In recent weeks, Republican politics and attempts across America to block the building of mosques have underscored the impact of Islamophobia in American society.

Republican candidates have jumped on a bandwagon, appealing to racist attitudes towards Islam and Muslims as a political wedge to gain electoral votes in the coming November elections. Bogus charges in 2008 that Barack Obama was a Muslim, as if that should discredit him, is an example of an Islamophobia which is still being used as a political strategy today. This form of political hate speech was addressed by Colin Powell in his endorsement of Obama when he asked:

“Is there something wrong with being a Muslim in this country? … I have heard senior members of my own party drop the suggestion, ”He’s a Muslim and he might be associated [with] terrorists.” This is not the way we should be doing it in America.”

Former Speaker of the House Newt Gingrich, desperately seeking to recapture his national Republican leader role, tried this past week to create a bizarre national threat about the implementation of Islamic law, shariah, that doesn’t even exist: “One of the things that I am going to suggest today is a federal law which says no court anywhere in the United States under any circumstance is allowed to consider sharia as a replacement for American law. Period.” Republican Rex Duncan of Oklahoma followed suit, warning there is a “war for the survival of America,” to keep the sharia from creeping into the American court system. In California, a Tea Party Rally in protest of an Islamic Center in Temecula, encouraged protestors to bring their dogs because Muslims hate Jews, Christians, women, and dogs.

Republican politicizing of Islam and Muslims has deep roots from positions taken by their major presidential candidates (John McCain, Mitt Romney, and Rudy Guiliani) to unfounded accusations by members of Congress. In the 2008 presidential campaign, Republican candidate John McCain’s desire to credential himself with the Christian Right, whose votes, he aggressively sought, led him to embrace pastors of megachurches and televangelists with highly divisive views.

McCain received endorsements from Ron Parsley and John Hagee, prominent Christian Zionists. Parsley in his 2005 book Silent No More to warning of a ”war between Islam and Christian civilization.” Parsley decries the ”spiritual desperation” of America’s civil libertarians who advocate the separation of church and state, and identifies Islam as an ”anti-Christ religion” predicated on ”deception.” Muhammad, he writes, ”received revelations from demons and not from the true God.” Parsley says, ”The fact is that America was founded, in part, with the intention of seeing this false religion destroyed. ”Jihad has come to America. If we lose the war to Islamic fascism, it will change the world as we know it. . . . It’s here. . . . They are waiting to respond as terrorist cells against this nation. It is a war between the culture of death and the culture of life, liberty and the pursuit of happiness.” . . . Radical sects, which include about 200 million Islamics, believe they have a command from God to kill Christians and Jews, he said. . . . ”Our crisis is that half of America doesn’t know the war has started,” Hagee said. ”This is a religious war.”

When informed of Hagee’s extreme statements about Islam, McCain initially refused to disassociate himself from this pastor. It was only after the revelation of Hagee’s past anti-Catholic comments, in which he had argued that Adolf Hitler merely built on the work of the ”Roman Church,” which he called ”the Great Whore of Babylon,” that McCain finally severed his ties.

Congresswoman Sue Myrick from NC and Congressman Paul Broun from Georgia charged in an abortive campaign that the American Muslim organization CAIR (Council on American-Islamic Relations) fostered the secret infiltration of Muslim student interns into key national security committees on Capitol Hill.

American Muslims: Myths & Realities

The taint of foreignness and terrorism continues to brushstroke American Muslim as “the other.” But what do major Gallup and Pew polls reveal about American Muslims? They are one of the most diverse communities in the world, representing 68 different countries as well as indigenous African Americans and converts. Over the past few decades, the vast majority of American Muslims have become economically and increasingly politically integrated into mainstream American society. Muslims represent men and women spanning the socioeconomic spectrum: professionals (doctors, lawyers, engineers, and educators), corporate executives, small business owners, or blue-collar workers and laborers. In fact, 70 percent have a job (paid or unpaid) compared to 64 percent of Americans overall. … Muslim women report monthly household incomes more nearly equal to men’s, compared with women and men in other faith groups.

