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Intra-OIC Trade - The Lost Decades

It is not easy to find economists that agree on something. But international trade seems to be the exception: free trade is better than protection. Or in the words of Adam Smith: “if protection is levied, it will divert industries from more advantageous trade to less advantageous trade.” Speaking at the 30th meeting of the Organization for Islamic Cooperation (OIC) recently, Turkey’s President, Abdullah Gul called on Muslim countries to recognise the potential of open trade: "We need to liberalize trade among member countries and mitigate barriers for customs as soon as pos...

IB Insights | June 19, 2014

Intra-OIC Trade - The Lost Decades

Intra-OIC Trade - The Lost Decades

It is not easy to find economists that agree on something. But international trade seems to be the exception: free trade is better than protection. Or in the words of Adam Smith: “if protection is levied, it will divert industries from more advantageous trade to less advantageous trade.” Speaking at the 30th meeting of the Organization for Islamic Cooperation (OIC) recently, Turkey’s President, Abdullah Gul called on Muslim countries to recognise the potential of open trade: "We need to liberalize trade among member countries and mitigate barriers for customs as soon as pos...

IB Insights | June 19, 2014

Islamic Finance in the US: Slowly but Surely

The US houses one of the World’s most developed economies, yet the country is seemingly lingering behind when it comes to comprehensively participating in the Islamic financial industry. There are several reasons for this conundrum ranging from America’s secular history, lack of knowledge regarding Islamic business principles, and absence of data surrounding the bankable Muslim markets residing in the US. Still, Islamic finance exists in the American market, and the potential for the industry’s growth is becoming more and more apparent. The evolution of the Islamic fina...

Fatimah S. Baeshen | May 09, 2014

Islamic Finance in the US: Slowly but Surely

Islamic Finance in the US: Slowly but Surely

The US houses one of the World’s most developed economies, yet the country is seemingly lingering behind when it comes to comprehensively participating in the Islamic financial industry. There are several reasons for this conundrum ranging from America’s secular history, lack of knowledge regarding Islamic business principles, and absence of data surrounding the bankable Muslim markets residing in the US. Still, Islamic finance exists in the American market, and the potential for the industry’s growth is becoming more and more apparent. The evolution of the Islamic fina...

Fatimah S. Baeshen | May 09, 2014

Money creation and the misconceptions

Where does money come from? During the 19th Century the answer to this question was relatively simple: money was backed by gold, so the amount of money that the Treasury would print or mint was limited to the amount of gold held in the gold reserves.Today, with the Gold Standard a distant memory, the process of money creation has been shrouded with misconceptions. Economic literature and textbooks note that money creation begins with the bank receiving the deposit, without stating the source of the deposit:University of Nebraska (2012): Each time a bank receives a deposit, it sets aside...

Shakeeb Saqlain | March 23, 2014

Money creation and the misconceptions

Money creation and the misconceptions

Where does money come from? During the 19th Century the answer to this question was relatively simple: money was backed by gold, so the amount of money that the Treasury would print or mint was limited to the amount of gold held in the gold reserves.Today, with the Gold Standard a distant memory, the process of money creation has been shrouded with misconceptions. Economic literature and textbooks note that money creation begins with the bank receiving the deposit, without stating the source of the deposit:University of Nebraska (2012): Each time a bank receives a deposit, it sets aside...

Shakeeb Saqlain | March 23, 2014

Reputational Risk and Corporate Governance

Though more is being written about reputational risk there is still surprisingly little that is research/evidence-based. Too often what appears is more polemic than perspective and lacks sufficient context. Though reputational risk is different to other risks companies are not taking adequate steps in addressing it. This is partly because it is not seen clearly enough as a boardroom issue. There are clear advantages in implementing a proper reputational risk management strategy and in recognising the value and benefits of a reputational risk approach. An increasing number of respected indep...

IB Insights | December 19, 2013

Reputational Risk and Corporate Governance

Reputational Risk and Corporate Governance

Though more is being written about reputational risk there is still surprisingly little that is research/evidence-based. Too often what appears is more polemic than perspective and lacks sufficient context. Though reputational risk is different to other risks companies are not taking adequate steps in addressing it. This is partly because it is not seen clearly enough as a boardroom issue. There are clear advantages in implementing a proper reputational risk management strategy and in recognising the value and benefits of a reputational risk approach. An increasing number of respected indep...

IB Insights | December 19, 2013

Designing a Game-Changing Islamic Brand

Muslims know a thing or two about branding, after all they already own some of the world’s most well known brands. To Muslims, the brand ‘Islam’ represents a way of life; the ‘ummah’ is a transnational super-community; ‘Halal’ is a global food brand; Ramadan, Hajj, Jihad,and Zakat to name but a few are also all familiar names with their own brand values and brand experiences. All one billion Muslims – and significant chunks of the remaining global population – can identify these brands for you. That is to say, they can tell you the meaning, values and benefits of these ‘products’. A global bra...

IB Insights | December 10, 2013

Designing a Game-Changing Islamic Brand

Designing a Game-Changing Islamic Brand

Muslims know a thing or two about branding, after all they already own some of the world’s most well known brands. To Muslims, the brand ‘Islam’ represents a way of life; the ‘ummah’ is a transnational super-community; ‘Halal’ is a global food brand; Ramadan, Hajj, Jihad,and Zakat to name but a few are also all familiar names with their own brand values and brand experiences. All one billion Muslims – and significant chunks of the remaining global population – can identify these brands for you. That is to say, they can tell you the meaning, values and benefits of these ‘products’. A global bra...

