ECONOMY

Critical Review of Academic Articles

Critical Review of Academic Articles

Introduction

This assignment is based on a critical analysis of two economic articles that have been written to critical and core issues of modern day finance. These articles are named as:

“The Moral Economy of Classical Islam: A FiqhiConomic Model” by Salah El-Sheikh, and

“Post-9/11 Perceptions of Islamic Finance” by S. Nazim Ali and Abdur Rahman Syed.

Critique

Islamic Finance is a heterogeneous universe, and the Shariah principles related to economics and finance have long been associated with applying the Islamic principles within the realms of finance. This thought has greatly been reinforced by the first article “The Moral Economy of Classical Islam: A FiqhiConomic Model”, that seems to demonstrate that the world of Islamic finance is characterized by extreme diversity and dynamism. This state of affairs is related to the nature of Islam, a religion where the case is essential and which brings together diverse streams of thought. Thus, while the main ethical principles are universally shared by all players in Islamic finance, the various streams of Islam offer different interpretations, more or less flexible in their practical implementation. Thus, to take just one example, Saudi Arabia is more rigid in applying the ethical standards of Islam that the countries of Southeast Asia (Metawa, Almossawi, 1998, pp. 299-313). But there are fault lines within the different regions. Thus, Iran and Sudan have they completely Islamized financial sector while the Sultanate of Oman has banned Islamic Finance and in Egypt, the University of Al Azhar issued a fatwa that justifies, to some conditions, the use of interest rate, erasing a bit more the differences between conventional finance and Islamic finance. Some rules are gradually relaxed while other orders can be strengthened. This is the operating mechanism of sukuk (the "Islamic bonds"), created in the 1970s in Malaysia, which were, at first, strongly condemned by the Middle East to be subsequently widely adopted by those countries.

In contrast, the purchase of a conventional insurance contract has been accepted in the past in that there was a legal constraint and to ensure that there is still no equivalent Islamic products conventional insurance. With the emergence of takaful companies, more and more Shariah scholars advocate the diversity of the world of Islamic financial products has also been favored by the particular mode of operation of Islamic financial institutions. Since the 1970s, Islamic financial institutions have developed advisory committees (Shariah boards) composed of experts in Islamic law to rule on compliance with Shariah financial products offered. The more or less "Islamic" of a financial mechanism is not established according to specific rules and immutable but is left to the discretion of Shariah scholars. Certainly, there have been some attempts at harmonization and homogenization of the reading of Koranic principles. But for now, these initiatives have remained essentially regional. Islamic finance remains a compartment of finance so-called "ethics", that is to say, a finance who intends to make available to the real economy and serve, in terms of a limited number ...