Poor Subramanian Swamy. The prospects of Islamic finance and banking options in India make him nervous as a rain-drenched cat.
He thinks Arab funds will flow like water, endangering India’s financial sovereignty. With Swamy and friends, such paranoid stuff and canards are bread and butter. Without these, they cease to exist. Muslim-bashing is the summon bonum of their existence; Islam a bogey they raise to stay alive. Without this all-important vocation, they are dead and gone.
The JP Morgan Chases, Dow Joneses, Citibanks, Morgan Stanleys and the Stancharts out there however know the exponentially growing Shariah-complaint financial market well and have dabbled in it. Not because of religious requirement. They are in it for the profit. The State Bank of India too offers Shariah compliant products in many Gulf countries. There’s money to be made after all.
But this isn’t about Islam or finance really. This is rather about defending principled Indian liberalism from its sworn enemies.
A vitriolic propagandist, Swamy is one of those right-wing cynics who will have no qualms trampling upon religious liberty.
This is about stopping the misinformation they spread, while reinforcing our own intellectual credentials in battling the neo-CONs — the pun is not intended but incidental.
This is going to be the challenge we will face for a long, long time. Cultural conservatism cannot be allowed to be passed around in the name of political conservatism by near-fraudulent means.
Back to Islamic finance. With at least $500 billion in assets globally managed in accordance with Shariah, or Islamic law, and the sector growing at over 10% a year, according to Standard & Poor’s, Islamic finance isn’t about Islam as much about wealth management for potential investors.
In principle, Islamic finance seeks equitable wealth by banning exploitative financial practices. In practice, it’s about side-stepping paying of interests, gambling on derivatives and excessive risk-taking. Or investing in casinos, pornography and weapons of mass destruction, pornography or pork.
The fundamental requirement of any investment under Islamic finance is to share both reward and risk. So, products are designed in such a way that both profits and losses are equally shared among lenders and borrowers. There cannot be a zero-sum game: one’s profits cannot come from other losses.
Financial institutions love Islamic finance not because of its moral compass but because of something far more basic: its market potential.
HSBC and Citigroup established their global Islamic finance divisions in the 1990s, as did Ernst & Young. Unlike Swamy, they know money isn’t Muslim or Jewish.
Even central banks can’t resist the temptation. London could soon be the hub of Islamic finance in the west. The Japanese and British govts — in an attempt to attract Muslim investors — have announced plans to issue sovereign bonds that conform to Islamic law.
Ford Motor sold its $848-million Aston Martin to Investment Dar, a Kuwait-based Islamic bank, under a Shariah-compliant sale. Why? Because it got a lucrative client. A Shariah-compliant private equity firm based in Bahrain owns Caribou Coffee, America’s second-largest coffee chain, just as Saudi British Bank is part-owned by HSBC and Standard Chartered.
France can’t stand the veil but has changed its tax and legal codes to attract Islamic investors. All leading banks in London have so-called Islamic windows.
Rules have been amended in non-Muslim financial centres, such as London, Singapore and Hong Kong, to facilitate Islamic finance.
A home-purchase plan for the mainstream UK market approved by the UK’s Financial Services Authority has been designed around Islamic finance principles and shows that Islamic finance can inspire sustainable financial products.
The principles of this home purchase plan are the same as those governing Islamic housing schemes in the UK: Risk-sharing, not charging high fees; allowing for part rent, part purchase, sharing equity upside and sharing downside property risks.
Yemen’s Al-Amal bank won accolades of the Consultative Group to Assist the Poor (CGAP), an arm of the World Bank, in 2010 for its innovative Islamic microfinance initiative, a lease-to-purchase arrangement in which borrowers work as salaried employees of the bank they borrow from, while also working on their own plans for which they took the loans.
Islamic financial services need to be seen as an investment product in a broader portfolio bouquet.
The idea is not to foist Islamic finance on the rest of the world economy but to allow a healthy competition between the two. Being a niche product, it cannot, definitionally, supplant conventional banking.
In the context of greedy practices of the sort that led to the 2008 credit crisis, it however merits a closer look.
