“Islamic finance now extends beyond the traditional predominantly Muslim economies to become an increasingly important part of the international financial system.”
“Islamic finance implicitly embraces strong core values and universally beneficial characters.”
“The Islamic financial system derives its strength and stability from its faculty to uphold Shariah principles. The Islamic financial system thus has an in-built dimension that promotes financial soundness and stability, as it resides within a financial trajectory underpinned by the forces of Shariah injunctions.”
These are the words of Tan Sri Dr. Zeti Akhtar Aziz, a prominent Bank Governor in Malaysia who has been an outspoken advocate of the Islamic financial system as an alternative to Western capitalism. Aziz has given speeches at Islamic finance summits pointing out the success of Malaysia’s Islamic-based economy and laying out a clear mission: “positioning Islamic finance as an integrated component of the International Financial System.”
Aziz now has the perfect global platform for her mission. She was recently appointed by the hard left United Nations General Assembly president Miguel d’Escoto Brockmann to serve on his Commission of Experts, a high-level task force of economic and finance specialists which is tasked with making recommendations for radical reforms of the global economic system. This gives her a megaphone to publicize Sharia-based Islamic banking to an international audience, as a potential solution for the ongoing global economic crisis.
The UN Commission of Experts is headed by Joseph Stiglitz, the winner of the Nobel Prize for economics in 2001 and former Senior Vice President and Chief Economist of the World Bank who has been a critic of free market economics. The titles of two of his articles show clearly where he stands: “Turn Left for Growth” and “The Malaysian Miracle.” Asked by FrontPage Magazine whether Islamic finance contained any lessons for his commission to apply in recommending the architecture for a new global economic order, he praised the Sharia-based system for focusing on fundamentals and for its superior ethics in comparison to American lending practices.
The Commission of Experts issued a preliminary report on March 20 outlining its views on the causes of the current global economic crisis, the impacts on all countries and recommendations to avoid its recurrence and restore global economic stability. The report contemplates a massive reordering of the world economy involving trillions of dollars of wealth transfers, global regulation, and global taxes, all under the supervision of the United Nations.
The report blends the socialist and Islamic economic perspectives as an alternative to our present capitalistic system. It has four basic themes. Western-style free market capitalism is the villain. Redistributive justice is mandatory. New global governance authorities are required. Global taxes are also needed.
The only institution that the UN experts believe has broad enough political legitimacy to serve as the global decision making forum and eliminate the abuses of free market capitalism is, unsurprisingly, the body that gave them the platform to air their views on a global stage in the first place – the United Nations. Standing UN bureaucracies such as the United Nations Conference on Trade and Development Secretariat have been pressing this same message in order to justify their own permanent existence. They want major re-regulation of the market by governments working in unison through the global decision-making arms of the UN.
1. The Villain
Every polemic text has to have its target to attack. In this case, the Commission of Experts preliminary report goes after “the previously fashionable economic doctrines” of free market economies in the “rich countries” as the cause of the global crisis.
The rich developed countries foisted their rotten system on the poor developing countries, which are suffering much of the fall-out through no fault of their own, according to the UN experts. Without citing a single example, the report claimed that “developing countries that have developed good regulatory frameworks, created effective monetary institutions, and succeeded in implementing sound fiscal policies” have been brought to their knees by “defects in one economic system” – i.e., Western-style capitalism.
2. Redistributive “Justice”
Of course, it goes without saying that the villain must pay. This means even more redistribution of wealth to the developing countries than the hundreds of billions of dollars already set to be transferred from the United States and other developed countries under the UN’s Millennium Development Goals assistance program.
The commission report calls for the rich industrialized countries to dig deeper into their pockets and take at least one percent of the stimulus packages meant to get their own economies moving again and send that money to the developing countries instead. In effect, the UN experts want to take nearly $8 billion dollars off the top from the $787 billion stimulus package passed by Congress and send it directly to the developing countries with no questions asked. Also, any banks that receive bailout money from American taxpayers should not focus so much on making domestic loans that would help American businesses to stay alive and help Americans to stay in their homes and jobs. Instead, the UN experts want some of that bailout money to go toward making shaky loans that are unlikely to be paid back in order to “finance additional support to developing countries.”
