Zakat returned to Middle Eastern political discourse in the 1930s, through modern Islamism. It became one of two concrete initiatives distinguishing an Islamic modern economy from economies ostensibly corrupted by secularists and colonialists. The other was Islamic finance. In both cases, the focus was more on the symbolism of Islamizing a secularized sphere than on solving actual economic problems. Islamism tacitly stripped zakat of all but one of its original functions: poverty alleviation. Sidelining zakat’s role in public finance and the protection of property rights, it frittered away golden opportunities to draw from Islam’s rich history universal lessons for economic progress and rule of law. Focusing on the functions that made zakat a pillar of Islam would have initiated a dialogue with secularists inclined to dismiss Islam as a source of backwardness. A similar scenario has played out in relation to Islamic finance. Nowhere has a categorical ban on interest, which is absent from the Quran anyway, been enforced. In any case, it is unfeasible. In making Islamic finance seem interest-free through euphemisms and accounting tricks, Islamism reduces economic transparency and institutionalizes dishonesty. Weakening rule of law, it also compounds mistrust.

This chapter addresses the growth of Islamic banks and finance in the UK. It begins with a brief historical overview of the informal institutions that were forerunners to Islamic banks and their development into a thriving global industry in which the UK is a leading player. It proceeds to survey the distinguishing features of Islamic banking and typical financial products before charting the innovative regulatory reforms that permitted the industry to expand. A section on the small volume of English case law highlights the standard but manageable issues arising from its continuing organic growth. The subsequent section models the two conventional theoretical approaches to the rise of Islamic banks and the regulatory means used to achieve it, as well as the problems with these interpretations. The final section sets out a pluralist response offering the best explanation and justification for these developments. It concludes with an appraisal of the problem of informal financial instruments and an optimistic assessment of the industry and the new formal institutions created, falling as they do within the general regulatory framework of the UK’s financial system.

Chapter five examines the evolution of Muslim Brotherhood in contemporary Egypt and characterizes the organization as an aspiring fraction of capital. Far from being an anti-capitalist force in Egyptian social and political life, the Muslim Brotherhood has consistently sought to establish an Islamic economy rooted in private property. In the late 1970s and early 1980s, this resulted in the growth of Islamic finance, in the form of both Islamic banking as well as Islamic Money Management Companies. The growth of Islamic finance and the attempts to branch out into manufacturing were met with resistance from the NDP and the dominant fraction of capital that had close ties to the regime. By the late 1990s, a new guard of conservative, business-oriented Brothers ascended to through the ranks of the movement and attempted to replicate the successes of the AKP in Turkey. The deposition of Mubarak in the context of the Arab uprisings opened up space for the Brothers to attempt to expand their economic power beyond their commercial base. The attempt to do so, however, would bring the Brothers into conflict with an emboldened and extremely powerful military that managed to establish itself as the hegemonic fraction of capital in Egypt.

The chapter considers the role of Islamic finance in promoting the Sustainable Development Goals (SDGs) in developing countries. The SDGs require unprecedented mobilization of funds to support their implementation. Given the social and moral ethos and emphasis on prohibition of riba (interest) and asset-backed financing, Islamic finance offers an effective non-traditional means of financing for sustainable development activities and projects in developing countries. This chapter demonstrates that the ideology of Islamic finance, its attributes, principles, products, instruments and institutions all tend to be well-suited to boosting the SDGs. It also shows that Islamic finance has great potential in supporting developing countries’ efforts to finance the SDGs agenda. Divided into seven sections, the chapter outlines sustainable development from an Islamic perspective, and the principles of Islamic finance, before assessing the role of Islamic financial institutions, sukuk (Islamic bonds), and Islamic social finance (zakat and waqf) in promoting the SDGs.

The Islamic finance industry has grown significantly over recent decades and become a contender in the financial market. The defining feature of this industry is its Sharia underpinning, which provides its institutions with a different business model based on profit-loss sharing. This chapter argues that although Islamic governance does not, per se, have an equivalent term to corporate sustainability, it offers a number of key concepts that map onto the overarching themes of corporate sustainability. Salient among these concepts are: the notions of ‘khilafah’, which encompasses vicegerency and trusteeship, and the idea of social unity. However, the existing Sharia governance frameworks of Islamic financial institutions in a number of jurisdictions have some deficiencies that may undermine the advancement of the industry’s sustainability agenda. This argument will be advanced by referring to three key jurisdictions, namely, Oman, Dubai and Malaysia. The Chapter also makes some suggestions to overcome these governance challenges.