Education is a priority for many Muslims, who, after Jews, are the most educated religious community surveyed in the United States. Forty percent of Muslims have a college degree or more, compared to 29 percent of Americans overall; 31 percent are full-time students as compared to 10 percent in the general population. (See The Future of Islam, pp. 14-15)

Despite their integration as American citizens, their rights of religious freedom and civil liberties are often threatened. Today, opposition to mosque construction, in locations from NYC and Staten Island to Tennessee and California, has become not just a local but a national political issue. Plans to build an Islamic Center near the World Trade Center site have been transformed into a national referendum polarizing political and religious leaders and the media. Right-wing political commentators, politicians, hard-line Christian ministers, bloggers and some families of 9/11 victims have charged that building this Islamic Center is insensitive to 9/11 families (overlooking the fact that innocent Muslims who worked in the WTC were also victims). They characterize this cultural center as a “monument to terrorism.”

Islamophobia threatens the fabric of our American way of life

Efforts to demonize Islam and Muslims have become a political football that now threatens the first amendment rights and freedoms not only of Muslims, but indeed of all Americans. Islamophobia is fast becoming what anti-Semitism is for Judaism and Jews, rooted in hostility and intolerance towards religious and cultural beliefs and a religious or racial group.

Despite the persistent distinction by Presidents George W. Bush and Barack Obama between the acts of terrorists and the faith of the vast majority of Muslims, what we are witnessing today is the tip of an iceberg formed post 9/11. Far right political and religious leaders and media commentators whose hate speech, like Ann Coulter’s comment:

“We should invade their countries, kill their leaders and convert them to Christianity” would never appear in mainstream broadcast or print media about Jews, Christians and other established ethnic and racial groups in America.

The barrage of similar tirades, like the ones below, create an atmosphere of fear and hostility that is totally unfounded, given what we know about mainstream Muslims in America.

Michael Savage, host of the The Savage Nation, warned: “I tell you right now – the largest percentage of Americans would like to see a nuclear weapon dropped on a major Arab capital. They don’t even care which one … I think these people need to be forcibly converted to Christianity. It’s the only thing that can probably turn them into human beings.”

Rush Limbaugh, reacting to criticism of the abuse of Iraqi prisoners at Abu Ghraib, commented, “They’re the ones who are sick… They’re the ones who are perverted. They are the ones who are dangerous. They are the ones who are subhuman.”

Leading figures in the Christian Right were not to be outdone. Franklin Graham stated, “The God of Islam is not the same God of the Christian or the Judeo-Christian faith. It is a different God, and I believe a very evil and a very wicked religion.” On Fox News’ Hannity & Colmes, Pat Robertson warned, “This man [Muhammad] was an absolute wild-eyed fanatic. He was a robber and a brigand. And to say that these terrorists distort Islam, they’re carrying out Islam…I mean, this man was a killer. And to think that this is a peaceful religion is fraudulent.”

Impact and Implications of Islamophobia 

Across America, Islamophobic hate speech and political grandstanding have painted all Muslims negatively, creating deep negative impressions among those who do not know Muslims personally. Major polling by Gallup and PEW shows that significant numbers of respondents question the loyalty of Muslim citizens and would approve policies that profile Muslims or require them to carry special identity cards. Hate speech has precipitated violent crimes against Muslims, Sikhs and other minorities of Asian and Middle Eastern descent who “look Muslim.” It has led to indiscriminate accusations against mainstream Muslim institutions (mosques, civil rights groups, political action committees, charities). Concerns for domestic security have unfortunately led to the abuse of anti-terrorism legislation, indiscriminate arrests and imprisonments of Muslims that compromise all of our civil liberties. The net result is a growing climate of suspicion and distrust.

Where Do We Go From Here?

