The Muslim World and the Global Financial Crisis - by Terry Lacey
By the time a new President is elected the United States will be a different country in a different world. There will be no going back and no return to business as usual. What began as the sub-prime housing market crash has become a generalized banking crash, leading to a world financial crisis, and then into a world economic recession. There is no avoiding the impact of this series of financial and economic downturns and the associated stock market crashes and wild currency fluctuations. However for the developing economies of Asia, the Middle East and Latin America, and even for Africa, these changes represent new opportunities as well as short-term problems. These events are symbolic of a changing global balance of power where the United States and Europe have to adjust to the rising economic power of Asia, the Middle East and the BRICs (Brazil, Russia, India, China). This is a crisis of capitalism and even the greatest advocates of the free market are forced to face reality that when capitalism fails it has to be bailed out by the state. It is capitalist when it goes up and socialist when it comes down.
This does not mean, as suggested by the Indonesian Vice President Kalla, that sharia banking can suddenly present the comprehensive alternative to capitalism. The reality is that so far Islamic finance has been very integrated into global capitalist structures, with little emphasis on extending the more radical and unique profit and loss sharing concepts to poorer Muslims in poorer countries.
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