Islamic Finance in a Global Context: Opportunities and Challenges
AbstractDespite this scope and imprint on the global economy, Islamic finance remains poorly understood at both the theoretical and practical level. Moreover, despite a number of recent optimistic trends, Islamic finance faces several ideological and structural challenges to full integration in the globalized economy. This Article aims to illuminate these challenges and provide a general overview of contemporary Islamic financial theories and practices. The first section concentrates on the size of the world's Muslim population, the size of Muslim economies, and concepts of Islamic finance itself. The second section examines Muslim beliefs related to contemporary corporate finance. The third section looks at the challenges of Islamic finance. Security issues in Islamic finance, with a particular focus on the financial theories of the radical Salafi movement, are an important development and need to be understood clearly in terms of the challenges facing Muslim financial instruments and law. Specifically, we examine the fundamental paradox of the Salafi's particular interpretation of Islamic finance. While Salafi-jihadist writings impose a sort of economic apartheid between Muslims and non-Muslims, their calls for economic jihad against the West (divestiture and boycott) try to exploit the very same interdependence and forces of globalization they decry.