Analysis on G20 Summit
1. From 14 to 15 of November the Group of Twenty (G20) met to discuss a variety of issues pertaining to the healthy of the world economy. Before elaborating on what was discussed and concluded, it is important to comprehend some background information.
2. The Global Financial System (GFS) unleashed a series of financial crisis in Mexico (1994-95), Asia (1997-98), Russia (1998), and Argentina (1999). It was in the aftermath of these crises that The G20 (more formally known as the Group of Twenty Finance Ministers and Central Bank Governors) was formally established at the G7 Finance Ministers' meeting on September 26, 1999. The inaugural meeting took place on December 15-16, 1999 in Berlin.
3. G20 is a group that consists of finance ministers and central bank governors from 20 economies. This includes 19 of the world's largest national economies, plus the European Union (EU). Collectively, the G20 economies comprise 85% of global gross national product, 80% of world trade (including EU intra-trade) and two-thirds of the world population. Full membership of the G20 includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the US and the EU. In addition, to the financial ministers of these countries, the leaders of the World Bank (WB), International Monetary Fund (IMF) and World Trade Organization (WTO) also attend G20 meetings.
4. The mandate of G20 is to protect the GFS and the economies of the major Western powers by strengthening the international financial architecture and providing opportunities for dialogue on national policies, international co-operation, and international financial institutions. G20 works with emerging economies through the IMF, WB and WTO to ensure that these economies are well integrated in the GFS.
5. The Washington meeting was called at the behest of European leaders including France's President Nicholas Sarkozy and UK Prime Minister Gordon Brown. Europe’s leaders have been incensed at the way America allowed the credit crises to spread across the globe. For instance, the US manipulated oil, food and commodity prices to shore up the dollar. Subsequently, the cost of production and inflation soared in Europe; the European Central Bank (ECB) had little choice but to raise interest rates to tackle inflation. As a direct consequence of this policy the EU’s economy started to contract and investors switched from Euros to the Dollars. Investors felt that America’s low interest rates and economic growth was a more favorable investment as compared to the EU. Hence the value of the Euro plummeted and the EU’s economy started to tilt towards recession. Faced with poor growth the ECB was forced to slash interest rates. This further aggravated the value of the euro in comparison to the dollar. Amidst this, Sarkozy and Brown, later to be joined by Merkel and other EU leaders pressed Bush for an international summit to discuss the crisis. Associated Press reported on 5 October, that following an emergency meeting, four members of the G8 - Britain, France, Germany and Italy - “called for an international conference "as soon as possible" to consider sweeping reforms of the global finance system.” At an emergency meeting of the Eurogroup on 12 October, 2008, Prime Minister Gordon Brown presented a proposal to deal with the financial crisis. During a press conference at the 2 day EU summit in Brussels on 15-16 October 2008, European Commission chief Manuel Barosso said there will only be “a global agreement if Europe has a leadership role.” French President Nicolas Sarkozy and European Commission President Jose Manual Baroso visited President George Bush at Camp David on 18 October, 2008. Mr Sakozy said “We have a mandate from the 27 members of the European Union to come here and say first and foremost that this is a worldwide crisis and, therefore, we must find a worldwide solution”. Mr Baroso stated: “The international financial system - its basic principles and regulations and its institutions need reform. We need a new global financial order...This is why Europe wants the calling of an international summit as soon as possible to launch an effective world response to world crisis.” On 21 October, 2008 President Sarkozy told the European Parliament that “Europe must be the standard bearer for the idea of reforming world capitalism.” José Luis Rodriguez Zapatero, the Spanish Prime Minister said, “The EU must take over the leadership of change because that is what it has long been calling for while the US was not favorable…. There has to be regulation and limits to everything to do with incentives and rewards.”
6. EU leaders believe that the cause of the global financial crisis was inadequate regulation of the financial sector, especially in the US. In other words the real culprit behind the global financial crisis in their view is American capitalism. Europe’s leaders would like to see more coordinated action to revive the world economy, both by more interest cuts and more spending by governments to bring countries out of recession. They hope that the meeting will agree a blueprint for future reform, including changes to the international organizations charged with regulating the world economy, such as the International IMF and WB.Against this backdrop, Bush finally agreed to convene an international summit in Washington from November 14 to November 15.But From the outset the meeting of the G20 was not going to produce anything substantive, apart from agreement on lofty goals and general principles. These were mentioned in a fact sheet issued by the Whitehouse after the summit.