The social cancer of Islamophobia must be recognized as unacceptable as anti-Semitism. It is a threat to the very fabric of our democratic pluralistic way of life, one that tests the mettle of our democratic principles and values. Political and religious leaders, commentators and experts must do more to counter hate speech; they must lead in safeguarding and strengthening religious pluralism and mutual respect. They must walk the fine line between distinguishing the faith of mainstream Muslims from the violence terrorists justify in the name of Islam. Blurring this distinction plays into the hands of preachers of hate (Muslim and non-Muslim, religious and political) whose rhetoric incites and demonizes, alienates and marginalizes and leads to the adoption of domestic and policies that undermine the civil liberties of Muslims and non-Muslims alike.

By John Esposito  |  August 3, 2010; 4:26 PM ET 

– 
Ahmad Eldridge Cleaver

The beginning of wisdom is the fear of God.

“There are three things which cause destruction and three things which lead to salvation. The three things which cause destruction are miserliness which is obeyed, passion which is followed and self conceit. The three things which lead to salvation are fear of Allah  in secret and in the open, moderation when rich or when poor, and justice when angry or pleased”

Commentary:

Destruction and salvation are not really based on material success or political favor. Establishing balance in all circumstances and being aware of the power of emotions and desires can give a person clear vision and a powerful insight into the trials of this life. Putting Almighty Allah(swt) in front of all decisions and actions, whether in secret or in the open develops a new approach to life.

The resulting consciousness can lead to the pleasure of Allah(swt), MostHigh. This is the supreme achievement and the essence of success in this world and the hereafter.

(Related in Al Bazaar and Al Bayhaqi and others – authentic – Hasan).

Before setting the record straight, I feel it is vitally important to recognize that many people may have understandably felt threatened or hurt by this swirling controversy. As an African American who grew up during America’s civil rights era and whose ancestry includes people from the Mohawk nation, I’ve certainly felt threatened and fearful by hateful talk directed toward me. It pains me to know that people from various walks of life have been hurt by something I’ve said. To all those people who have felt imperiled by what they have seen or heard I would like to offer my sincere apologies. As you will hopefully see, this is not an accurate depiction of who I am as a human being nor of the religion that I have chosen as my way of life.

On a recent visit to London, protestors denounced me as a “hate cleric” and numerous attempts were made to keep  me from my speaking engagements.   I learned that the protests were instigated by a group called OutRage!  Based on what I have learned, this group has been accused of anti-Semitism and has a history of aggressively attacking religious leaders including the Archbishop of Canterbury (see: http://en.wikipedia.org/wiki/OutRage! and http://rosecottage.me.uk/OutRage-archives/carey98.htm). The group spent a great deal of time pouring over many years of my audio lectures and carefully selecting quotes that misrepresent me as homophobic and intolerant of Christians and Jews.

I have never been the target of protests and this attack left me unsure about how to deal with the situation. As I deliberated the controversy spread to Sweden. I realize now that I should have confronted my detractors immediately. I want to take this opportunity today to tell you exactly who I am.

My Track Record

I have been an Imam in Jamaica, Los Angeles, Toronto, and, Capetown.

Over the last three decades, I’ve visited over 58 countries in the east and west and spoken to tens of thousands of people. I’ve spoken at universities, stadiums, mosques, churches, TV programs and public squares. My audiences have included Muslims, non-Muslims, academics, laypersons, artists, political and religious leaders. By the Grace of Almighty God, I can say that people appreciated my talks wherever I travelled.

I have always stood against racism and ethnocentrism.  I have been a lifelong advocate of women’s rights and for decades have encouraged the empowerment of young people. I pioneered the first social service agency for Muslims in Toronto, Canada whose doors were open to all – rich and poor, Muslim and non-Muslim, gay or straight. As a counselor I learned first-hand of the terrible violence inflicted upon gay people by bullies and thugs and I publicly spoke out against it.

While I was in Toronto I was the first Imam to have inclusive sermons for the hearing impaired.  For years I was a regular columnist on religion for Canada’s largest newspaper, The Toronto Star.  I have also been an advisor to highly respected public institutions such as the Royal Ontario Museum and the Toronto District School Board.

