Shariah law can be modern [Archives:2008/1133/Opinion]

February 28 2008

By: Dr Terry Lacey
The recent controversy in the United Kingdom when the Archbishop of Canterbury raised the possibility that some aspects of shariah law might be implemented in UK Muslim communities raised cultural and economic issues rather than simply religious questions. Shariah law is not always about backwardness, despite its image in the West.

If shariah banking can be modernized, globalized and in management terms westernized in synergy with a liberal financial system, then why not other aspects of shariah law? Interpretation of shariah law is culturally contextualized in time and space, not universally fixed like concrete.

The liberal Islamic Indonesian scholar Zuhairi Misrawi argues that shariah law is a cultural product because it has been historically constructed and is attached to a specific territorial, geographical and socio political culture. [Jakarta Post 14.02.08].

Last year there were a series of seminars on shariah banking in Indonesia organized with the British Chamber of Commerce. Shariah banking can be very modern. It has Export Credits, Bonds, Mortgages, leasing and profit-sharing, and will doubtless devise environmental credits too.

The profit and loss sharing aspect of shariah banking is the most innovative but the poor can normally only access fixed cost Islamic facilities more similar to Western interest. However Islamic profit & loss sharing instruments in Asia are surprisingly heavily used by non Muslims (in Malaysia).

The big issue in shariah banking policy is the gap between rich and poor. When a modern economically dynamic society like UK absorbs migrants from a culture of rural poverty, with tribal and feudal influences, then economics is driving social change. Shariah banking could make a greater contribution to resolving these problems by extending its more innovative profit sharing concepts to poorer people to reduce marginalization & promote social inclusion.

Maybe the UK should consult more with social workers in Pakistani and Bangladeshi cities who are also coping with urbanization from backward rural areas. The only way out of this will be economic and social change, in UK, and in countries of origin.

Shariah banking should offer part of the way forward without excluding other groups or religions. In Indonesia the trend is towards Islamic windows in conventional banks, based on consumer choice, not to an institutionally separatist muslim banking system. If non Muslim Chinese business people in Malaysia or Indonesia want to use Islamic banking they are welcome to do so, it is open to everybody.

One way to mobilize Islamic banking to help the poor would be to promote more investment in what we might call social capital markets like water supply and power supply, especially New & Renewable Energy. The profit and loss instruments of Islamic finance are the right shape to finance these long term investments where poor people cannot afford the services at the start, but can afford to pay as incomes rise.

Some UK Muslim communities are already resolving family disputes voluntarily with sharia law. Of course all parties should also have the right of recourse to the jurisdiction of UK courts. However, such rights have to be taught, learned and upheld. Politicizing the debate on sharia law and confusing it with extreme criminal punishments which are not agreed with or practiced by most Muslims in the world does not help this process.

We should study the voluntary use of shariah law to resolve family disputes in UK, Canada and elsewhere, parallel to recourse to normal courts, to see if this helps resolve conflicts or hinders social changes.

Most of the same people who react strongly about sharia law in the UK would not be so negative if the modernization of their factory or water supply was partly financed by an Islamic Financing Institution. Nor do they object to shariah law when they eat in a halal restaurant, while they are drinking their laager with their curry. If the Muslims who serve the laager can be broad minded, is it too much to ask of other people ?

Dr. Terry Lacey is a British Muslim with a background in economic and social development in Asia, Africa, the Caribbean Basin, and the Middle East. For further information on modernization in Indonesia the author can be reached at [email protected]