Sukuks and not very halal Islamists

The Economist's Pomegranate blog writes about the travails of Egypt's sukuk law, championed by the MB but blocked by al-Azhar in one of the many unintended consequences of the shoddy constitution:

Egypt’s finance minister, Al-Mursi Al-Sayed Hegazy, says sukuk issuance could generate $10 billion a year for the country. That is highly unlikely any time soon, considering the current junk status accorded by ratings agencies to Egypt’s ordinary bond issues. But given the severity of the country’s economic situation, the protracted IMF negotiations over a possible $4.8 billion loan (which Salafists have also attacked despite a proposed interest of only 2%), and growing global demand for Islamic banking, the scholars of Al Azhar might be wise to spare the hair-splitting. Egypt right now needs every piastre of money it can find.

Sukuks are a fine investment vehicle, but I differ on the view that al-Azhar is hair-splitting. The issue al-Azhar has taken up is that sukuks, by their very nature, involved the lender taking as collateral the investment project itself. Azhar opposes their use in state projects (as opposed to private ones) because public goods would risk falling into lenders' hands. Since this is precisely the kind of situation that led to Egypt coming under British overlordship, Azhar's position is not surprising — especially considering that considering the state of Egypt's finances, a default on sukuks is not unlikely. The real problem here is that the Muslim Brothers want to change the terms of sukuks so that such collaterals are avoided in the case of public projects. Except if that's the case, in Sharia terms this is not a sukuk anymore. It's something else. The Brothers cannot have their cake and eat it too, by claiming to implement Sharianomics and then bending these supposedly holy rules.

Whose Sharia is it anyway?

Over the weekend Tahrir Square was home to what liberals here have taken to calling, in anxiety and contempt, a "Kandahar Friday." Islamist groups (but interestingly not the Islamist parties who are currently in government) organized a demonstration calling for the application of Sharia.

As we discuss in our last podcast, the role of Sharia in Egypt's new draft constitution is a polarizing issue. It's also worth noting that the seemingly simple calls to "apply" Sharia are actually anything but, as Sharia is an ideal whose evolving and contested application has encompassed much more than just law over the history of Muslim communities (for a nuanced, engaging, very readable general history of Sharia, see Sadakat Kadri's recent book "Heaven on Earth: A Journey Through Islamic Shari'a.") So the question nowadays should be: which Sharia? as interpreted by whom? as implemented how? 

I did a piece on this last month for The World, which just scatched the surface of this complex issue. Also, don't miss historian Khaled Fahmy's informative polemics against the contemporary Islamist understanding of Sharia, running in El Shorouq newspaper. 

Egypt: The Sharia debate... in 1985

Hosni Mubarak in 1985

Here is a little item from history worth reconsidering in light of the growing Islamist-secularist debate in Egypt over the future constitution and the application of Sharia (referenced in Ursula’s hilarious post yesterday). From a Wikileaks State Dept. cable dated from March 1985, we get a little insight in how the American Embassy in Cairo saw Egyptian politics: a democratizing Mubarak set against retrogade political foes.

¶2. BEGIN SUMMARY. MOMENTUM IS BEGINNING TO BUILD TOWARD A MAY DEBATE IN THE PEOPLES ASSEMBLY ON ISLAMIC SHARIA (KORANIC LAW). IN RECENT DAYS, KEY OPPOSITION FIGURES FUAD SIRAJ AL-DIN (CHAIRMAN OF THE NEW WAFD PARTY) AND OMAR TALMASSANI (GENERAL GUIDE OF THE MUSLIM BROTHERHOOD) APPEARED BEFORE THE ASSEMBLY’S RELIGIOUS AFFAIRS COMMITTEE TO EXPRESS SUPPORT FOR PURGING OF EXISTING LEGISLATION NOT IN ACCORDANCE WITH SHARIA. THE SPEAKER OF THE ASSEMBLY, RIFAAT EL MAHGOUB, WHILE SUPPORTING THE OVERALL OBJECTIVE, LEFT DELIBERATELY VAGUE THE TIMING AND EXTENT OF THE PURGE. THE ADVOCATES DOUBTLESS KNOW THE PROCESS OF IMPLEMENTING “FULL SHARIA” WILL BE PROTRACTED; INDEED, MUBARAK IS PERCEIVED AS UNCOMPROMISING IN OPPOSITION TO “THE FULL IMPLEMENTATION OF SHARIA.” IN ADVANCE OF THE MAY DEBATE PUBLIC DISCUSSION OF, AND MANEUVERING ABOUT, SHARIA ISSUES IS ALREADY UNDERWAY. END SUMMARY.

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