For the last 10 years I have worked with some of the most impoverished citizens of South Africa providing education, spiritual counseling and vocational opportunities for people living in the African townships.

Some of my closest blood relations are Christian and many well-wishers, colleagues and friends are of the Jewish faith. In no country where I have lived or any of the countries that I have visited has there ever been any confrontation between me and another faith community. It’s possible that those who have sought to malign my reputation may have missed all these things in doing their research. Or maybe furthering their own agenda at the cost of my name was a stronger incentive for them than speaking the truth.

The Allegations

With regard to my comments about the punishment for homosexuality, about 15 years ago I was approached by a group of gay Muslims who wanted me to re-interpret the basic principles of Islam. I refused and indicated to them the very serious condemnation  in Islam toward homosexuality.  My statements were a moral reprimand only. I understand now that they did give off the wrong impression. For that, I am sorry. I have never advocated violence, vigilantism or disregard for the rule of law.
Islamic scholarship is crystal clear that Muslim minorities must respect the laws of the countries in which they reside or leave to find another homeland. The overwhelming majority of Muslims living in the West are respectful of this fact and feel duty-bound to recognize the rights of others even if their views are contrary to what Islam holds as sacred.

The debate among those who support homosexuality and those who do not is an intensely polarizing one. Nevertheless, I think that this debate is essential and must continue for the common good of us all. I have always articulated my concern, both within my community and without, in a manner that has been respectful of the rights and duties of individuals in a pluralistic democracy.

A clip taken from another lecture made me appear to be intolerant of Christians and Jews. Toward the end of my talk I made a supplication for God to purify Islam’s third holiest shrine from the “filth of the Christians and the Jews.”  The implicit — and obvious understanding for anyone who heard my lecture — was that I was asking God to heal the spiritual corruption that afflicts some members of religious groups which in turn leads to injustice against innocent people. Spiritual purity has been the focus of prophets, teachers and reformers for thousands of years. Students of the Jewish, Christian and Muslim faiths know this well. Prophet Jesus’ famous condemnation of the Pharisees is even known to many non-religious people. My supplication was not a blanket condemnation of all persons belonging to these two respected faith traditions. Such a statement would be in direct contradiction to Islam’s basic teachings and my own personal beliefs.  Indeed, there are Christians and Jews in Israel and abroad who have been in the forefront of speaking out against racism, violence and Islamophobia.  Their valour and commitment has earned my deepest respect.

No society is without disagreements. However, those disagreements should not be magnified to the point of obscuring the many universal principles upon which we do agree. This is the challenge for any society that sees all its citizens as equal. We share public space but not always opinions and ideas.  We will disagree, but we must continue to live together.  And we must strive to do that in peace.

May the peace and mercy of God be with you.

Respectfully yours,
Dr. Abdullah Hakim Quick

Abdullah Hakim Quick

This lecture series takes a look at the history of Islam, it’s spread from the times of the Prophet Muhammad(saw) and it’s influence on the rest of the world.

Verily, I have been sent to complete the best in character.” (Al- Muwatta)*

Commentary:

The essence of the Islamic message begins with the character of the individual. This has a profound effect on all actions. The first Islamic state has to be developed inside of the person and then in the external world.  If we are not able to establish Islam within ourselves, then how can we establish Sharee‘ah in the land. If we are not prepared to suffer through a “Makkan Period”, then how can we expect the fruits and responsibilities of a  “Madinan Period?”
This was the real message of the Prophet Muhammad (saw). Begin with the source, the internal Muslim.  Beautify the person and reflect the Creator in all that we do. This is the beginning of real change, “the complete revolution” that does not stop with economics while
neglecting the individual.  Islam deals with all aspects of life and all spheres of existence.

*This Hadeeth found in Al-Muwatta in the’”Kitaab husn-ul-khuluq”, # 8. It is also supported by  narrations of Aboo Hurayrah and others. It was authenticated by Ibn ‘Abd al Barr.

