DAR AL HARB - U.S.A. - MASSACHUSETTS: HARVARD BLOVIATES ABOUT THE "FAIRNESS & LACK OF EXPLOITATION" WHEN IT COMES TO ISLAMIC FINANCE

The Global Impact of Islamic Finance
By: by Jin-ah Kim & Ahmad Y. Bassam, Contributing Writers

Posted: 4/23/07"This is a historical event. We haven't ever had any events about Islamic Finance at HBS that I am aware of," said Samuel L. Hayes III (HBS, '61), Jacob Schiff Professor Emeritus. Hayes was a principal contributor to the Harvard Islamic Investment Study and the author of seven books, including Islamic Law and Finance.

Hayes, the first speaker of the panel, explained basic concepts and principles of Islamic Finance to the audience. Islamic Finance refers to a system of finance or banking that is consistent with Islamic law (Shariah) principles. His "Islamic Finance 101" started with the guiding principles of the Prophet Mohammed, the historical founder of Islam: "Be fair with all others," and "one party cannot exploit the misfortune of others."

As a result, usury (the collection and payment of interest), in addition to any forms of speculation trading in financial risk is prohibited because it is considered gambling, which is also forbidden. Hayes pointed out that Islamic finance places emphasis on a philosophy of investing which closely resembles the idea of "socially responsible investing." Islam does not permit the investing in businesses that are considered unlawful (haraam) and contrary to Islamic values such as those related to illicit drugs, weapons, alcohol, pornography and terrorism. Moreover, Islamic law prohibits borrowing money by using collateral and selling account receivables, which are commonly used financial practices by companies. Hayes said that businesses run by Islamic principles pay monetarily for their religious devotions.

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I am surprised that they just don't come out and say that the islamic way of doing business is so much better and more responsible than the "Western" way of doing business...

How much $$$$ have the Saudis' donated to Harvard?!?


Pertinent Links:

1) The Global Impact of Islamic Finance