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| January 02, 2009 | Friday | Muharram 04, 1430 |
The slaughter continues
Hardly free and fair
OTHER VOICES - Sri Lankan Press
An overview of Islamic banking
Cuba’s reintegration
ISLAMIC banking signifies banking operations that comply with provisions given in the fundamental Islamic texts. While some of these norms are shared by Islamic and western financial systems, certain norms are exclusive to Islam.
CUBA’S reintegration into Latin America means that the government of Raúl Castro will be celebrating the 50th anniversary of the revolution in a wholly different regional context than the one that prevailed in the 1960s, when this Caribbean island nation was marginalised by practically all of Latin America.
PAKISTANIS stumbled on to 2009 in the dark, with no gas to keep them warm in the winter. Many are lining up at petrol pumps. This is not how a people should enter a new year. The energy shortage is worsening by the day, in fact by the hour. The average duration of rolling power blackouts has more than doubled to 18 hours a day of late, from eight hours in the summer. This is the situation despite the reduction of 6,000 MW in demand from the summer peak of 17,000 MW. Domestic and industrial consumers in Punjab and the NWFP are facing gas supply cuts due to a widening supply-demand gap. Adding insult to injury, the government has raised gas rates but refuses to reduce oil prices in line with the global trend. No wonder, people are protesting in Rawalpindi, Faisalabad and Lahore.
Like all bad things the energy shortage is blamed on the previous government which not only failed to see the oncoming crisis but was also unsuccessful in attracting investment to the power and gas sector for several years. However, the people have every right to ask the incumbent rulers as to what steps they are taking to remedy the situation. Did they see the crisis worsening during the winter? If they didn’t, how could they be any better than their predecessors? If they did, what did they do to augment power and gas supplies? The state, which otherwise has a strong presence in public life, was nowhere to be seen when petrol station owners, expecting a fall in oil prices, stopped buying and supplying fuel to consumers. Now the people are being told that President Asif Zardari has convened a meeting to sort things out. Officials claim that the shortages will be overcome by the end of the current year. But until then, there does not seem to be any light at the end of a very dark tunnel. The problem is aggravated with a lack of visible activity on the part of the government. A sense of helplessness prevails. A decisive remedial step now, however unlikely it may seem under the circumstances, will not only benefit the people, it will give a boost to the government which has drawn flak in recent days over its real or perceived inability to move forward.
The implications of the energy crisis for the economy are huge. The risk of an economic downturn, and consequently of widespread unemployment, will increase if the shortages are allowed to persist for long. That will have serious social and political consequences. It is high time that the government got down to resolving the problem on a fast-track basis rather than appear to wait for the end of 2009.
THE slaughter currently underway in Gaza is likely to continue since Israel has ruled out a truce that is urgently needed to rush in essential supplies to avert a humanitarian disaster. The majority of the nearly 400 killed and 2,000 injured are civilians and include women and children. Even in ‘normal’ times, supplies to Gaza are not regular because in spite of the 2005 ‘disengagement’ Israel has continued to control the Strip’s air, land and sea exits, and routinely blockades it when it so wishes. On Wednesday, Israel rejected a Hamas offer to halt rocket attacks if Tel Aviv agreed to lift the blockade. An Israeli government spokesman announced that caretaker Prime Minister Ehud Olmert thought that the time was not ripe for a truce. One shouldn’t be surprised by Olmert’s rejection of the truce offer because Israel has called its current offensive a part of “an all-out war on Hamas”. Its air force — fourth biggest in the world — has already destroyed Gaza the way it pulverised Beirut in the 2006 blitz; it has called up 9,000 reservists, and tanks are waiting bumper to bumper to invade the territory to not only destroy Hamas and its military and administrative infrastructure but also to kill as many Palestinians as possible.
Three extraordinary features deserve to be noted here. First is the astonishing courage the Palestinians are showing in resisting the onslaught. Given the awesome firepower of the Israeli wehrmacht, anyone made of lesser stuff would have given up long ago. But the Palestinian people derive their strength from the justness of their cause, unlike the racist and genocidal instincts, and the search for lebensraum one might add, that appear to propel Israel’s military machine. Second is the lack of any serious efforts in world capitals to end the Israeli butchery.
The third is the attitude of a large section of the western media which seems to serve as a spokesman for Israel to justify its war crimes. What is going on in Gaza, according to the western media, is “violence” and not Israeli aggression that aims not only to destroy Hamas but sow terror among the Palestinians. On Wednesday a wire agency reported that diplomats had been ‘scrambling’ to ensure peace. But in truth there is no ‘scrambling’, and the US and European capitals seem to agree on a replay of Israels 34-day war on Lebanon in 2006 when the western powers did all they could to block a UN call for peace.