But more than anything else, it should be there on the table, laid out among many other instruments as an option for Muslims to enhance wealth and the quality of their lives within their religious beliefs.
Global banks are happily offering Islamic finance products and will do so as long as there is a market and demand. Doubting Thomases, such as Swamy, can continue, in the meanwhile, to spread some more scare. That’s how they earn their profits: from hate-mongering.
Greece’s Next Finance Minister? - Wall Street Journal
By Matina Stevis
It’s a tough job, but someone’s got to do it. Here’s three prominent New Democracy figures who are likely to play a role in the Greek finance ministry or hold a separate economics-related portfolio. Not to be premature, of course. New Democracy may have come first in Sunday’s elections, but it hasn’t yet started trying to form a government. We include a fourth profile wildcard: the current finance minister.
NEW DEMOCRACY
Stavros Dimas
Former European Commissioner for the environment (and, prior to that briefly for Social Affairs), party vice president and former foreign minister in the short-lived Papademos government, Mr Dimas is a New Democracy heavyweight. The 71-year-old politician read law and economics at the University of Athens before moving to New York University for his masters. He worked on Wall Street as well as the World Bank. He was deputy economic coordination minister and as trade minister in the late 1970s, but his expertise in the field is not why he’d get the job. His Brussels experience, respect at home and clout abroad could mean he is his party’s best shot at negotiating milder bailout terms with the country’s international creditors, the euro zone and the International Monetary Fund.
Kostis Hadjidakis
A relatively low-key and liberal member of New Democracy, Mr Hadjidakis oversaw the privatization of Olympic Airlines, the highly-indebted national air carrier, as Development minister in 2009. He also served as Transport and Telecommunications minister. Originally from the island of Crete, he spent seven years in Brussels as a member of the European parliament. The 47-year-old is a strong candidate for the Development ministry and his privatization and European experience will play in his favor.
Chrysanthos Lazarides
He has been serving as chief economic advisor to Antonis Samaras, New Democracy’s leader, but he’s a somewhat unconventional figure for the conservative party. He started off as a Communist in his law-school years and participated in the student uprising against the military junta in Greece in 1974. Mr Lazarides is part of Mr Samaras’ very inner circle. He’s worked as a journalist and a financial advisor. While it’s unlikely that he would be chosen as finance minister, he is almost sure to have a role in the running of the economy under a New-Democracy-led government.
TECHNOCRAT
Giorgos Zanias
Mr Zanias is the current finance minister in the Greek caretaker government and is one of the few high-level Greek officials who have been actively involved in managing Greece’s economic demise since Day One in late 2009, as the ranking non-political finance ministry official in the Papandreou government. Mr Zanias is well-known in Brussels and IMF circles as he has been the leading negotiator on the Greek side in technical meetings. He is not unlikely to stay on as a special advisor for a transitional period as his experience will bring welcomed continuity after these elections. He is an economist and has spent most of his career as an academic -at Oxford University inter alia- and a development consultant for the World Bank.
Greece election: pro-bailout party to attempt coalition - BBC News
Antonis Samaras: ''This is a victory for all Europe''
The leader of Greece's pro-bailout New Democracy party, set to win most seats in a general election, says he wants to form a government as soon as possible.
Antonis Samaras said Greeks had voted to stay in the euro, and called for a "national salvation government".
The leader of the anti-bailout Syriza party, Alexis Tsipras, which came a close second, agreed Mr Samaras should be first to try to form a coalition.
Germany said it viewed the result as a decision to "forge ahead" with reform.
With 80% of votes counted, interior ministry projections put New Democracy on 29.9% of the vote (130 seats), Syriza on 26.7% (71) and the socialist Pasok on 12.4% (33).
New Democracy leader Mr Samaras said: "The Greek people voted today to stay on the European course and remain in the eurozone.
"There will be no more adventures. Greece's place in Europe will not be put in doubt."
"The sacrifices of the Greek people will bring the country back to prosperity," he promised.
