Global Financial Crisis: Muslim Lands come to Western Rescue

As the global financial crisis continues to daily take a turn for the worse, Western Capitalist nations are fast running out of options to save their economies from complete meltdown. Whilst the US leads the war on terror against the Global Ummah and is keen to show Islam has no place in the modern world at the same time it has no qualms with Islamic finance to bail it out from its current predicament.


Saudi Arabia and China as well as many Sovereign wealth funds from the Muslims world have invested heavily in the US economy and with markets accumulating losses daily institutions from the Muslim world have gone beyond normal profiteering but to passing lifelines to some of wall streets most recognised titans. In January 2008 Kuwait along with the governments of Singapore and South Korea provided the $21 billion lifeline to Citigroup and Merrill Lynch, two banks that lost fortunes in America’s credit crisis.

The UAE, Kuwait, Qatar and Saudi Arabia have the largest Sovereign wealth funds in the world; their accumulation of oil wealth for the last 30 years has resulted in immense wealth flowing into such countries, which is invested across the world. The Qatar investment authority which manages Qatar’s Oil wealth set up a $1bn partnership with Investcorp to buy mezzanine debt related to US commercial property, which has nose dived during the last year. The fund also poured money into Barclays bank to the tune of £4.5 billion when it fell into trouble.

Dubai’s Sheikh Mohammed bin Rashid Maktum, made a 2.2% stake in the automotive giant DaimlerChrysler AG, which currently in talks to merge with its rival General motors to save itself from falling into bankruptcy.

Without the help of foreign money it is difficult to envisage how the US would ride out the current financial storm that shows no signs of abating. On the other hand the US funds much of its excessive consumption patterns by selling Bonds to foreign nations which China and Japan have accumulated. Without this extension of help the US would be in serious trouble as one of its main sources of income would dry up.

Even without the Islamic system the Muslim world has generally been insulated from the crisis. With the absence of interest and investment only in real assets, such nations have not been drowned by the fall on the financial markets. As such nations do not deal in debt trading and distance themselves from market speculation that takes place in European and American banks they have not seen the meltdown that is being witnessed by the US. Adnan Ahmed Yousif, CEO of the Bahraini-based Albaraka Banking Group and chair of the Union of Arab Banks outlined in an interview with the Middle East’s Asharq Al-Awsat when asked about the global financial crisis: ‘The success of Islamic banking will lead to serious consideration of Islamic economics, which continues to realize numerous achievements, as a viable alternative to the current global economic system which continues to be hit by these crises.’

If this is the achievement of applying just a fraction of the Shariah, imagine the stability and security that the Islamic economic system, established by the Khilafah system will bring. It is now abundantly clear that the Khilafah remains the only viable option for the Muslim world that will utilise the wealth of the Muslim Ummah and invest them in the economy for the development of infrastructure and in order to industrialise. Without the Khilafah Muslim wealth will continue to be squandered.
Source: http://www.financial-crisis.eu/home/featured/global-financial-crisis-muslim-lands-come-to-western-rescue