All praises to Allah, Lord of the worlds. He who revealed in His Glorious Qur’an, “O you who believe, fasting is prescribed for you as it was prescribed for those who came before you that you may keep your duty to your Lord (having taqwa),“ (2:185). And may blessings and peace of Allah be upon His last Messenger Muhammad ibn Abdullah, forever.

O you who believe, Ramadan is a sacred month wherein Almighty Allah is constantly testing His creation and giving humanity the opportunity to achieve infinite, endless Bliss. Fasting is a complete purification and a means to developing the consciousness of Allah’s presence. The consciousness of Allah (Taqwa) is a protection against the schemes of Shaitan, and the suffering of this world. Allah has informed us that, “Whoever keeps his duty to Allah (has taqwa), He ordains a way out for him and gives him sustenance from where he imagines not. And whoever trusts in Allah, He is sufficient for him. Surely Allah attains His purpose. Allah has appointed a measure for everything.” (65:2)

Many Muslims today have a misconception about fasting and the activities of a fasting person. They go into a state of semi-hibernation, spending most of their daylight hours in bed. If they fear Allah, they wake up for prayer, but then return to sleep immediately. This unnatural sleep makes them become lazy, dull-witted and often cranky.

Ramadan is actually a time of increased activity wherein the believer, now lightened of the burdens of constant eating and drinking, should be more willing to strive and struggle for Allah. The Prophet, sallallahu `alaihi wa sallam, passed through approximately nine Ramadans after the Hijrah. They were filled with decisive events and left us a shining example of sacrifice and submission to Allah.

In the first year after the Hijrah, the Prophet, sallallahu `alaihi wa sallam, sent Hamza ibn Abdul Muttalib with thirty Muslim riders to Saif al Bahr to investigate three hundred riders from Quraish who had camped suspiciously in that area. The Muslims were about to engage the disbelievers, but they were separated by Majdy ibn Umar al-Juhany. The Hypocrites of Madinah, hoping to oppose the unity of the Muslims, built their own masjid (called Masjid ad-Dirar). The Prophet, sallallahu `alaihi wa sallam, ordered this masjid to be destroyed in Ramadan.

On the seventeenth of Ramadan, 2 A.H., Almighty Allah separated truth from falsehood at the Great Battle of Badr. The Prophet, sallallahu `alaihi wa sallam, and 313 of his companions set out to intercept a caravan of their own goods that had been left in Makkah. It was led by Abu Sufyan himself, and estimated at 50,000 dinars. They were met, instead, by a well-equipped army of the nobility of Quraish, intend on putting out the light of Islam. Despite being outnumbered three to one and appearing weak and unseasoned, the Muslims defended their faith with a burning desire to protect the Prophet and meet their Lord through martyrdom. Allah gave them a decisive victory on this day of Ramadan, that would never be forgotten.

In 6 A.H., Zaid ibn Haritha was sent to Wadi al-Qura at the head of a detachment to confront Fatimah bint Rabiah, the queen of that area. Fatimah had previously attacked a caravan led by Zaid and had succeeded in plundering its wealth. She was known to be the most protected woman in Arabia, as she hung fifty swords of her close relatives in her home. Fatimah was equally renowned for showing open hostility to Islam. She was killed in a battle against these Muslims in the month of Ramadan.

By Ramadan of 8 A.H., the treaty of Hudaibiyya had been broken and the Muslim armies had engaged the Byzantines in the North. Muhammad, sallallahu `alaihi wa sallam, felt the need to strike a fatal blow to disbelief in the Arabian Peninsula and conquer the city of Mecca. Allah has declared His Sanctuary a place of peace, security and religious sanctity. Now the time had come to purify the Ka`bah of nakedness and abomination. The Prophet, sallallahu `alaihi wa sallam set out with an army having more armed men than al-Madinah had ever seen before. People were swelling the army’s ranks as it moved toward Makkah. The determination of the believers, guided by the Will of Allah, became so awesome that the city of Makkah was conquered without a battle, on 20 Ramadan. This was one of the most important dates in Islamic history for after it, Islam was firmly entrenched in the Arabian Peninsula. During the same month and year, after smashing the idols of Makkah, detachments were sent to the other major centers of polytheism and al-Lat, Manat and Suwa, some of the greatest idols of Arabia, were destroyed.

