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.