Islamic Finance or Financing Islamism?

Islamic Finance in the Service of Extremism

Even if bogus as a discipline, Islamic finance would be of little consequence or concern if it were not organically tied to radical Islam and ultimately to terrorism.  What makes reasons to be concerned particularly acute is the evidence that the current avalanche-like growth in petro-dollar liquidity in the Middle East is likely to continue and even accelerate for the foreseeable future.39 It is thus not unrealistic to be concerned that if allowed to continue unabated,  Islamic finance could not only acquire enough critical mass to start undermining Western capital markets, but is certain to create a massive, legitimate and institutionalized financial and political underpinning to Islamic extremism that has the stated objective of destroying Western civilization.

It is therefore of primary  importance to understand the means and methods through which Islamic finance seeks to serve the extremist agenda.

From the very beginning of Islamic banking in the mid-1970s, shariah finance institutions have aided and abetted militant Islamism. From the first Islamic bank, the Islamic Development Bank (IDB), which transferred hundreds of millions of dollars to HAMAS to support suicide bombing, to the notorious terrorism financier Bank Al-Taqwa and the numerous Islamic banks and charities run by the “Golden Chain” group of Saudi billionaires funding Al-Qaeda and its likes, Islamic finance has been a life-support system for radical Islam worldwide as is well-known and amply documented elsewhere.40

What is not as well known is that even after the vast expansion of the Islamic finance industry in the past decade and large-scale Western involvement , it continues to be run ideologically and organizationally by people and institutions with well-established Islamist credentials and reputation.   Thus, among the influential Islamic entities entitled to issue fatwas on shariah matters and playing a key role in Islamic finance one can find the Fiqh Academy in Jedda, an organ of the Organization of the Islamic Conference (OIC), the European Council for Fatwa and Research and the Fatwa Council of North  America, all of whom have impeccable Wahhabi/Salafist credentials and extremist proclivities. The same is true about a number of newer organizations that have sprung up recently for the purpose of administering and coordinating Islamic financial institutions. These include the General Council of Islamic Banks and Financial Institutions (GCIBFI), the Islamic Financial Services Board (IFSB), the Accounting and Auditing Organization for Islamic Financial Institutions (AAIOFI), the International Organization for Zakat (IOZ) and others.  Many if not most of the individuals involved in leading positions in the management and promotion of Islamic finance are also well known Islamists, such as the chairman of GCIBFI and veteran Islamic financier Saleh Kamel, the secretary general of IOZ, Ajeel Jassem al-Nashami and the well-known radical Islamic scholars Yusuf Qaradawi, Taha Jabir Al- Alwani, Muhammad Taqi Usmani and others.

What is much less well-explored are the various strategies and tactics used by the Islamists to exploit Islamic finance for their purposes.

First and most important, though perhaps not most obvious, is the overriding Islamist objective of gradually legitimizing shariah in the West. The ability to have shariah recognized as legitimate Islamic law by Western governments and publics will be a huge step towards making it acceptable and gradually implementing it in Muslim communities in the West, in family law for instance. This, of course,  is a long-standing objective of  the Islamists dating back to Mawdudi, who aim to create parallel Muslim societies ruled by shariah and progressively decoupled from the secular and democratic mainstream Western society.41