Such was the month of Ramadan in the time of the Prophet, sallallahu `alaihi wa sallam. It was a time of purification, enjoining the good, forbidding the evil, and striving hard with one’s life and wealth. After the death of the Prophet, sallallahu `alaihi wa sallam, Muslims carried on this tradition and Allah used the true believers to affect the course of history. Ramadan continued to be a time of great trials and crucial events.

Ninety-two years after the Hijrah, Islam had spread across North Africa, Iran, Afghanistan, Yemen and Syria. Spain was under the tyrannical rule of King Roderic of the Visigoths. Roderic had forced his six millions serfs and persecuted Jews to seek the aid of the Muslims of North Africa in order to be delivered. Musa ibn Nusair, the Umayyad governor of North Africa, responded by sending his courageous general Tariq ibn Ziyad at the head of 12,000 Berber and Arab troops. In Ramadan of that year, they were confronted with a combined Visigoth army of 90,000 Christians led by Roderic himself, who was seated on a throne of ivory, silver, and precious gems and drawn by white mules. After burning his boats, Tariq preached to the Muslims warning them that victory and Paradise lay ahead of them and defeat and the sea lay to the rear. They burst forth with great enthusiasm and Allah manifested a clear victory over the forces of disbelief. Not only was Roderic killed and his forces completely annihilated, but also Tariq and Musa succeeded in liberating the whole of Spain, Sicily and parts of France. This was the beginning of the Golden Age of Al-Andalus where Muslims ruled for over 700 years.

In the year 582 A.H., Salahuddin Al-Ayyubi, after battling with the Crusaders for years, finally drove them out of Syria and the whole of their occupied lands in the month of Ramadan. The Muslim world was then destined to meet one of its most frightening challenges.

In the seventh century A.H. the Mongols were sweeping across Asia destroying everything that lay in their path. Genghis Khan called himself “the scourge of God sent to punish humanity for their sins”. In 617 A.H., Samarkand, Ray and Hamdan were put to the sword causing more than 700,000 people to be killed or made captive. In 656 A.H., Hulagu, the grandson of Genghis Khan, continued this destruction. Even Baghdad, the leading city of the Muslim world, was sacked. Some estimates say that as many as 1,800,000 Muslims were killed in this awesome carnage. The Christians were asked to eat pork and drink wine openly while the surviving Muslims were forced to participate in drinking bouts. Wine was sprinkled in the masjids and no Azan (call to prayer) was allowed. In the wake of such a horrible disaster and with the threat of the whole Muslim world and then Europe being subjected to the same fate, Allah raised up from the Mamluks of Egypt, Saifuddin Qutz, who united the Muslim army and met the Mongols at Ain Jalut on 25th of Ramadan, 658 A.H. Although they were under great pressure, the Muslims with the help of Allah, cunning strategy and unflinching bravery crushed the Mongol army and reversed this tidal wave of horror. The whole of the civilized world sighed in relief and stood in awe at the remarkable achievement of these noble sons of Islam.

This was the spirit of Ramadan that enabled our righteous forefathers to face seemingly impossible challenges. It was a time of intense activity, spending the day in the saddle and the night in prayer while calling upon Allah for His mercy and forgiveness.

Today, the Muslim world is faced with drought, military aggression, widespread corruption and tempting materialism. Surely we are in need or believers who can walk in the footsteps of our beloved Prophet, sallallahu `alaihi wa sallam, the illustrious Sahabah, Tariq ibn Ziyad, Qutuz, Salahuddin and the countless heroes of Islam. Surely we are in need of believers who are unafraid of the threats of the disbelievers, yet kind and humble to the believing people; Muslims whose fast is complete and not just a source of hunger and thirst.

