Winds of Change - People, Leaders and Finances

Winds of Change – People, Leaders and Finances

Compiled by the Research Intelligence Unit – www.riunit.com


“The project for a new Middle East was stillborn and is now buried. There is a democratic renaissance sweeping the Arab world that calls for independence, an Arab Palestine, unity, justice and democracy. It cannot be stopped. The political map of the region is being redrawn, but not by the Americans, nor the Israelis. The success of this renaissance is a gift for us all, pointing as it does towards a renewal of the international order along the lines of justice and the defense of human values.” (Hana Abdul Ilah Al Bayaty - member of the Executive Committee of The Brussels Tribunal)

Breaking images

Regional analysts all express similar views of the ‘page having turned’ after 50 years of US-Israeli dominated foreign policy in the Gulf region. Whilst their war machines are still able to inflict serious damage to the region and its people, the willingness to do so may have been dented as a consequence of the 32 day war. Some claim that long and deep-rooted occidental assertions of Arab backwardness that were at the heart of discriminatory policies throughout the colonial and post-colonial era have now finally been broken. Foremost amongst the stereo types are that the Arabs are unable to develop democratic movements due to their tendency towards tribalism, their servitude to their powerful neighbor’s perceived invincibility and the second-class status extended to the people.

According to Bill Noxid (informationclearinghouse.com), what is happening in Lebanon will change, by example, a variety of things in the international environment. The fundamental reason for this is that when Hassan Nasrallah says he cares about the Lebanese people, he means it. This makes him unique as a leader since there are very few leaders that actually care for the people they are supposed to serve and protect. He notes that leaders on this planet aren’t elected; they are “installed” and are there to support the desires of the global corporations at the expense of the individual

By contrast, Hezbollah’s immediate response to the cease-fire was to respond to the urgent needs of the people. Engineers and doctors were immediately dispatched, and registry centers were set up all over the south for people in need of aid. The response was so swift that European aid agency that went in after the cease fire couldn’t find people that had not already been visited by Hezbollah. The aid workers reported that “The people were happy to take the extra supplies but said Hezbollah had already taken care of all of their needs”. Two days after registering, people were called back in and given $12,000 U.S. dollars each, the equivalent of two and a half times the average annual salary. All of this occurred within three days of the end of the bombings. Nasrallah has additionally pledged to not only rebuild their houses, but to build them better ones.

Noxid contrast this with the U.S. response to Katrina. Weeks after the event, the most the U.S. was willing to offer these people was $1,200 in the form of an ‘impossible to get’ debit card for which they have now spent untold millions in tracking down supposed “fraudulent” use of those funds. A year after the event the people are still homeless, the city is still in rubble, and the only thing the US government did for them was to stigmatize them for not being wealthy enough to get out of the way on their own.

It is expected (InshALLAH), that when reconstruction starts in Lebanon, it will be for the people, with their consultation and be completed in due speed in response to the urgency. Again this would show up all the fake excuses and posturing of many of the governments and aid agencies around the world who’s representatives and actors delay and deny the people their basic human rights following natural disasters and war situations.

Pie in the face

The outcome of the conflict has also embarrassed those Gulf regimes that distanced themselves from the resistance group, who have been accused of acting as mere puppets for the major superpower(s). Serious questions have been raised with regards to the gap between many of these government’s and the governed, many of which are un-elected and un-democratic by Western yardsticks.

According to the Encyclopedia Britannica (1946 edition), the yardstick for measuring despotism in any government around the globe may be considered with reference to the criteria of power and respect. Societies in which respect is restricted to the few and denied to others on the basis of class, religion, race or cast are said to be more despotic than those who extend respect to most of their citizens on a non-discriminatory basis. Essentially, most people in society need to be handed a chance of an ‘even break’. Similarly, power is a useful yardstick of a societies standing with respect to democratic principals. If for instance decision making power in restricted to one or a few, then it would indicate the presence of a ‘despotic system’.

