By:Goh Thean Eu
The global financial crisis and recession now affecting major economies could have been avoided if more countries had adopted Islamic-based principles in their financial system.
Analysts and economists blamed the crisis on on lax landing standards, weaknesses in the credit transfer proses as well as investors’ overly optimistic assessment of structured securities.
“ From an islamic perspective, the causes are more fundamental- greed,gharar (risky or hazardous sale), speculation,, governance, fixed interest debt (usury) and financialisation.
“Having said that, if greed can be tempered internally by self-restraint, if mortgage borrowers had been fully informed, if speculation and risky trading is forbidden, if usury is banned and financing is based on concrete assets, if religious principles are written into bank governance, then the conditions that arose might have been avoided and the crisis might not have happened,” Professor Mervyn K. Lewis said.
He was speaking to the press after a public lecture on “An Islamic Econonic Perspective on The Global Financial Crisis” in Kuala Lumpur yesterday.
Lewis is the first visiting scholar for the Securities Commission-University of Malaya Islamic Colaboration, a programme to bring in eminent international scholars who will be attached with University Malaya.
The visiting scholar will deliver a series of lectures, assist in academic research as well as provide consultation on dissertations and thesis by post-graduate students
Lewis said that Malaysia has all th right attributes to become the leading centre for Islamic Finance.
Malaysia has a good financial infrastucture, a full range of banking and insurance system, a good regulatory system, and is well placed with countries with large Muslims populations nearby.
Lewis also said that the country had yet to see the worst of the economic slow down and that how it recovers may depend in the situation in Japan an in China.
On the one hand, China is expected to be one of the countries which recover fastest from the current global
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