May Allah raise up a generation of Muslims who can carry Islam to all corners of the globe to establish justice in a manner that befits our age, and may He give us the strength and the success to lay the proper foundations for them. May Allah make us of those who carry out our Islam during Ramadan and after it, and may He not make us of those who say what they do not do. Surely Allah and His Angels invoke blessings and peace upon our Prophet Muhammad. O you who believe, send blessings and peace to him forever.

An-Nu‘maan ibn Basheer said, I heard the Messenger of Allah
say,

“That which is lawful is clear and that which is prohibited is clear but between them are doubtful matters about which not many people know. So, he who avoids the doubtful matters clears himself in regard to his religion and his honor. But he who falls into doubtful matters falls into that which is prohibited, like the shepherd who pastures around a sanctuary, all but grazing therein. Surely, every king has a sanctuary, and surely Allah’s sanctuary on the earth is His prohibitions. Verily, in the body there is a lump of flesh which, if it is in good repair, all the body will be in good condition; and which, if it is corrupt, the whole body will be
corrupted. Truly, it is the heart.” (Agreed Upon)4

Commentary:

Muslims have been surrounded by doubtful matters in the guise of modern technology and the Twenty-first century lifestyle. People have developed the ability to make that which is unreal seem real and that which is real appear to be unreal. So-called “Democratic”, secular political concepts empower human beings to set rules of law based on their opinions, while ignoring the already ordained divine laws.

Islamic lifestyle and its Divinely based limits will never change. They were set by the Revelation and the Prophetic directives. The great challenge is to stay within these limits and remain relevant to the actual circumstances that we live in. The essence of our differences lie within ourselves. The never-ending dispute about the beginning of fasting in Ramadaan and the establishment of the first day of the following month of Shawwal is a perfect example. The real difference is not astronomical horizons or schools of Jurisprudence.
The difference is in the hearts, Ikhtilaaf-ul-Quloob. May Almighty Allah enable us to purify the essence before we dispute the external.
4 See Al Lu’Lu wal Marjaan fimaa-Tafaqah Alayhi As Shaykhaan (printed by Darul Jeel) Vol.2 pgs 153 &154
Hadeeth # 1028

By Faiza Saleh Ambah
Washington Post Foreign Service
Friday, October 31, 2008

JIDDAH, Saudi Arabia — As big Western financial institutions have teetered one after the other in the crisis of recent weeks, another financial sector is gaining new confidence: Islamic banking.

Proponents of the ancient practice, which looks to sharia law for guidance and bans interest and trading in debt, have been promoting Islamic finance as a cure for the global financial meltdown.

This week, Kuwait’s commerce minister, Ahmad Baqer, was quoted as saying that the global crisis will prompt more countries to use Islamic principles in running their economies. U.S. Deputy Treasury Secretary Robert M. Kimmet, visiting Jiddah, said experts at his agency have been learning the features of Islamic banking.

Though the trillion-dollar Islamic banking industry faces challenges with the slump in real estate and stock prices, advocates say the system has built-in protection from the kind of runaway collapse that has afflicted so many institutions. For one thing, the use of financial instruments such as derivatives, blamed for the downfall of banking, insurance and investment giants, is banned. So is excessive risk-taking.

“The beauty of Islamic banking and the reason it can be used as a replacement for the current market is that you only promise what you own. Islamic banks are not protected if the economy goes down — they suffer — but you don’t lose your shirt,” said Majed al-Refaie, who heads Bahrain-based Unicorn Investment Bank.

The theological underpinning of Islamic banking is scripture that declares that collection of interest is a form of usury, which is banned in Islam. In the modern world, that translates into an attitude toward money that is different from that found in the West: Money cannot just sit and generate more money. To grow, it must be invested in productive enterprises.

“In Islamic finance you cannot make money out of thin air,” said Amr al-Faisal, a board member of Dar al-Mal al-Islami, a holding company that owns several Islamic banks and financial institutions. “Our dealings have to be tied to actual economic activity, like an asset or a service. You cannot make money off of money. You have to have a building that was actually purchased, a service actually rendered, or a good that was actually sold.”

