Friday, 22 February 2008

Religion in the World - Sukuk and Prosbul

A report on the BBC this morning looked at the possibility of Her Majesty’s Government issuing Sukuk or Islamic-law compliant bonds. Since Sharia law prohibits lending money at interest, creditors, including Governments, who wish to borrow from Muslims, have to offer something other than interest to get capital. It seems the classic way round the problem is to have a Muslim ‘lender’ purchase capital and be paid rent rather than give a loan and be paid in interest. Perhaps unsurprisingly the presenter was poking holes in the logic of the scholar trying to explain the niceties of Sharia before 9am, ‘wasn’t it more than a bit hypocritical?’ However I found myself nodding along quite happily, the twisted logic of the Sukuk felt very familiar. In a glorious attempt to prevent the poorest in society being trapped by debt the Bible ensures that all debts are wiped out in the Sabbatical year. Beware the Bible goes on to state lest you harbour the base thought, "The seventh year, the year of remission, is approaching," so that you are mean to your needy kinsman and give him nothing. He will cry out to the Lord against you, and you will incur guilt. 10 Give to him readily and have no regrets when you do so, for in return the Lord your God will bless you in all your efforts and in all your undertakings. (Deut 15:9-10) But it did no good. The Bible’s best intentions were thwarted by human nature. So to prevent mass illegality Hillel the Elder created the pruzbul, a legal fiction to enable the collection of loans made before the sabbatical year. (Gittin 58b, Mishnah Shviit Chapt 10) Some two thousand years ago Hillel didn’t, of course, reject the holiness of scripture or outwardly deny its obliging nature. He just ensured that life, viewed by the commercial and civil standards of that time could go on. The world needs religion to control an unbridled capitalist impulse that left unchecked will see those with capital become ever richer while forcing those who need capital into servitude. That said we should never forget that religion needs the world, as a touchstone to ensure that good intentions can be part of a lived reality and not some impossible fairy-land dream. Institutions like the pruzbul and the Sukuk are signs of the possibility of religion and the world meeting in harmony. They are signs of religions looking outwards to the worlds in which they are to be lived. It’s good news.

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