ALTHOUGH women enjoy equal voting rights under the constitution in Pakistan, the fact is that they are not allowed to cast their votes in some areas in the NWFP, Sindh and Balochistan. Here patriarchal traditions are strong and male political expediency holds sway. These negate the principle of free and fair elections. Hence unsurprisingly the Senate’s Functional Committee on Human Rights felt constrained on Wednesday to call for the empowerment of the Election Commission in that context. It would not be surprising if nothing comes out of this exercise. In past elections including the Feb 18 polls and subsequent by-elections, women have been kept away from the polling booths by village jirgas as well as their own families. Irrespective of the position adopted by political parties — they have officially endorsed women’s right to vote — the obscurantist move to bar women voters has enjoyed the tacit support of male politicians of the areas affected. They have found it in their narrow personal interest to control the vote. Keeping women out of the exercise was one way of doing that. Small wonder women politicians from across the board from parties of all hues have protested against this practice.
Women have been denied their electoral rights in other ways as well. Barring them from casting their ballot is only one of them. Flawed voters’ lists, insecure location of polling stations, failure to provide them safety and lack of voter education have also kept women away from the electoral process. The Election Commission can play a positive role in rectifying these flaws. But it is important that political parties also acknowledge the need for women’s political empowerment and contribute their own bit to improving the situation. The visibility of women in politics has certainly been enhanced with the election of 26 women to general seats apart from the 179 who fill the reserved seats. But most of them made it there because of their connections with powerful political families. If women are to be truly empowered political parties must give tickets to female members on the basis of their work in their community at the grass roots level.
Santa late, goodies not enough
The Island
Santa has arrived in this trouble-torn land days after Christmas. He must have come riding a three wheeler — hence the delay –– if his decision to give the trishaw fraternity preferential treatment is any indication. Santa looked different this year. He had dyed hair and a thundering moustache with a saataka around his neck.
The fuel price revision and the economic stimulus package the government unveiled on Tuesday had the trappings of a clever political manoeuvre, which smacked of typical Rajapaksa cunning….
The only way the government could wriggle out of that political imbroglio was to offer something that would benefit a wider section of the population. A reduction in diesel and kerosene prices and a petrol subsidy, it knew, would benefit many more people than a downward revision of the petrol price….
However, the fact remains that the government managed to control damage and upstage the opposition with only a few weeks to go for two crucial PC elections. The UNP was planning to hold a public protest against the government’s refusal to reduce petrol prices when the Cabinet was earlier expected to make a final decision on the SC court order at issue….
Curiously, now that the government which accused the opposition of trying to torpedo the country’s war effort by moving the judiciary against the petrol price to deprive the state of a part of its tax revenue, has reduced diesel, kerosene and furnace oil prices on its own at a massive cost to the public purse, the question is whether the government itself is trying to scuttle the war.
The government ought to admit that it uttered a diabolical lie to mislead the public, when it levelled the aforesaid allegation against the opposition.
The petrol subsidy for three wheeler taxis may look politically wise, given the sheer number of those vehicles. The government’s relief package is certainly welcome but there is much more to be done to help the public who are struggling to make ends meet. — (Dec 01)
In fact, some Islamic banking restrictions are severe enough to render certain western banking practices and transactions absolutely void. Prohibition of riba and gharar are two of the main restrictions imposed by the Quran and the Sunnah. Most of the present-day Islamic scholars agree that riba, which literally means “an excess”, includes both usury and interest. The prohibition of riba is generally considered to be the most important of all Islamic banking principles. Gharar signifies ambiguity, uncertainty, or lack of specificity in the terms of a financial contract.
As riba is prohibited, suppliers of capital become investors instead of creditors. Also, investment can only be made in permitted commodities and activities. For instance, one cannot deal in the import and export of alcohol. Similarly, it is not allowed to invest in a casino.
Based on the above-mentioned principles, there is a variety of Islamic banking instruments and transactions in vogue. Musharaka is a business structure in which the bank not only makes a financial contribution to the enterprise, but may also participate in managing the venture. Profits are shared between the parties according to a pre-determined ratio, and losses are borne by them in proportion to their capital contributions. In terms of classification, this is an equity-based transaction.
In mudaraba, the bank provides the requisite financial resources, but does not participate in managing the enterprise. It is a form of partnership in which one party provides the funds while the other provides expertise and management. Profits are divided among the parties according to a mutually agreed ratio. Financial losses are borne by the investor alone. This is also an equity-based transaction.
Murabaha is an arrangement in which the bank, instead of advancing a loan to the client wishing to purchase certain goods or equipment, purchases the items and sells them to the client at cost plus a declared profit.
In tawarruq, the bank buys an asset and immediately sells it to the client on a deferred payment basis. The client then sells the same to a third party for immediate delivery and payment. Consequently, the client receives a cash amount and has a deferred payment obligation for the marked-up price to the bank. The asset is typically a metal, like copper or platinum.
