Islamic Finance or Financing Islamism?

Perhaps the greatest damage Islamic finance can do to the West in the long term has to do with the rather innocuous Quranic and shariah mandate for Muslims on almsgiving known as zakat.  The Quran obligates Muslims to donate roughly one-fortieth of their income or 2.5% each year to charity and most practicing Muslims do just that. Such charitable giving is considered a form of shariah-mandated income redistribution and many Muslims believe that it can alleviate poverty and bring about a more just society.

There is, of course, nothing objectionable to charitable giving, but in this case, as in much else to do with shariah the devil is in the detail. And the devil has to do with who has the right to receive zakat and who distributes it.  According to the Quran, there are eight categories of deserving zakat beneficiaries with some of them well-defined and others less so. In the first category are the poor, the needy, the zakat collectors and those that are heavily indebted. The problem arises with the second group which includes categories of recipients of zakat for freeing slaves or helping prisoners and their families, helping needy travelers or foreign students in need of funds and also new Muslims or “those whose hearts need to be reconciled” and those who strive in the way of Allah, as in Dawah (proselytism) or Jihad.  All four of those have been interpreted by various Islamists and prominent Islamic finance functionaries like Dr. Ajeel  Jaseem al-Nashami, secretary general of the International Organization for Zakat  to fall under the category of “financial jihad “(al-Jihad bi-al-Mal).⁴⁶

Financial jihad through zakat, of course, is nothing particularly new and has been carried out for a long time. Zakat committees in Gaza have been a prime transfer mechanism of funds for Hamas, for instance, and the radical jihadist madrassas in Pakistan have been partly funded from zakat for decades. What’s new with Islamic finance is the sheer volume of potential zakat collections and a move afoot to centralize both collections and distribution under one central authority that almost certainly will be controlled by committed Islamists. Every bank offering Islamic products appears required to donate 2.5% of revenue generated from them to zakat and with some 400 banks in 75 countries and a trillion dollars in Islamic financing currently the potential zakat sums are staggering.⁴⁷

Perhaps aware of this potential, Sheikh Saleh Kamel, a Saudi multi-billionaire, owner of the oldest and largest Islamic banking group, Dallah al-Baraka, and an alleged terrorism financier widely considered the kingpin behind international Islamic finance has taken the initiative to centralize worldwide zakat collections and distribution, as well as set up a central fatwa issuing council on Islamic finance.⁴⁸ In this endeavor he has received the strong support of the radical Islamist Sheikh Yusuf Qaradawi and the influential World Forum for Muslim Scholars and several other organizations he controls.⁴⁹

Information available at the time of this writing (September 07) indicates that this plan was approved by the Organization of the Islamic Conference (OIC) and is about to become a reality. Should a centralized Zakat fund of that magnitude controlled by zealous Islamists like Kamel and Qaradawi indeed materialize, financing for the worldwide Islamist movement will become essentially unlimited, legitimate and at least partly funded by the West.

Lenin was once reported to have said that the capitalists would gladly sell us the rope with which we’ll hang them. Were he alive today and observing Islamic finance, he might have added that they would not only sell us the rope, but would also help us raise the money for it and when the time came to hang them, they would find a properly qualified shariah advisor to certify that the hanging is hundred percent shariah-compliant.