Mahfoudh Barouni, an expert in banking and finance, said, “The term ‘Islamic’ should not be used with anything related to the economy.”
According to him, this would affirm that the user of such a word is more Muslim than others. The difference between Islamic and conventional terms in finance stems from doctrine, in the sense that reflection on the mechanisms and structures of operation is simply based on two different perspectives, one of which includes the component of religion by referring to religious texts specifically.
Islamic finance has been considered lately to be the ultimate remedy for those economies’ vices that have resulted from the global finanical crisis. It was then that Westerners embarked on a mission to study the possibilities of developing Islamic finance as a solution.
According to Ferjani Doghmane, a Tunisian Ennahda MP in the National Constituent Assembly (NCA) who is the chairman of the Finance and Planning Committee, in Tunisia Islamic finance did not just appear in 2009. He was alluding here to the creation of the Zitouna Bank by Sakhr El Materi, the son-in-law of former President Zine El Abidine Ben Ali. We certainly agree with Doghmane’s ideas. Islamic finance was not exclusively introduced by Materi, but we cannot deny the role Zitouna Bank played in the “democratization” and “popularity” of this type of finance.
As part of an organized informational meeting held on June 11 at the Employers’ Federation by Zitouna Takaful Insurance Co. on the theme, “Takaful Insurance at the service of individuals and economic institutions,” Doghmane, in his position as a member and chairman of the NCA’s Finance Committee, stated his position on Islamic finance and insurance. In the past, there were already laws governing the sector that had been drafted according to market needs, but this legislation did not actually govern the Islamic finance sector. Currently, there are texts that legislate Islamic finance and grant all Tunisians the freedom to choose between Western and Islamic finance.
Doghmane added that the NCA has integrated several draft laws into its program of work, and also into the work of committees, including Islamic projects. Wassim Bel Arbi, a journalist who moderated the meeting, commented, rightly, on the word “Islamic projects,” emphasizing that this could lead to confusion or feed the fears of some people who dread the Islamization of the constitution through the establishment of such projects.
Nevertheless, Doghmane explained that there is no reason to be afraid of this word because the people are Muslim, and their elected officials have not included anything that would scare them in the constitution. Still, some controversial draft laws are essentially aimed at Islamizing society and the economy.
One of these disputed draft laws is that involving Islamic sukuks (bonds). Doghmane recalled that the 2013 Finance Law provides 1 billion dinars (about $620 million) in cash based on the issuance of sukuks. Therefore it is a new resource, the purpose of which needs to be clarified. He added that the final report on the Islamic sukuks draft law will be presented by the end of June 2013.
Speaking on the topic of Islamic insurance, the CEO of Zitouna Takaful, Makram Ben Sassi, recalled that this business has existed in Tunisia for 30 years, adding that his company offers a rich range of 30 products dedicated to individuals and economic institutions. Yet, the real problem is that there is a lack of awareness and responsibility rooted in the mentality of Tunisians in general.
In other words, an individual does not get enrolled in an insurance plan except by obligation and not by choice. In some cases, individuals even resort to self-insurance and eventually end up getting into trouble. Moreover, Ben Sassi draws the attention to the fact that insured individuals do not trust insurance companies to a certain level and often believe that they are profiting at the expense of customers. Therefore, the creation of Islamic insurance has given insured individuals some comfort and trust and encouraged them to benefit from the insurance services more objectively.
Tunisians are choosing Islamic insurance more and more since it complies with their principles better than conventional insurance. According to Barouni, this type of consumer has the right to benefit from the products of Islamic finance, which significantly contributes to the revitalization of the national economy.
Today, the development of Islamic banking and Islamic insurance primarily depends on the introduction of a law that is more in line with market needs and expectations. Still, Barouni believes that the imperfections of the existing law have not so far hindered the smooth development of Islamic finance.
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