David Pidcock’s View on the State of Islamic Money, Banking, and Finance.

David Pidcock is a leading member of the Islamic Party of Britain. His views expressed below were provided in a recent exchange of emails. – thg

Having spent the last 32 years searching for the right country and the right “Sharia compliant” government – I can say that they do not exist – being as unlikely to find – indeed – as rare as hen’s teeth.

Pakistan – which was “allegedly” established as an Islamic State has never implemented a Sharia Friendly monetary system in the past 60 years. The Pakistani Economist / Senator Professor Kursheed Ahmed admitted as much in a seminar at the Islamic Foundation at Markfield, entitled THE DEATH OF RIBA/INTEREST : “we have all been cowards in this regard”

In a live show on ARY TV, Ken Palmerton, ask(ed) General Quraishi – a spokesman for the Musharaf/Busharaf government that now that the Sharia Court of Pakistan had issued its Fatwa condemning Interest – in that the banking system of Pakistan must become more “user” than “usurer friendly” – he snorted : “We are not a backward country!”.

Ken and I had already travelled (sic) to Pakistan to give evidence to Justice Taqi Usmani – which included a screening of THE MONEY MASTERS video – which convinced him that a just, workable monetary system could be established in the 20/21st century in any sovereign state regardless of it’s size – be it Large or Small.

Similar resistance is to be found everywhere in the so-called Islamic States/Countries including Saudi Arabia, Sudan, etc, etc, etc. In a seminar at the Bank Feisal, Khartoum, some 10 years ago (I have a 3 hour video of the proceedings) we (the Islamic Party of Britain) addressed the entire banking establishment of the country – including the head of the Central Bank (appointed – we subsequently found out – by the Federal Reserve of New York) which had also appointed Sudan to host the Central Banker’s Conference that same year – Not bad, considering Sudan was already being categorised by the U.S. as being a “terrorist state”.

Attending the meeting was Dr. Hassan Al Turabi – Who Chaired the session – with Ali Al Hajj, Hajj Noor, Dr. Abdul Raheem Hamdi (Minister of Finance and Founder of Al Baraka Bank). We pointed out that the 5 year plan would fail because it was written by a Thatcherite Economist and that the problems for Sudan originated in the fact that their much vaunted Murabaha System was both fraudulent as well as interest bearing – being entirely based on the fractional reserve model.

Dr. Hassan Satti – the head of Al Shamail bank – stood up and confirmed my statement. He said that he had been sent to study Central Banking in London – that what the Sudan had established was in fact – “The Bank of England with an Islamic Tarbush (Hat) on it…and that the system was irredeemable”

Our parting shot was. If the Hudud (cutting of hands) sections of the Sharia Law was to be applied in the Country, then all the bankers in the room would leave minus one or both hands.

Next day people came to our rooms in the hotel admitting that all the money involved in the Murabaha schemes were created through the fractional reserve mechanism

I then gave evidence to the Ullema Council and Murabaha was suspended. I drew their attention to the fact that the suicide rates in the Sudan could be traced to the growth of unrepayable debt compounded by a rate of interest measuring some 76% in real terms.

I quoted Thomas Jefferson’s observations and those of Imam Ali on this issue:

Jefferson said – “The modern theory for the perpetuation of debt, has drenched the earth with blood, and crushed it’s inhabitants under burdens every (sic) accumulating…”

Imam Ali said: “We withstood the weight of the iron, the stone and the lash, but found the hardest thing to endure was the burden of debt..” circa 650.AD

In 2008 in India, on average, 11 farmers commit suicide every week for the same reasons.

As the correct translation of the Lord’s Prayer makes the solution abundantly clear: “Forgive us our Debts (not trespasses) as we forgive our debtors..

Unfortunately – as predicted – just like the Children of Israel before them the Children of Ishmael have produced the Islamic equivalent to the Kosher Pork Chop – the Halal Kinzir.

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9 responses to “David Pidcock’s View on the State of Islamic Money, Banking, and Finance.

  1. “Forgive us our Debts (not trespasses) as we forgive our debtors..”
    Jct: Nice to hear David Pidcock still fighting the good fight. Islamic banking has had no success because it’s Islamic piggy banking which need to find orthodox funds to lend out interest-free whereas the LETS Greendollar interest-free casino banking model creates its own chips and has no such handicap. Is it any wonder the weak sister model gets all the attention while the powerhouse goes ignored?

  2. Pingback: Usury, Interest, and Islamic Banking « Bill Totten's Weblog

  3. Pingback: Usury, Interest, and Islamic Banking « Beyond Money

  4. To Zainab Al-Arabi,
    It is fruitless to address “the world.” There is no such entity that has the powers of discernment. I think it is not so much a matter of bias as it is ignorance. You might try to enlighten people by explaining the principles of sharia and the meaning of “hudud.” Those who are seeking answers and are willing to listen to reason will be edified by it. Seed does not always mature into fruitful growth, but it has no chance at all unless it is properly sown.

  5. If only the world would try to understand the principles of sharia without bias;understanding how there is the option of mercy and forgiveness regarding the aspects of hudud, surely there will be more awareness as to how an Islamic banking system can help them become truly financially independent, eve if they are poor.

  6. Dear Sirs,
    What Musa Pidcock states has been obvious for many of us for along time. The web of interest-based international bankers is so intense in it’s application that no-one manages to escape it’s reach.
    I remember Musa’s proposal to replace “money” with a points system at community level, thus depriving these banks of their fat. People should be brave enough to at least try it once in their lifetime at their own community level.
    His “little red book” is also highly recommended!
    Wa-assalaam

  7. From a none technical point , Its always been a puzzle to me why the poorest amongst us should have to pay more in interest than those that are rich.

    If the rich are so clever why do they consume so much ?

  8. Riba (Arabic: ربا) – according to some, usury or excessive and exploitative charging of interest; while according to others, interest per se – is forbidden by the Qur’an.

    Riba in-effect is part of every trade, someone has a good/service to sell they state a price they want for that good/service, or a barter exchange and if all parties are satisfied the trade takes place.
    What is excessive to some may not be excessive to the other in turms of interest.

    Money in itself whether fiat or commodity money is priced at demand and supply levels; all at which relates to the acceptance of an increase or deacrease in value that has not been made by ones efforts.

    Sharia clerics all have their own interpretation of what is compliant and what is not compliant for Islamic finance, but who needs to comply to a multitude of interpretations, surely any ethical Islamic finance innovation that does not promote debt will be wearth it’s weight in Gold…!

  9. I too have wondered about why Islamic Banking has not taken hold. In thinking about the way Shia works I also discovered the dark side of the interest based economy. Consider the situation of a company requiring capital. ( I have just finished as CEO for a company in that position.) For the first thing, if you have shareholders they will want a return that is larger than the borrowing rate. If you want to borrow from a Bank they will ask for the lending rate. So, apart from giving your customers a GOOD DEAL ( whixh is what it is all about for entrepreneurs) with some left over for yourself, you have to make this extra return as well. This drives the frenetic cut all corners sell like hell business culture which is depleting resources and nature.

    The very existance of this interest alternative means that other routes to getting capital are harder.

    These other routes, known and practiced for thousands of years where the risk of win or lose is shared, and where a GOOD DEAL can be done without interest, are overshadowed.

    In fact, this kind of deal is much more sustainable. People do not want money per se, they want food, shelter, household objects, their washing done, etc. the roundabout way of earning money, putting it in a bank, then paying as a consumer seems to benefit only the money printers and the lenders.

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