Capturing the 'Big Picture' of Islamic finance

4.3. Comparative Approach

In addition to historical references comparisons are necessary to incorporate all phenomena that occur in the proper perspective and illustrate useful (parallel) relationships. In the case of Islam especially on Islamic finance, comparisons are

increasingly necessary to dispel the myths generated in the early days of Islam. 78 In economic and financial matters, the Gospel has more than 2000 references on borrowing saving and alms. 79 The Talmud gives detailed instructions on all aspects of business conduct. The legal norm of the Church discusses usury with a very scary picture. Secular finance institutions should not be separated from religious considerations. In the late nineteenth century a German Protestant, Frederic Raiffesen and at the beginning of the XX century a Kana Catholic, Alphonse Desjardins, created mutual saving from moral or religious encouragement (both of

them are not banking experts) to protect poor farmers from moneylenders. 80 At the present time, a considerable amount of social investment is run by religious groups and almost on financial issues ethical issues (which are overwhelmingly colored by religion) are always there. On the same basis non-exclusive religious revival movements are limited to Islam only although this is rarely discussed in a

comparative perspective. 81

4.4. Interdisciplinary Approach

To capture the many aspects of Islamic finance, an interdisciplinary approach is essential. Almost all of the issues raised can be seen from different sides. Viewed from

a purely economic, point of view the usury debate is not such a big deal because something that is equal to interest will be accommodated in a certain way albeit under a different name. However, this issue is very important if considered from a religious point of view. Economists may conclude that there is no such thing as Islamic finance, while for the banking executive of product differentiation it is important to determine the strategy of creating and selling an Islamic product will be

Islamiconomic: Jurnal Ekonomi Islam Vol.8 No.2 Juli - Desember 2017

very different than the conventional product. In line with the above subject from a religious point of view (be it the obedient customer or religious authority) the difference is not so plasticity of secular glasses is not then become unimportant. There are five dimensions of the phenomenon of Islamic banking special namely

management, economy regulation, politics and religion. 82

Conclusion

One of the arguments in this article states that the globaslization of the financial system has provided significant Islamic financial opportunities and there has been a merger between Islamic banking and conventional banking in recent years. When the traditional financial world dominated by interest-based commercial banks, it can potentially cause alarming theological issues. The new world of finance characterized by blurring the differences between commercial banking in other areas of finance, lowering interest income and financial innovation has provided many opportunities to Islamic financial institutions. In fact, Islamic finance has made financial modernization in different parts of the Islamic world.

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Endnotes:

1 This global Qur'anic teaching is in harmony with the dynamic nature of humanity following the changing times. If the majority of the verses of ahkam al-quran are absolute and detailed, human beings necessarily

become bound that will ultimately hamper the development of society. This is the wisdom of the announcement of the verses. See Harun Nasution. 1986. Akal dan Wahyu dalam Islam (Jakarta: UI Press), 29; Adiwarman Karim. 2004. Sejarah Pemikiran Ekonomi Islam (Jakarta: PT.Raja Grafindo Persada), p. 5; J. Michael Taylor (2003), “Islamic Banking The Feasibility of Establishing an Islamic Bank In The United 2 State”, American Business Law Journal, 40 Am. Bus. L. J. 385, (Winter 2003), p. 387. Nima Mersadi Tabari. 2010. “Islamic Finance and The Modern World: The Legal Principles Governing

Islamic Finance in International Trade”, Journal Company Law, Comp. Law. Vol. 31 (8) 2010, p. 249-254. 3 Muhammad Fadel. 2009. “Shari’a: Islamic Law in Contemporary Contex” Edited by Abbas Amanat and

Frank Griffel, Journal of Law and Religion, Vol. XXIV (2009), hal. 102. Lihat juga Faisal. 2011. “Rektrukturiasi Pembiayaan Murabahah Dalam Mendukung Manajemen Resiko Sebagai Implementasi Prudential Principle Pada Bank Syariah di Indonesia”, Jurnal Dinamika Hukum, Vol. 11 No. 3 (September 2011), p. 463-471.