IB Insights | December 10, 2013

Internationalising Islamic Finance: Prospects & Challenges

Not long ago, the Islamic finance industry was seen as a niche market, catering only for a specialised segment within the global banking industry. However, the credit crisis of 2007-08 and the more recent Eurozone debt crisis have catapulted Islamic finance into the mainstream. Today, the industry is worth over US$1 trillion, with market share crossing the critical 25% threshold, in the Gulf Cooperation Council (GCC) countries. But Islamic banking has reached a crucial crossroads. As conventional banks increasingly come under pressure for damaging local businesses and global economies, can Isl...

Shakeeb Saqlain | November 26, 2013

Internationalising Islamic Finance: Prospects & Challenges

Internationalising Islamic Finance: Prospects & Challenges

Not long ago, the Islamic finance industry was seen as a niche market, catering only for a specialised segment within the global banking industry. However, the credit crisis of 2007-08 and the more recent Eurozone debt crisis have catapulted Islamic finance into the mainstream. Today, the industry is worth over US$1 trillion, with market share crossing the critical 25% threshold, in the Gulf Cooperation Council (GCC) countries. But Islamic banking has reached a crucial crossroads. As conventional banks increasingly come under pressure for damaging local businesses and global economies, can Isl...

Shakeeb Saqlain | November 26, 2013

Shariah Governance

Islamic Finance is very much now international in scope and depth. Increasingly this internationalisation is demanding that institutions have the framework for a Shariah compliant process in a much more coherent structured manner. Shariah governance needs to be more aligned to these globalisation trends within Islamic Finance Institutions (IFIs) as well as the general financial industry. There is increasing demand for and indeed an imperative requirement for proper, transparent and well thought-out Shariah corporate governance strategies.Shariah Governance is not a stationary process but evo...

IB Insights | November 18, 2013

Shariah Governance

Shariah Governance

Islamic Finance is very much now international in scope and depth. Increasingly this internationalisation is demanding that institutions have the framework for a Shariah compliant process in a much more coherent structured manner. Shariah governance needs to be more aligned to these globalisation trends within Islamic Finance Institutions (IFIs) as well as the general financial industry. There is increasing demand for and indeed an imperative requirement for proper, transparent and well thought-out Shariah corporate governance strategies.Shariah Governance is not a stationary process but evo...

IB Insights | November 18, 2013

Islam, Women and Empowerment

Islam gives credence to women, certifying towards them respect, honour, dignity and equality. In the centuries prior to Islam, women were illtreated, looked upon as commodities and were given very little or any value at all. The status of women in Islam can only really be appreciated when the position of women is examined pre-Islam, known as Jahiliyyah (the period of ignorance). Conversely, the Quran generally speaks about women with high regard, respect and dignity.In the context of the days of ignorance, women through Quranic revelation were uplifted and given a new lea...

IB Insights | October 08, 2013

Islam, Women and Empowerment

Islam, Women and Empowerment

Islam gives credence to women, certifying towards them respect, honour, dignity and equality. In the centuries prior to Islam, women were illtreated, looked upon as commodities and were given very little or any value at all. The status of women in Islam can only really be appreciated when the position of women is examined pre-Islam, known as Jahiliyyah (the period of ignorance). Conversely, the Quran generally speaks about women with high regard, respect and dignity.In the context of the days of ignorance, women through Quranic revelation were uplifted and given a new lea...

IB Insights | October 08, 2013

Islamic Finance: Translating Belief into Practice

Marketing Islamic finance in new markets requires educating its consumers in its products and practices. But in marketing to its potential consumers, the Islamic finance industry has a lot to learn about branding and product offerings from the experiences of the green economy. Although the growth of Islamic finance in regions such as Malaysia and the Middle East has historically been demand driven, its growth in non-Muslim economics such as the UK has been encouraged by both supply and the Government. However, whereas the UK has managed to develop a world-c...

IB Insights | October 08, 2013

Islamic Finance: Translating Belief into Practice

Islamic Finance: Translating Belief into Practice

Marketing Islamic finance in new markets requires educating its consumers in its products and practices. But in marketing to its potential consumers, the Islamic finance industry has a lot to learn about branding and product offerings from the experiences of the green economy. Although the growth of Islamic finance in regions such as Malaysia and the Middle East has historically been demand driven, its growth in non-Muslim economics such as the UK has been encouraged by both supply and the Government. However, whereas the UK has managed to develop a world-c...

IB Insights | October 08, 2013

British Government Policy on Islamic Finance

Despite having an established church, the UK generally maintains separation between church and state which leads to the following policy requirements:a) The same law applies to all citizens, irrespective of their religion.b) The state is not an arbiter on religious issues. For example, it has no interest in determining conflicting claims about what is Shariah compliant.c) The legal enforceability of a contract should not depend on whether it is Shariah compliant.d) Individuals and companies should be entitled to organise any form of business enterprises, provided th...

IB Insights | October 08, 2013

British Government Policy on Islamic Finance

British Government Policy on Islamic Finance

Despite having an established church, the UK generally maintains separation between church and state which leads to the following policy requirements:a) The same law applies to all citizens, irrespective of their religion.b) The state is not an arbiter on religious issues. For example, it has no interest in determining conflicting claims about what is Shariah compliant.c) The legal enforceability of a contract should not depend on whether it is Shariah compliant.d) Individuals and companies should be entitled to organise any form of business enterprises, provided th...

IB Insights | October 08, 2013