Analysis
And so this second election in two months, seen as the most important in Greece's modern history, is going to go right down to the wire.
The top two parties - with very different visions of how to deal with the Eurozone crisis - are neck and neck. For New Democracy supporters, who were hoping for a clear win, it will be a nervous few hours.
Their leader Antonis Samaras had portrayed this election as a choice between staying in the euro or going back to the drachma.
But that's not how Syriza and its supporters see it - they believe it's about promoting a different kind of economic policy to help Greece out of a spiral of recession and unemployment.
Syriza supporters gathered at Propilea in front of Athens University began to chant slogans when the first exit poll numbers were revealed.
For now, the politicians are watching and waiting and probably biting their nails. Whoever wins, however narrowly, gets an extra 50 seats in parliament. It could be the decisive difference.
But the winner still needs to put together a coalition government which is strong enough to last - and that may not be so easy.
He also said Greece would "honour its obligations".
The BBC's Mark Lowen in Athens says that suggests Mr Samaras wants to press ahead with spending cuts demanded by the country's international creditors.
European leaders have warned that if a new Greek government rejected the bailout, the country could be forced to abandon the single currency.
While the radical-left Syriza and other smaller parties have opposed the bailout, New Democracy and Pasok said they would keep it in a renegotiated form.
Germany's Finance Minister, Wolfgang Schaeuble, said he viewed the election result as a decision by the Greek people "to forge ahead with the implementation of far-reaching economic and fiscal reforms in the country".
Eurozone finance ministers said in a statement that such reform was "Greece's best guarantee to overcome the current economic and social challenges and for a more prosperous future [for] Greece in the euro area".
They said they expected representatives of the European Commission, the European Central Bank and the International Monetary Fund - the so-called Troika - to return to Athens as soon as there was a Greek government in place.
Germany Foreign Minister Guido Westerwelle suggested Athens might be given more time to comply with its obligations.
"There cannot be substantial changes to the agreements, but I can well imagine talking again about timelines," he said.
Mr Tsipras, the Syriza leader, congratulated Mr Samaras on his apparent victory, and said he had the right to try to form a government.
But he appeared to rule out joining such a coalition, saying Syriza would "not sacrifice our position" of opposition to the austerity programme.
Difficult talksIf the projections from the interior ministry are proved correct, New Democracy should be able to build a majority coalition with the socialist Pasok, benefiting from a rule which gives the leading party 50 extra seats in the 300-seat chamber.
However, coalition talks may not be easy. After a first, inconclusive election six weeks ago, each of the main parties tried but failed to form a coalition government.
The leader of Pasok, Evangelos Venizelos, proposed a broad four-party coalition including New Democracy, Pasok, the Democratic Left and Syriza.
"No decision can be taken without this national unity," he said.
Analysts suggested Mr Venizelos had doubts over the viability of a coalition with a narrow majority.
When his party was in power it suffered numerous defections and rebellions as it tried to impose unpopular austerity measures.
Our correspondent, Mark Lowen, says that with such a strong showing by Syriza, Greece could be in for an autumn of discontent by opponents of the bailout deal.
Four other anti-bailout parties look set to take between 60 and 70 seats. They include the far-right Golden Dawn, which looked set to secure about 7% of the vote.
Sunday's vote is being watched around the world, amid fears that a Greek exit from the euro could spread contagion to other eurozone members and deepen the turmoil in the global economy.
Tough austerity measures were attached to the two international bailouts awarded to Greece, an initial package worth 110bn euros (£89bn; $138bn) in 2010, then a follow-up last year worth 130bn euros.
Polls suggest most Greeks want to be rid of the bailout and its onerous conditions, but want to stay in the euro.
Various European leaders have warned they cannot do both.