4 Muhammad. 2005. Manajemen Pembiayaan Bank Syariah, (Yoyakarta: Unit Penerbit dan Percetakan AMP YKPN), p. 17.

Islamiconomic: Jurnal Ekonomi Islam Vol.8 No.2 Juli - Desember 2017

5 Abdullah Saed. 2008. Bank Islam dan Bunga, (Yogyakarta: Pustaka Pelajar), p. 138. 6 Samuel Huntington. 1997. The Clash of Civilizations and the Remaking of World Order (New York: Simon

and Schuster Touchstone), p. 211. 7 Hadith extends the notion of gharar to include trade transactions containing uncertainty. Among the

significant hadiths are the following: 1) The Prophet forbade a sale such as throwing a pebble (the sale of a chosen or determined object such as throwing a pebble or rock) and buying and selling gharar. 2) "Do not buy fish that is still at sea, because it is gharar 3). Prophets forbid the sale of fruit that is still not grown 4). Prophets prohibit the buying and selling of anything that is still in the womb, Dairy milk (udder), buying and selling slaves when he goes, and buying and selling 'the results of a diver' (darbat al-gha 'is: buying and selling ahead of the diver's rescue) 5) Whoever buys food, may not sell it Until he has perfect ownership 6) Whoever buys food, should not sell it until he weighs the item.7) The Prophet forbade the sale of grapes until they became black, and the sale of grains to hard . See Frank E. Vogel and Samuel L. Hyaes III. 1998. Islamic Law and Finance: Religion, Risk and Return (The Hague: Kluwer Law International), p. 87-88: Ahmad Maulidizen. 2016. Riba, Gharar dan Moral Ekonomi Islam dalam perspektif sejarah dan komparatif: Satu

sorotan literatur, Jurnal Islamiconomic, Vol 7 (2): p. 141-164. 8

For example, the existence of places of worship, the hours of rest to perform worship for workers and other worship applications. See Ibrahim Warde. 2000. Islamic Finance in the Global Economy (Edinburgh University Press, Edinburgh), p. 59.

9 A complex factor in the classification is that a distinction must be drawn between 'Islamic financial institutions' whose entire product line is Islamic and 'Islamic products', which are increasingly offered by

conventional institutions in addition to their conventional products. 10 In 1994, President of the Institute of Middle Eastern Studies (MESA) Rashid Khalidi in his speech said:

"We as people who research about the Middle East often fail to establish relationships with those who research on other areas, including those who research other areas Whose characteristics and problems are similar to those occurring here, in the Middle East such as in Central Asia, Africa, South Asia and the

Mediterranean. See Ibrahim Warde. 2000. Islamic Finance in the Global Economy, p. 19. 11

Nicholas Dylan Ray. 1995. Arab Islamic Banking and Renewal of Islamic Law (London: Graham dan Trotman), hal. 3 12 Frank E. Vogel and Samuel L. Hayes. 1998. III, Islamic Law and Finance: Religion, Risk and Return (the Hague: Kluwer Law International). p. 45 13 Nicholas Dylan Ray. 1995. Arab Islamic Banking and the Renewal of Islamic Law (London: Graham and 14 Trotman), p. 90-91 As indicated by Ayatollah Khomeini's statement, "this is a Revolution about Islam, not about the price of

melons". Alan Richard and John Waterbury. 1996. A Political Economy of the Middle East (Boulder: Westview Press), p. 351

15 For example comparison with Leonard Binder. 1988. Islamic Liberalism: A Critique of Development Ideologis (The University of Chicago Press); and Oliver Carre. 1993. Islam lique ou le retour a la Grande

Tradition (Paris: Aemand Cloin). 16 Judith Miller. 1996. God Has Ninety-Nine Names: A Reporter’s Journey Through a Militant Middle East

(New York: Simon and Schuster), p. 151. 17 Ronald Jacquard. 1998. Fatwa contre I’Occident (Paris: Albin Michel), p. 157-168.

18 Ibrahim Warde. 1997. Perceptions of Islamic banks among European and American bankers (San Fransisco: IBPC Working Papers).

20 Ibid John Esposito states that when confronted with new interpretations or applications about Islam, they often cast criticism from the point of view of traditional practices and beliefs. On the one hand, Islam is considered

an absolute religion, so Muslims are seen as too reluctant to accept change. On the other hand, when a change occurs, the change is considered unorthodox, opportunistic, the reason for adopting things outside of Islam. 21 See John L. Esposito. 1992. The IslamicThreat: Myth or Reality? (Oxford University Press), p. 205. Sami Zubaida. “Islam Iran an Islamic State?” in Joel Beinin and Jose Stork. 1997. Op. Cit, p. 103.

23 Ibrahim Warde. 1997. Op. Cit, p. 27. Timur Kuran. 1986. “The Economic System in Contemporary Islamic Thought: Interpretation and Assessment”. International Journal of Middle East Studies (18), p. 140.

24 William E. Shepard, “Muhammad Sa’id al-Ashmawi and the Application of the Shari’a in Egypt”. International Journal of Middle East Studies (18).

