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A great business opportunity -- Islamic Banks

Reader comment on item: Islamic Economics: What Does It Mean?

Submitted by Rajeev (United States), Feb 6, 2011 at 02:18

Dear Dr Pipes:

More and more democratic governments are kneeling in front of Islamic cry-babies. In secular and democratic India the high court in a southern state recently allowed the formation of first government supported Islamic bank in spite of objections from the Reserve Bank of India the central Banking authority in India. As politicians sell secular principles for political expediencies, non-muslims are left with fewer and fewer options. While many of us choose to remain inseparably tied to our democratic values, love of freedom, and separation of church and state, we see Islamists steal the agenda and run away with the pot. It is happening in every democratic country of the world. In your 2007 article on Islamic finance and in subsequent updates to it, you correctly identified that Islamic finance is a movement with political agenda and our hands are tied to do anything about it. It is unfortunate but I see a superior business opportunity in this scenario -- non-muslim entrepreneurs should start Islamic banks. This is a good idea for the following reasons: if Islamic finance was indeed good for the customers and owners (share holders), the free economies of the world would already have adopted or invented those ideas. If these ideas are still unadopted, they must be bad for owners and consumers. That means the money that goes into Islamic finance, will earn smaller returns than the money that stays out of it. But still the people who follow the Islamic tag (without evaluating the true merit of an idea) will put their money in this kind of investment. That is where the opportunity is. If someone willingly puts their money in bad investments, someone else can benefit from it. So in a few years we should see an Islamic bank sponsored by the government of Israel, Nepal or China or businessman like Donald Trump. What an idea. But, on the other hand, the Islamic mutual funds on wall street might already be working under this principle. My money will rather stay in the free market.


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