Greek bailout: Where the parties stand |
|||
|---|---|---|---|
| Party | Stance on bailout | Share of vote May | |
| Pro-bailout parties | |||
|
New Democracy |
Keep bailout but more time for restructuring and EU help to stimulate growth |
19% |
|
Socialist (Pasok) |
Keep bailout but subject it to a "structured and courageous revision"; implement fiscal adjustment over three years, not two |
13% |
Anti-bailout parties |
|||
|
Syriza |
Cancel bailout, nationalise banks and freeze privatisations, but stay inside eurozone |
17% |
|
Independent Greeks |
Reject bailout but remain in eurozone |
11% |
|
Democratic Left |
Gradually disengage from bailout but stay in eurozone |
6% |
|
Communist (KKE) |
Unilaterally cancel debt, leave the EU and restore Greece's own currency |
9% |
|
Golden Dawn |
Tear up the bailout but not necessarily abandon the euro |
7% |
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Finance expert Martin Lewis secures TV deal - Daily Record
McCain sees new effort to reform campaign finance - MSNBC Firstread
Former presidential hopeful John McCain talks about the impact private donations have on the presidential campaign.
Arizona Sen. John McCain predicted a renewed effort of reform the nation's campaign finance laws as an outgrowth of the unrestrained influx of donations in this year's presidential campaign.
The Supreme Court's 2010 decision in the Citizens United case, which struck down many of the restrictions on political spending and spurred the advent of so-called "super PACs," was one of the worst in modern history, McCain said.
"I think there will be scandals as associated with the worst decision of the Supreme Court in the 21st Century — uninformed, arrogant, naive," McCain said on NBC's "Meet the Press."
"The fact is that the system is broken," he later added. "I predict to you that there will be scandals, and I predict to you that there will be reform again."
McCain has long been an advocate of campaign finance reform; a landmark 2002 campaign finance law bearing his name was the subject of the legal challenge that led to the Citizens United ruling.
That decision did away with many of the limits on the magnitude of political contributions, fueling an inflation in the cost of campaigns, particularly on the federal level. Super PACs like American Crossroads, Restore our Future and Priorities USA Action have been able to spend tens of millions of dollars already on the campaign. They're able to cull their support from a handful of wealthy donors, the size of whose report is sometimes clouded by twin nonprofit groups associated with super PACs, which don't have to disclose their donors.
One of the largest such donors has been Sheldon Adelson, the casino magnate who gave over $10 million to a super PAC in the primary that supported Newt Gingrich for president. Adelson's since pledged at least $10 million to the pro-Romney super PAC, Restore Our Future.
McCain fretted earlier this week that Adelson's contributions would be tantamount to "foreign money" entering the campaign, since Adelson's fortune is built in part by revenues from overseas casinos.
McCain said on Sunday that he's worried about Adelson's influence, but no more so than the influence of organized labor spending or other donors' impact on the campaign.
"Not any more than other people who will give lots of money; not any more than the trade unions, the labor unions have. The whole system's broken, and there's a wash. I don't pick out Mr. Adelson any more than I pick out Mr. Trumka," he said, referring to the AFL-CIO's president.
Lamenting the money chase while chasing money - Philadelphia Daily News
President Obama's voice echoed in the majestic rotunda of the Franklin Institute as he lit into the Republicans with fierce urgency.
"We want to move forward and make sure that elections aren't just about $10 million checks being written by folks who have vested interests in maintaining the status quo," Obama said, to applause. "The other side, they don't have any new ideas. . . . What they do have is, they'll have $500 million worth of negative ads."
In a note of irony common to modern politics, Obama was in the process of raising campaign cash while decrying its corrosive effects. Three events in the Center City science museum raised nearly $2 million Tuesday night for the president's reelection effort and Democratic committees supporting it.
And that was just after three similar events in Baltimore; by Thursday, Obama was at a star-studded gathering of donors in actress Sarah Jessica Parker's Manhattan home. The insurgent candidate of 2008 who promised to change our politics is now outpacing his modern predecessors in the amount of time raising money.
The people standing in front of the president beneath a marble statue of Benjamin Franklin had paid $250 to $2,500 to hear a fired-up stump speech. Meanwhile, in the Fels Planetarium, some 90 people waited for Obama to address them at a $10,000-a-ticket dinner. And earlier, about 15 people who had each pledged to raise or donate $40,000 got to sit at a table and talk privately with the president for 45 minutes.