25 Yahya Sadowski. 1996. “Just a Religion: for the Tablighi Jama’at, Islam is not totalitarian”. Brooking Review Summer (14), p. 3.

Ahmad Maulidizen: Islamic Finance in …

26 Bernard Botiveau and Jocelyne Cesari. 1997. Geopolitique des Islams (Paris: Economica), p. 40-41

28 Bernard Botiveau and Jocelyne Cesari. 1997. Op.Cit. p. 84-90 Oliver Carre. 1993. Op. Cit. P. 58. 29 Ibrahim Warde. 1997. Op. Cit, p. 32 30 As Aziz al-Azmeh says: "Islam is not a generalizable essence, but a unifying, nominal entity, in the name

of Islam, diverse society, culture, history, and politics. See Aziz al-Azmeh. 1993. Op. Cit. p. 1.

31 William E. Shepard. 1987. “Islam and Thelology: Towards a Typology”. International Journal of Middle East Studies (19). p. 307-336.

32 R. Hrair Dekmejian. 1995. Islam in Revolution (Syracuse University Press). p. 57. 33 Sana Abed-Kotob. 1995. “The Accomodationists Speak: Goals and Strategies of the Muslim Brotherhood

of Egypt”. International Journal of Middle East Studies (27). p. 332.

34 Ian S. Lustick. 1998. For the Land and the Lord: Jewish Fundamentalism in Israel (New York: Council on Foreign Relations), p. 4-6.

35 Joel Beinin and Joe Stork, “On the Modernity, Historical Specificity and International Contex of Political Islam”. In Joel Beinin and Joe Stork. 1997. Op. Cit. p. 3.

36 Leonard Binder. 1988. Op. Cit. p. 357. 37 Chibli Mallat. 1993. The Renewal of Islamic Law: Muhammad Baqer as-Sadr, Najaf and the Shi’i International (Cambridge University Press). 38 Sami Zubeida. 1989. Islam, The People and the State: Essays on Political Ideas and Movement in the Middle East (London: Routledge), p. ix.

39 John Esposito. Op.Cit. p. 107; See also Gudrun Kramer, “Islamist Notions of Democracy”. In Joel Beinin and Joe Stork. 1997. Op. Cit. p. 76.

40 Malcolm Kerr. 1966. Islamic Reform: the Political and Legal Theories of Muhammad Abduh and Rasyid Rida (University of California Press).

41 Edward Mortimer concludes that: "The real meaning of fundamentalism if used in the context of Islam will always be out of my imprisonment”. See Edward Mortimer. 1982. Faith and Power: the Politics of Islam

(New York: Random House), hal, 249; On the same occasion, John Esposito notes that fundamentalism "tells us everything, even though at the same time does not say anything”. SeeJohn Esposito. Op.Cit, hal, 7; William Shepard very well summarizes the dilemma experienced by researchers: "On the one hand, such labels often serve as an appeal to the real understanding of a person and his tendencies, in part because they are widely used without explicit definition, as Again because they often put together a variety of different phenomena and partly because they often carry an explanation of implicit or subjective judgments. In my opinion, this is particularly true of the 'fundamentalist' label. On the other hand, We can not avoid labels if we talk about a thing, so obviously we can not begin to make an understanding of an area as large and complex as the modern Muslim world unless we can analyze these diverse phenomena into a number of categories that can be governed by true explanations. See William E. Shepard, Op. Cit, p. 307.

43 Ibrahim Warde. 2000. Op. Cit, p. 38. Nicholas Dylan Ray. 1995. Op. Cit. p. 8. 44 At that time, his harshly recorded criticism of the Shah's regime and all things Western was duplicated throughout Iran. See James A. Bill. 1989. The Eagle and the Lion: the Tragedy of the American Iranian Relations (Yale University Press).

45 In a 'cyberfatwa' entitled 'The Fallacy of the' Islamic Bank ', Umar Ibrahim Vadillo writes that: "The so- called' Islamic bank 'is a riba institution that is contrary to Islam The Islamic bank is an unreasonable attempt

to Resolving, as is done in the cases of Christians, the consistent Islamic opposition to riba for 14 centuries. Since the beginning of its emergence, Islamic banks have been supported and promoted by usury actors. " The author rejects ' riba ' as an invention of Western colonialism designed to incorporate the Muslim world into the international monetary and financial system. He added that "Contrary to the confusion of the modernists, the position of Shariah Islam is clear and does not accept any controversy.From this it is clear that Muslims not only have to leave riba , but also obliged to fight usury" . See

http://eldarco.com/murabit/index.html1#fallacy (April 1997); Ibrahim Warde. 2000. Op. Cit, 40

