While not many ordinary Western consumers understand the principles of Islamic finance, an increasing number of Western institutions have begun to incorporate its principles into operations in some parts of the world. Islamic finance bans interest, gambling and speculation. Few people know that it also promotes the kind of focus on partnership and productive investment that seems to have been missing from the global boom of the first decade of the 21st century.
While not many ordinary Western consumers understand the principles of Islamic finance, an increasing number of Western institutions have begun to incorporate its principles into operations in some parts of the world.
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Islamic finance bans interest, gambling and speculation. Few people know that it also promotes the kind of focus on partnership and productive investment that seems to have been missing from the global boom of the first decade of the 21st century.
The Islamic financial system could help stabilize the global economy, thanks to its nature:
- Financial assets grow in step with growth in real economic activities.
- Potential for excessive speculation is reduced.
- Social and ethical responsibilities are embedded in the investment activities.
- Maintaining genuine liquidity adds to the stability of the financial service institutions.
- Natural economic growth is sustained.
To understand Islamic finance, it helps to know that the foundation of the Islamic finance is 'good intention' — in Arabic called niah. Niah represents a philosophy of conducting life and business according to Islamic values, but it is not necessarily restricted to Muslims. The justice and fairness embedded in niah can be actually practiced by all.
Article continues: http://www.triplepundit.com/2011/11/islamic-finance-contribute-global-economy/
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