"I was pleasantly surprised by the level of enthusiasm and the seriousness with which our donor base took this," said lawyer Kenneth M. Jarin, a cochairman of Obama's 2012 finance committee in Pennsylvania, who helped sell tickets. "They know what's at stake. People understand how much money is being spent by the other side, and that our side has to step up."
But all the hard work of Obama supporters in the months leading up to the Philadelphia events, overseen by Comcast executive vice president David L. Cohen, seemed puny the next day - when casino billionaire Sheldon Adelson gave $10 million to Restore Our Future, a "super PAC" helping Republican Mitt Romney.
Court and regulatory decisions in the last few years have led to unprecedented levels of money as corporations and wealthy individuals pledge to spend hundreds of millions, mostly in support of Republican candidates.
The amount of time presidents spend asking for cash has risen sharply in recent decades, according to Brendan Doherty, a political scientist at the Naval Academy and author of The Rise of the President's Permanent Campaign, to be published in July.
Obama has attended more fund-raising events in the second half of his first term than any of the last six presidents - 166 such events through Friday. In two years before Ronald Reagan's 1984 reelection, Reagan attended just three fund-raisers for the Republican National Committee, zero for his own campaign. Bill Clinton, once lionized and derided for his fund-raising prowess, attended 70 campaign-finance events in 1995 and 1996, when he was reelected.
Now, in the wake of the Supreme Court's 2010 Citizens United ruling, the sums flying around are enormous. Adelson and his wife have given $35 million this year, mostly to a super PAC that backed former House Speaker Newt Gingrich's presidential run.
"It's the Wild West, an entirely different dimension," said Larry Makinson, former head of the Center for Responsive Politics, a nonpartisan watchdog group. "The bottom line is, it magnifies the power of the 1 percent who've got all the money."
In a sense, Obama kicked off the latest installment of the political arms race in 2008 when he chose to spurn public financing for his campaign, Makinson said. Obama raised about $750 million and swamped the GOP.
This time, Obama got ahead of Romney, out-raising him $197 million to $87 million by March 31. But Romney's donations have outpaced the Democrats since he sewed up the GOP nomination. And that doesn't count super PACs' funds, where Republicans dominate.
People raising cash for Obama here say it is a little harder than four years ago, when the campaign to elect the first black president felt like a movement; one dinner at Cohen's home that year, for instance, raised $6 million. The weak economy has also hurt.
Still, enough donors are eager and able to write big checks. Among those at the $40,000 event, according to several attendees: Jarin; former State Sen. Connie Williams of Montgomery County; Cohen and his wife, lawyer Rhonda Cohen; developer Ron Rubin; Mark Alderman, a lawyer and cochair of Obama's state fund-raising committee; Joseph and Marie Field, who founded the radio broadcasting giant Entercom; and Richard Horowitz, president of RAF Industries, a Jenkintown private-equity firm.
Businesswoman Marsha Perelman attended the $10,000 dinner. She thinks Obama's approach to government, promising investment in education and other public goods, will be better "in the long run" for business than Romney's promises to slash regulations, government, and taxes.
As is customary, a few reporters were ushered in to record Obama's opening remarks. Then the press was shooed away as the president said he'd take questions.
Perelman, who chairs the Franklin Institute board, said Obama didn't drop any bombshells in the planetarium dinner, but it was still revealing.
"One of the questions asked referred to how difficult it is to get the president's message across," Perelman said. "He made a terrific reference to how hard it is to cut through a news cycle that is a nanosecond long: During the Bay of Pigs, President Kennedy did not announce the invasion until 13 days later. He had time to figure out what happened, and 70 percent of the nation tuned in when he went on television.
"President Obama said that if that happened today, within two minutes somebody would have tweeted about it. And the highest audience he ever gets for a speech, the State of the Union, is 10 percent of the population."
Contact Thomas Fitzgerald
at 215-854-2718, tfitzgerald@phillynews.com or @tomfitzgerald on Twitter. Read his blog, "The Big Tent," at www.philly.com/bigtent.
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