Sharia Money (Episode 2: The Price of Paradise): easy-to-follow documentary on Islamic banking and finance

“Sharia Money (Episode 2: the Price of Paradise)” (2011)

In the wake of the Global Financial Crisis of 2008 and people’s realisation that the global finance industry, dominated by Wall Street, New York City, in the United States and the City of London in the United Kingdom, was a law unto itself (and lawless at that), new interest in alternative forms of banking and finance is spreading across the world. One such alternative form of banking and finance is Islamic banking and finance. This program, the second in a two-part series, looks at Islamic banking as practised by individuals, small traders and businesses and larger companies in three countries: Indonesia, Malaysia and Singapore. It’s scaled to a pragmatic level easy for the general public to follow and though the documentary is dominated by voice-over narration, there are interviews with several people from different walks of life who explain what Islamic banking means to them, why they believe in it or not, what it has done for them and how they believe it benefits them and their families.

Coming across as an extended news or current affairs / travelogue program, the documentary is easy to follow with much attractive  scenery: the skylines of Kuala Lumpur, Jakarta and Singapore feature throughout and the camera takes viewers on little trips through cities and towns with bustling markets, streets crowded with commuters in both Western and Islamic dress and sleek skyscrapers with their plush, neutral-toned furnishings and glass barriers. The program explains what Islamic banking concepts are and money is regarded as a means of exchange bringing together suppliers and consumers of goods and services, and not as an end in itself as a repository of wealth. Speculation in money and the charging of interest are frowned upon: the ultimate aims of Islamic banking are ensuring the equality of actors engaged in a financial transaction and achieving social justice for less fortunate and more vulnerable members of society.

The program goes to some length explaining how shari’a-governed banks and Western banks grapple with the concept of Islamic banking and how it forces them to rethink and change the products and services they offer to customers. The growing demand for shari’a financial products has generated a huge demand for Islamic scholars and researchers who can advise on and check shari’a-compliant products, and has led to universities in the Southeast Asian region offering courses teaching Islamic banking. An example of a large foreign coporation, Nomura Securities, joining a Malaysian financial corporation in a venture to sell aeroplanes using Islamic financing is shown in the program.

Calm in tone, even-handed and sympathetic to the idea of Islamic banking and finance, the program does not say if there are aspects of Islamic banking that can’t compete with Western banking. Since Islamic banking abhors speculation for its own sake, naturally it would be weak on the kinds of financial products developed in the West since 1990, in particular financial derivatives (a type of financial contract in which two parties stipulate the conditions such as dates, notional amounts and values of the underlying variables, hence the name) and semi-prime mortgages carrying large interest rates. On the other hand, Islamic banking favours loans made at fixed rates and partnerships and joint ventures in which the lender and borrower are equals in the financial transactions involved. This would suggest that lenders and borrowers communicate their needs and requirements well to each other and that lenders show a keen and active interest in the business of the borrower and ensuring that it succeeds.

No figures or statistics are given so viewers have little idea of how sophisticated Islamic banking can be and of the large amounts of money that circulate through Islamic banks. One interviewee gives his opinion that Islamic banking is most suitable for small traders and businesses. The impression viewers may get is that however good and ethical Islamic banking might be, the system cannot cater for the supposedly more advanced banking and finance needs of Western corporations. It should be understood though that the so-called “sophistication” and “complexity” of Western-style banking and finance are what got the West into deep economic shit in the first place and that a system of banking which is easy to understand, which treats lenders and borrowers alike as equal partners and which does not countenance exploitation of borrowers and other weak and vulnerable agents should be one the West should follow.

I get the impression that the program, being an SBS TV program, is trying to be all things to all people, not specifically advocating one banking and finance system over another but suggesting the two can co-exist together, in spite of the possibility that one system definitely does look better than the other. That’s called “balance” in the world of contemporary Western news media.

 

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