking sector on how to accommodate sharia-compliant finance within the British financial regulations. Some accommodations were made and this paved the way for several mainstream banks to come up Islamic finance offerings (the Islamic Bank of Britain arrived in 2004). It has been a positive journey. Today, London is a hub of Islamic finance, with corporate (investment) or consumer finance (e.g. mortgages).
The 2.78 million strong Muslim community, with its diverse background, is still under-performing in some areas of British life. But things are changing. With a disproportionately high youth population the potential for the community to perform better has always been there. In recent years many British Muslim youth have entered the job market as working professionals. There is a strong trend to join the financial sector and many in the new generation are entering into small and medium sized businesses, too.
Realising the potential, Britain's largest Muslim umbrella body, the MCB, has been trying to bring the WIEF to London to explore further potentials and bridge the gap between Britain and the Muslim world. London, as the financial capital of the world, has indeed the magnetic pull due to its long-standing virtues of openness and innovation.
British Muslims are still going through some bad press, because of the criminal activities of certain extremists from within the Muslim faith. This has been further exacerbated by sections of the right-wing media, political class, and blogosphere. Stereotypes of Muslims as benefit scroungers, 'aliens' or 'other' – as niqab wearers and immigrants who don't belong here – take a long time to shake. In recent times the brutal murder of Lee Rigby in Woolwich, sexual grooming, the niqab issue and English Defence League marches across the country have heightened this tension.
Mosques have come under arson attacks, one Islamic centre in north London was destroyed by a fire in an apparent hate crime attack, an elderly Muslim grandfather was murdered and bombs were let off outside mosques in the West Midlands (for which a self-confessed foreign neo-Nazi has now been found guilty and jailed for 40 years). The anti-Muslim hate crime monitoring service, Tell MAMA, reported a large spike in online abuse targeting Muslims since Woolwich. Several men and women were found guilty of enticing mosque arson over social media.
There is still a perception in wider society that Muslims are stone-age fundamentalists, locked onto benefits, bent on creating news with uncomfortable practices such as wearing the niqab. But a deep look at the Muslim community's developing economic and social realities challenges this. With increased economic co-operation between Britain and the Muslim world the state of the Muslim community can only get better; this will boost their confidence and positive social engagement in all areas of life will enhance.
Faith for each other brings harmony. The British Muslim community has plenty to offer – to themselves and their fellow citizens. The presence of nearly 2,000 political and business leaders from over 115 countries in the WIEF in London should be seen in a positive light.
Dr Muhammad Abdul Bari is the former secretary general of Muslim Council of Britain (2006-10). Follow him on Twitter @MAbdulBari
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