According to a statement made by Garrison Keiler, ‘going to church no more makes you a Christian than sleeping in your garage makes you a car.". It would therefore follow that residing at the White House, or working in Parliament or Congress is not sufficient to make a leader a democratic representative of the people. Under current US policy that is perceived as grossly biased both in the Gulf region and the wider world, support for the Arab struggle is set to gain in momentum as it is seen as a struggle against imperialism and aggression.

Financial reforms

Whilst Arab society is transforming with regard to the struggle for freedom and the fight for Palestinian human rights, the regional economies and financial sectors have also been experiencing rapid change. Following the 911 disaster, more and more Arab investors have been repatriating their funds and investments back to the Gulf region. Comparatively sluggish stock markets in Europe have spurred the Arab players to invest in the dynamic and rapidly growing markets of the Gulf region. Interest in Real-estate investments has been exceptionally high with hundreds of millions of dollars having already returned. Meanwhile, the rapidly rising oil prices have added revenue to the oil exporting state’s treasuries and stabilized overseas deposits, balancing the situation to some extent.

According to a leading Swiss bank official, the value of Arab overseas deposits is estimates at around $800 billion. As the velocity of capital flight would affect the Swiss banking sector the most, the Swiss financial institutions have been rushing to introduce measures designed to retain their share of the business. In particular, Islamic banking facilities that are compliant with Islamic laws have been introduced for the valuable Middle Eastern customers.

According to Dr. Mahmood Ahmed, modern banking systems were introduced in the Muslim countries at a time when they were politically and economically at low ebb, in the late 19th century. The main banks in the home countries of the imperial powers established local branches in the capitals of the subject countries and they catered mainly to the import-export requirements of the foreign businesses. The banks were generally confined to the capital cities and the local population remained largely untouched by the banking system. The local trading community avoided the "foreign" banks for both nationalistic as well as religious reasons.

However, as time went on it became difficult to engage in trade and other activities without making use of commercial banks. Even then many confined their involvement to transaction activities such as current accounts and money transfers. Borrowing from the banks and depositing their savings with the bank, were strictly avoided in order to keep away from dealing in interest which is prohibited by religion. With the passage of time, however, and other socio-economic forces demanding more involvement in national economic and financial activities, avoiding the interaction with the banks became impossible according to Dr. Mahmood.

Local banks were established on the same lines as the interest-based foreign banks for want of another system and they began to expand within the country bringing the banking system to more local people. As countries became independent, the need to engage in banking activities became unavoidable and urgent. Governments, businesses and individuals began to transact business with the banks, with or without liking it. This state of affairs drew the attention and concern of Muslim intellectuals and since then the Islamic banking and finance sector in the Middle East and the wider Muslim world has witnessed a re-birth and steady growth. Essentially the Islamic banks and financial institutes have no dealings with interest and only invest in ‘halal business’ that would exclude alcohol, gambling, arms, pornography and pork.

The current trend has prompted the UK government to also embrace the concept and introduce an institutional and regulatory framework that is designed to attract more business in the area. Amongst the list of banks currently offering Islamic Financial services is Lloyds TSB. British finance minister Gordon Brown believes this can help Britain to become the gateway to Islamic finance and trade -- a move favored by the country's Muslim leaders.

Heng Swee Keat, Managing Director, Monetary Authority of Singapore, said Islamic finance, which was once considered as no more than an interesting aspect on the periphery of conventional mainstream finance, has emerged as a major global force, which was echoed by Singapore's ambition to become the centre of Islamic finance for the Asia-Pacific region.

A leading Dubai-based finance expert said Islamic finance has come a long way since its active re-introduction about 25 years ago. Presently, it is estimated that Islamic banks and financial institutions manage some $200 billion of funds all over the world. Although small in terms of the total global assets managed by financial intermediaries, the growth rate is impressive by any standards.

Copyright Reserved (RIU 2006). Prepared exclusively for the Business Standard.