“There is a crisis of understanding that tears at the social fabric of societies around the world. Globalisation has outpaced understanding, creating divisions that plague societies with prejudice, misinformation, hate, and violence. The Coexist Foundation is a non-profit organisation creating understanding across divides. Since 2006, the Coexist Foundation has forged a range of inspiring initiatives to create understanding through education and innovation.” – Coexist Website.
Do we need to expand the “coexist” conversation to include finance and food to better coexist?
Should the financial coexistence be part of the Global Islamic Finance Forum in 2014 in Malaysia?
Interest & Values
To have meaningful dialogue, there needs to be an alignment of interest.
To build bridges, there must be common shared values.
To make it happen, there must be an initial conversation.
Imagine the following scenario:
There is a global finance conference on alternatives to conventional finance and investing in conservative Saudi Arabia or Pakistan, secular US or Australia or multi-ethnic Malaysia. There are seven speakers, and their respective presentations are from their areas of practice, including:
1. Hindu Banking
2. Christian Indexes
3. Buddhist Asset Management
4. Jewish Hedge Funds
5. Islamic Finance
6. Ethical Investing
7. Halal & Kosher
At one level, it’s about financial interfaith dialogue, which is a good beginning in tearing down walls of difference and building bridges of common shared values. Thus, people have more things in common than differences, but, unfortunately, even with the ubiquitous social media connectivity, very little dialogue.
Common Trust
The common starting point for the faithful is, ‘‘In God, We Trust.”
The out-right prohibitions are probably very few, as most areas, linked to the real economy, on financing, investing, and insuring are permissible amongst the faith based movements.
The common prohibitions may include:
1. Compounding interest, which had (and still has) resulted in many jurisdictions having “debtor’s jail.” For example, Albert Einstein is rumoured to have said, “... the most powerful force in the universe is compound interest.” It is assumed people borrow because there is a need, be it for consumption (buy house, car, hospitalisation, vacation, etc.) or production (building products, factories, roads, etc.), and to charge those (especially) in need (and pay a penalty) goes against human values/nature. But, do the faith based financing recognize inflation and time value of money?
2. Areas that may not benefit (or harm) man, society, country and the environment are stated in the holy books, interpreted by scholarly interpretation and generally supported modern day scientific studies. Thus, some of areas may include weapons manufacturing (distinction between offensive and defensive?), alcohol (red wine benefit for heart versus liver problems and loss of ‘control?’), pornography (defined by US Supreme Court Justice Potter Stewart saying, ‘... I know it, when see it.’), gambling (some say the stock and futures market is organised gambling, pointing to ‘flash crashes’ associated with hyper-trading computer programs), and so on. It appears the rules of engagement on prohibitions are similar amongst the faiths and secular, like ethical and atheist, movements. Thus, the prohibitions act as “uniters” amongst the various followers of the movements.
But, is that enough to start the journey of convergence for understanding and appreciating each other?
Hindu Banking for India
If we take examples of countries that have been adamant in maintaining the separation between church/mosque/synagogue/temple and state, and tweak the approach, what would be the outcome? For example, in Hindu-majority India, its regulators have been adamant against Islamic banking, notwithstanding a recent development on authorising a non-banking institution to undertake financing/investing “Islamically”.
[Frankly, speaking, the approach has not been thought through by the cheerleaders of Islamic finance in India. In using the example of Islamic banks in other jurisdictions, like UK’s Islamic Bank of Britain (with questionable performance), is interesting academically, but not persuasive. Furthermore, in going for “highest hanging fruit,” a deposit taking Islamic bank, it’s a non starter for the whole movement. For example, an Islamic VC fund catering to start ups (in ICT) and SME funding, includes halal food companies, it would have shown regulators of success stories and the anti-Shariah movement there is no link to financing extremism.]
Now, what if there was grass-roots level movement for Hindu Banking in India? But, what is that? In 2008, Dow Jones Indexes launched the DJ Dharma Index, and its methodology was based upon Hindu, Jain and Bhuddist principles, as interpreted by the advising respective scholars. Unfortunately, the Index was decommissioned, but the principles are now known.
Thus, if a proposed appeal for Hindu Banking takes off, then Islamic banking should allow be considered. If it is not allowed, then the playing field is transparent and level, hence, expanding the non-banking financial inclusion approach.
Furthermore, the faith based approach may be extended to the food sector. For example, the halal industry in India, which is much larger and has greater global reach than halal industry in rival Pakistan, is a ‘lower hanging fruit’ to aggressively promote than lobbying for a deposit taking Islamic bank.
Christian Banking
G-20 countries like US, Australia, etc., are Christian majority countries, and faith is an important and integral part of their lives. Their faith related work encompasses missionaries, charity, etc., and, recently, there has been increasing chatter about “Christian” investing, a possible prelude to Christian Banking?
For example, in 2010, The Stoxx Europe Christian Index was launched. The press release, stated:
“A committee, which Stoxx says includes representatives of the Vatican, screens shares, which are drawn from the Stoxx Europe 600 Index. It is comprised of 533 European companies that only derive revenues from sources approved ‘according to the values and principles of the Christian religion’. Companies include 'BP, HSBC, Nestlé, Vodafone, Royal Dutch Shell and GlaxoSmithKline are among the companies in the index. Only groups that do not make money from pornography, weapons, tobacco, birth control and gambling are allowed to be listed'."
Islamic banking is a globally recognised phenomenon amongst the faith based movements, but is it time to raise the conversation bar on rebranding? Could the underlying principles and rules of engagement of Islamic banking, participatory finance, become part of universal banking.
Finally, the number of institutions offering Christian, Catholic, Lutheran based investing and the assets under management are small, but the more important point is that it’s an emerging movement. Furthermore, the greed that sparked the financial crisis in 2008, and contributed to Occupy Wall Street movement, has incidentally raised the profile for alternatives like ‘faith based investing.’
Conclusion
Its well known, may not accepted, greed and love of money, and not money itself, is the root of all evil.
But, money may also provide a compass for moral guidance. The monetary moral guidance is the common denominator of the faithful to have meaningful dialogue of mutual understanding over mistrust.
Financial coexist may lay foundation for political coexist. – November 29, 2013.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.
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