In this series of articles on IslamicBanker.com, renowned economist Murat Çizakça explores Waqf - one of the greatest institutions in Islamic history and how it can be revitalised. Pious foundations are known in the Islamic world as awqaf, boniyad or habs. Whereas the latter two terms are used primarily in Iran and North Africa respectively, the former is known, with slight variations, in the rest of the Islamic world. The word waqf and its plural form awqaf are derived from the Arabic root verb waqafa, which means causing a thing to stop and stand still. The second meani...

Poverty can grind down countries and people. Almost 15 years on from the Millennium Development Goals (MDGs), the debate rages on, with causes and remedies still surrounded by contention. The question many development economists are asking is: do pro-growth economic policies mean pro-poor? For if the answer is yes, then we can argue that poverty reduction policies should have an economic growth bias and the implications can be far reaching, affecting some of the most vulnerable people in society. To underline the scale of the problem, globally, poverty remains remarkably high, with lit...

A new frontier seems to be opening for the global sukuk market. With conventional investors appetite for African bonds waning, governments in the region are looking at the Sukuk market to diversify their funding base and finance the big infrastructure projects. South Africa recently announced plans to issue its first sukuk, aiming to become only the second non-Muslim country sukuk issuance after the United Kingdom. The move comes as governments are facing an increasingly challenging debt markets. Once the US Federal Reserve announced that it would start tapering it’s quantitativ...

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...

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...

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...

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...

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...

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...

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...