ONE ON ONE: ‘Pent-up demand’ for Islamic finance in Egypt, says expert: Daily Star Egypt

By Pascale Nader
First Published: January 28, 2009

Amid the gloom of the global economic crisis, many are hopeful that investors will turn to Islamic finance as the less risky option. Meanwhile, the relatively nascent market needs to play catch up with rising demand.

Ibrahim Warde, adjunct professor of international business at the Fletcher School of law and diplomacy at Tufts University, works on the Islamic Finance Project at Harvard University. He has authored three books — including “The Price of Fear: the Truth behind the Financial War on Terror” — numerous articles for Le Monde diplomatique and lectures at institutions worldwide on the topics of banking and finance.

The TREND Training Center, along with the Egypt Stock Forum, invited Warde to instruct the “Islamic Banking and Finance” training program held recently in Cairo. Warde sat down with Daily News Egypt to discuss the development of and challenges facing Islamic financial institutions.

Daily News Egypt: In 2000, when your book “Islamic Finance in the Global Economy” was published, how was Islamic finance being approached and how has it developed?

Ibrahim Warde: Much of what was being written about Islamic finance back then was either saying it was a perfect system or a deeply flawed system. What I tried to do is look at both sides.

It was more about trying to explain a paradox that was right in the middle of globalization. You have this very old system that reappeared, and so the core of what [the book] looked at was how a system of medieval tradition could rise in the midst of globalization. How in the 1970s, because of the oil boom and the rising role of Saudi Arabia, Islamic finance appeared on the scene and then how it has evolved towards more pragmatism.

I did anticipate that Islamic finance would grow very rapidly and continue to grow in the double digits. I didn’t quite foresee the huge growth that has happened… The September 11th attacks had a number of indirect consequences, including the strengthening of Islamic finance.

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