In the Western world, bankers designing investment instruments have to satisfy government regulators. In Islamic banking, there is another group to please — religious regulators called a sharia board. Finance lawyers work closely with Islamic finance scholars, who study and review a product before issuing a fatwa, or ruling, on its compliance with sharia law.

Islamic bankers describe depositors as akin to partners — their money is invested, and they share in the profits or, theoretically, the losses that result. (In interviews, bankers couldn’t recall a case in which depositors actually lost money; this shows that banks put such funds only in very low-risk investments, they said.)

Rather than lend money to a home buyer and collect interest on it, an Islamic bank buys the property and then leases it to the buyer for the duration of the loan. The client pays a set amount each month to the bank, then at the end obtains full ownership. The payments are structured to include the cost of the house, plus a predetermined profit margin for the bank.

Sharia-compliant institutions also cannot invest in alcohol, pornography, weapons, gambling, tobacco or pork.

Computer engineer Tarek al-Bassam said the crisis made him glad that he had chosen an Islamic bank to take his money. His Islamic savings account has made about 4 percent profit, he said. “Usually it’s a very low risk or a very low gain. But I’m happy with it,” Bassam said.

He has also borrowed from an Islamic bank, to buy a building. Even if he’s late in his payments, he said, he will not have to pay cumulative interest or a larger sum than the one agreed upon. But he notes that under this system, it can be harder to get a loan than from a conventional bank. Islamic banks have stricter lending rules and require that their borrowers provide more collateral and have higher income.

Islamic banking has grown by about 15 percent a year since its modern inception in the 1970s, fueled by the Middle East oil boom of that decade. “There was a lot of hostility when we first started out. We were regarded with suspicion, especially by the regulatory authorities. We were an odd fish. Authorities only acquiesced when they saw the huge demand,” said Dar al-Mal al-Islami’s Faisal, who has been in Islamic finance since the late 1970s.

Islamic finance now accounts for about 1 percent of the global market, according to Majid Dawood, chief executive of Yasaar, a Dubai-based sharia financing consultancy…

Islamic finance first sparked interest in the United States in the late 1990s. The Dow Jones Islamic Index was established in 1999, and the Dow Jones Islamic Fund, which invests in sharia-compliant companies, the following year.

But interest cooled after some Islamic banks were accused of financing terrorism in a lawsuit filed by family members of Sept. 11, 2001, victims, and a lot of Persian Gulf money left the United States for Europe.

In 2004, the German state of Saxony-Anhalt issued a 100 million-euro sovereign Islamic bond. That same year, the first Islamic bank opened in Britain, which now has six Islamic financial institutions, including a retail bank.

Although the biggest Islamic banks are in the Persian Gulf — Dubai Islamic Bank, Kuwait Finance House and Saudi Arabia’s al-Rajhi Bank — Malaysia and London are growing as major centers of Islamic banking as well.

Islamic institutions are not immune to ills plaguing other banks, such as corruption charges and bad investments. Differences of interpretation between sharia scholars about what is permissible and what isn’t also create confusion. The sukuk market, which had doubled each year since 2004, growing to a total of about $90 billion in bonds issued, fell 50 percent this year after a Bahrain-based group of Islamic scholars decreed that most of the bonds were not compatible with sharia law.

But as banks turn borrowers away in these times of economic turmoil, Islamic institutions continue to close deals in Europe, the Gulf and the United States, bankers said. “Banks feel safer and more comfortable with us because we put down more money, more equity. We are not allowed to borrow with very little down,” said Tariq Malhance, a former chief financial officer for the city of Chicago who now heads Unicorn Investment Bank’s U.S. office.

And those who have been in Islamic banking for a long time now feel vindicated.

“The current financial collapse is an opportunity. The ugly side of Wall Street is exposed; it’s always been there but covered by a layer of glamour that is now stripped away,” Faisal said. “We are more conservative and sober in our investments. That used to be considered a handicap. Now it’s considered the height of wisdom.”