47 Fazlur Rahman. 1984. Islam and Modernity (University of Chicago Press). John Esposito. 1992. Op.Cit. p. 165. 48 Muhammad Sa’id al-Ashmawi. 1990. L’ Islamisme Contre I’Islam (Paris: La Decouverte). 49 Mohammad Aslam Haneef. 1995. Contemporary Islamic Economic Thought: A Selected Comparative

Analysis (Selangor Malaysia: Ikraq). p. 140. 50 Timur Kuran. 1986. Op. Cit. p. 148

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51

52 Ibid. p. 148 Ahmed Abdel Aziz El-Nagar. 1980. One Hundred Questions & One Hundred Answers Concerning Islamic Banks (Cairo: International Association of Islamic Banks). p. 8.

53 Oliver Roy. 1992. L’echec de I’Islam Politique (Paris: Editions du seuil). p. 10. 54 Clement M. Henry. 1996. The Mediterranean Debt Cresent: Money and Power in Algeria, Egypt, Morocco, Tunisia and Turkey (University Press of Florida). p. 22 55 Oliver Roy. 1992. Op. Cit. p. 176

56

57 Nicholas Dylan Ray. 1995. Op. Cit. p. 5 Frank E. Vogel dan Samuel L. Hyaes III. 1998. Op. Cit. p. 2 58 Fuad al-Omar and Mohamme Abdel-Haq. 1996. Islamic Banking: Theory, Practice and Challeges

(London: Zed Books). p. 25

59 Criticism of such views, lihat Oliver Roy. 1992. p. 7 & 20; Robert Vitalis in Joel Beinin and Jose Stork. 1997. p. 102; and Nazih N. Ayyubi, “State Islam and Communal Plurality”, in Charles E. Butterworth and I.

William Zartman. 1992. Political Islam, The Annuals of the American Academy of Political and Social Science (November). p.87

60 Khoo Boo Teik. 1995. Paradoxes of Mahathirism: An Intellectual Biography of Mahathir Mohammed (Oxford University Press).

61

62 Timur Kuran. 1986. p. 159 Ibid. p. 149 63 Karl Polanyi. 1957. The Great Transformation: the Political and Economic Origins of Our Time (Boston:

Beacon Press). 64 Albert Hirschman. 1977. The Passions and the Interest: Political Arguments for Capitalism Before Its

Triumph (Princeton University Press) 65 Center of Medieval and Renaissance Studies, University of California, Los Angeles. 1977. The Down of

Modern Banking (Yale University Press) 66 Peter Bernstein. 1996. Againts the Gods: the Remarkable Story of Risk (New York: Wiley). p. 2

67 Walter Bagehot. 1962. Lombard Street: A Description of the Money Market (Homewood, III: Richard D. Irvin). p. 7

68 Frank E. Vogel dan Samuel L. Hyaes III. 1998. Op. Cit. p. 38.

69

70 Walter Bagehot. 1962. Op. Cit. p. 28 Peter Bernstein. 1996. Op. Cit. p.32-33. 71 Ibid, p. 34. 72 Muhammed Arkoun, “Islam et modernite”, in Alain Gresh (ed.). 1994. Un peril Islamiste? (Brussels:

Editions Complexe). p. 205-206

73

74 Bernard Lewis. 1993. Islam and the West (Oxford University Press). p. 183 Alain Gresh (ed.). 1994. p. 208 75 Yves Thoraval. 1995. Dictionnaire de civilization musulmane (Paris: Larousse). p. 80 76 Abraham L. Udovitch, “Bankers without Banks: Commerce, Banking and Society in the Islamic World of

the Middle Ages”, in Center of Medieval and Renaissance Studies, University of California, Los Angeles. 1977. p. 259

77 Ibid, p. 260. 78 Concerning the uniqueness of Islam as a comprehensive worldview, John Esposito writes that: "What is

almost forgotten is that all religions of the world based on historicity and origin can be said to be a comprehensive view of life.Although religion to politics varies widely, A view of life with a strong emphasis on community life as well as personal, for example the views of the Torah, the 'straight path' in Islam, the middle way in Buddhism, the 'dharma' (dharma) in Hinduism, Diet, wealth management, life stage (birth,

marriage and death), and rituals of worship”. See John Esposito. 1992. Op.Cit, p. 198. 79

Ibrahim Warde. 2000. p. 56 80 Ibid, p. 57

81 Among the exceptions are The Fundamentalism Project, a multi-volume series book edited by Martin E. Marty and R. Scott Appleby and published by the University of Chicago Press.

82 Ibrahim Warde. 2000. p. 59.