Secretary General Ban Ki-moon is already starting to put these ideas into motion. He sent a letter to the leaders attending the Group of 20 economic summit in London suggesting that they establish a $1 trillion global stimulus package for the poorest countries over the next two years. That would be $50 billion per donor if divided equally among the Group of 20 countries. Since the United States is usually asked by the UN to put up at least 20% of whatever money it is raising, that would mean U.S. taxpayers would be expected to fork over $200 billion extra over the next two years.
Would we at least be able to impose some reasonable conditions on the massive grants and loans for development and other support (or ““conditionalities” as the Commission of Experts calls them)? The UN experts say absolutely not!
After all, it would be politically incorrect to expect each recipient of our taxpayers’ money to actually have to demonstrate that the money won’t end up in a corrupt dictator’s Swiss bank account because, according to the UN experts’ circular reasoning, such “conditionalities” would “disadvantage developing countries relative to the developed, and undermine incentives for developing countries to seek support funding...”
By the way, we are being asked to entrust some of our money for this support funding to the United Nations Development Programme (“UNDP”), the main UN agency in charge of spending for development projects around the world. The current president of UNDP’s executive board is Iran’s UN representative.
3. Global Government
The UN experts recommend a new global economic order that must “encompass more than the G-7 or G-8 or G-20, but the representatives of the entire planet, from the G-192 (number of member states in the General Assembly).”
The first step would be to dump the dollar as the standard international reserve currency and instrument for international payments for products traded on the global market, such as oil. In its place would be a new Global Reserve System controlled by an international financial institution under UN oversight. The three leading countries singing a similar refrain are Iran, China and Russia.
Dr. Stiglitz believes that the world economies can start phasing in the Global Reserve Currency in lieu of the dollar as early as next year. If so, get ready to pay even more for gas since the U.S. would no longer be able to purchase oil from OPEC countries in dollars and would instead have to use a synthetic global currency whose value is established by a UN body with the objective of reducing American purchasing power in relation to that of oil export and developing countries. The value of the dollar will crash, causing the current recession to move into a depression of the magnitude of the 1930s. We may well find ourselves giving away dollar devalued hard assets at ridiculously low prices, in order to accumulate the new global reserve currency, to countries in the Middle East that are hostile to our democratic values. At the same time Uncle Sam will still be expected to pay the lion’s share of global foreign aid, the UN budget and defense of the free world.
In addition to the idea of a new Global Reserve Currency, the UN Commission of Experts says that international economic institutions, such as the World Bank and International Monetary Fund, must be significantly altered and supplemented with new global governance bodies to make the whole process more “democratic” and accountable to the developing countries. This would be accomplished in two ways, say the experts. First, the internal governance structures of existing international economic institutions would be fundamentally revamped to give more power to the developing countries. Second, they would be made accountable to a new “globally representative forum” known as the Global Economic Coordination Council, which would be created as part of the UN system at “a level equivalent with the General Assembly and the Security Council”.
That’s not all. The UN experts want to create still more global institutional arrangements for governing the global economy, including a new Global Financial Regulatory Authority, a new Global Competition Authority and a new International Bankruptcy Court. They think it is just too “difficult to rely on national regulatory authorities”. The focus of this enhanced global regulation, they say, should be on the most systematically important countries – i.e., the United States and other major industrial nations. In the Commission of Experts’ view, our sovereignty as a self-governing people to regulate our own economy must give way to global government for the sake of “the broad interest of the international community”.
4. Global Taxes
Whenever you see the words “innovative finance” or “stable and sustainable finance” in a United Nations document you know that proposals for global taxes or a euphemistic equivalent are likely to follow. That is the case with the Commission of Experts’ preliminary report, which uses both phrases and contains three specific “innovative finance” proposals. The first would raise revenues generated from the auction of global natural resources such as ocean fishing rights. The second is an international carbon tax. The third is an international financial services tax. The receipts from all these revenue sources would go directly to the developing countries – again, with no questions asked.
Islamists and socialists have a common agenda – to bring down Western capitalism. They are exploiting the perfect storm that has arisen from the current economic crisis, which they blame on the United States. Their revenge is to position the United Nations as the only global membership institution that can ensure the legitimacy of decisions to govern a global economy and push free market economics aside.