Ijarah is the leasing or hiring of a physical asset, and it is one of the fastest growing activities of Islamic banks. It must be mentioned that some of the transactions and instruments are not considered to be in conformity with Islamic law by all Muslim scholars. Those opposing these practices do so by pointing out the hidden or concealed elements of riba and gharar in them. For example, actual administrative fee is one thing and interest in the name of administrative fee is another.
In fact, every bank conducting Islamic operations has a committee of Muslim scholars, called the “Sharia committee”, that determines whether a product or practice complies with Islamic law. As there is no set of binding uniform rules, Sharia committees, at times, give conflicting rulings. There can also be a difference between two countries or regions. For instance, in Malaysia, Islamic banking restrictions are interpreted more liberally than in the Gulf.
Another shortcoming confronting Islamic banking is the shortage of qualified professionals. There are not many people who are equally skilled in conventional banking and Islamic law. A person well acquainted with conventional banking can easily understand any Islamic product; however, one cannot develop or market such a product without knowing the rules and logic unique to Islam.
To summarise, lack of uniformity in laws and procedures, and deficiency of skilled professionals are among the main hurdles faced by Islamic banks and their clients. However, the industry is growing — the Arab oil money being one of the main driving forces. This is evident not only from the number of banks established specifically for practising Sharia-compliant finance, but also from the increasing number of western or conventional banks engaging in such operations.
The writer is a graduate of Harvard Law School and specialises in Islamic finance. syed_asad@post.harvard.edu
2008 has been a very productive year for Cuban diplomacy, and the string of successes is expected to continue in 2009, with several Latin American heads of state visiting Havana, including Ecuadorean President Rafael Correa and Argentine President Cristina Fernández in January, followed by their Chilean counterpart Michelle Bachelet in February, and Mexican leader Felipe Calderón on a date to be decided.
Raúl Castro’s choice of Venezuela and Brazil as the destinations of his first official trips as Cuban president, following his appointment in February 2008, is an indication that he is steering his administration down the path of Latin American and Caribbean integration, while continuing with a foreign policy focused on relations with China and Russia, the successor to the Soviet Union.
In Brazil, Cuba was officially admitted as a full member of the Rio Group — a political discussion and coordination forum involving 21 countries of the region — which convened an extraordinary meeting during the first Latin American and Caribbean Summit on Integration and Development, held Dec. 16-17 in the northeastern Brazilian state of Bahia.
Cuba’s admission to the Rio Group and the fact that it was invited to participate in the first regional summit held without US involvement, where it also secured a condemnation of Washington’s nearly five-decade trade embargo on Cuba, strengthens the Cuban government’s stance against a possible reinstatement into the Organisation of American State (OAS).
For some analysts, the next step towards achieving complete regional integration would require dismantling the OAS, which excludes Cuba. On Jan 31, 1962, the OAS’s Eighth Meeting of Consultation of Ministers of Foreign Affairs, held in Punta del Este, Uruguay, passed a resolution excluding Cuba from the Inter-American system due to the island nation’s Marxist-Leninist government and its alignment with the Communist bloc.
The decision was passed with the supporting votes of 14 countries, one negative vote (Cuba), and six abstentions (Argentina, Bolivia, Brazil, Chile, Ecuador and Mexico). Following the suspension from the Washington-based OAS, all the governments of the region, with the sole exception of Mexico, broke off diplomatic relations with Cuba.
According to former Cuban diplomat Carlos Lechuga, Washington secured the votes in favour of excluding Cuba ”through pressure and extortion,” violating both the OAS and United Nations charters. “For much of these past 50 years we’ve been cornered, but we’ve put up a strong defence,” Raúl Castro said during his recent visit to Brazil, in reference to the period of international isolation that began in 1962, as the Cuban Revolution also became a reference point for any leftist movement that chose to take up arms.
Although Cuban authorities deny having played a role as ”exporters of revolution” they have recognised that during the 1960s and 1970s they supported and encouraged armed revolutionary movements that emerged in several countries to fight against their national ”oligarchies” and the United States’ ‘imperial policy’ in the region.
According to researchers, the worst moment in Cuba’s relations with other governments of the region was during the 1962-1975 period. In 1975, the OAS amended a 1964 resolution that forced its member states to suspend diplomatic, trade and consular relations with Cuba.
The biggest row occurred with Mexico, during the presidency of Vicente Fox (2000-2006). But Fox’s successor, Felipe Calderón, ironed out the differences, and diplomatic relations between the two countries are now strong, with both presidents planning official visits for 2009.
Today, Cuba maintains ties with all the countries of Latin America, with the exception of El Salvador and Costa Rica, with which it has only restored consular relations. Since the 1990s, Cuba strengthened its cooperation with Latin America and the Caribbean, especially in the fields of health and education, through literacy programmes, specialised medical assistance, and free training for health professionals.
—IPS News