Goals
1. Reached a common understanding of the root causes of the global crisis
2. Reviewed actions countries have taken and will take to address the immediate crisis and strengthen growth
3. Agreed on common principles for reforming our financial markets
4. Launched an action plan to implement those principles and asked ministers to develop further specific recommendations that will be reviewed by leaders at a subsequent summit
5. Reaffirmed their commitment to free market principlesPrinciples
1. Strengthening transparency and accountability by enhancing required disclosure on complex financial products;
2. Enhancing sound regulation by ensuring strong oversight of credit rating agencies; prudent risk management;
3. Promoting integrity in financial markets by preventing market manipulation and fraud, helping avoid conflicts of interest
4. Reinforcing international cooperation by making national laws and regulations more consistent and encouraging regulators to enhance their coordination and cooperation across all segments of financial markets
5. Reforming international financial institutions (IFIs) by modernizing their governance and membership
The reason for a lack of consensus on detail solutions amongst EU, US and UK leaders at the summit is as follows:-First, President George Bush does not possess the domestic clout or international legitimacy to carry out a comprehensive reform of the GFS. Besides, Bush is a lame duck president and leaders of many countries are waiting for president elect Obama to take office before seriously considering all the proposals on the table. Hence that is why George Bush launched a passionate defense of the free market on the eve of the summit, as he aimed to deflect European criticism about American capitalism. “While reforms in the financial sector are essential, the long-term solution to today's problems is sustained economic growth,” he told an audience in New York. "And the surest path to that growth is free markets and free people.” So the best George Bush could do was get consensus agreement on the free market (see goal nos. 5) which he did. The rest is left to his successor Obama to pursue.Second, prior to the G20 meeting, some EU leaders had urged a complete rethink of the Bretton Woods agreement in 1944 that created the post-war system of fixed exchange rates and established the IMF and the World Bank. German Chancellor Angela Merkel and French President Nicolas Sarkozy said “Bretton Woods II” should bring about “genuine, all-encompassing reform of the international financial system”. On October 13, 2008, British Prime Minister Gordon Brown said world leaders must meet to agree to a new economic system. “We must have a new Bretton Woods, building a new international financial architecture for the years ahead.”However, Brown's approach is quite different than the original Bretton Woods System. Britain wants to carry on emphasizing the continuation of globalization and free trade and is opposed to a return to fixed exchange rates. Sarkozy disagrees with Brown and argues that the "Anglo-Saxon" model of unrestrained markets has failed. He is supported by Italian Economics Minister Giulio Tremonti has said that Italy will use its 2009 G7 chairmanship to push for a "New Bretton Woods.Europe’s view is diametrically opposed to America’s view on Bretton Woods, as America does not want to cede control of IMF, WB and WTO. Moreover, America possesses very little appetite to abandon the world of floating exchange rates, as it has given Wall Street complete reign over the world markets. Britain is keen to pursue free trade but is looking to acquire greater control over the international financial institutions and also wants America to regulate its corporate masters who have hitherto escaped punishment.
Because of these two factors the G20 could only agree on goals and principles. This was acknowledged by several leaders, as being the first step in the reform GFS. Future meetings of the G20 and other forums will decide what will become of the GFS.
Saturday 27 December 2008
Sunday 31 August 2008
Monday 23 June 2008
Saudis
Americas: Saudi’s capitulate to American pressure and raise production
On 13/6/2008 the BBC reported that Saudi Arabia could increase its output by more than half a million barrels of oil per day to a record 10 million barrels per day. Saudi Arabia is coming under increasing pressure from G8 and the Bush administration to raise production and curb escalating oil prices. However, the popular perception is that speculators are the chief culprits behind the soaring price of crude oil. Italian Finance Minister Giulio Tremonti said "enormous" speculation is behind the rising energy prices.
It is now widely documented that whenever the dollar falls powerful hedge funds intervene and cause huge spikes in the price of crude oil. Such initiatives cause a temporary rebound in the value of the dollar. If the rulers of Saudi Arabia had a modicum of common sense they could take advantage of the current situation to rid the Saudi Arabia of American and western domination. All that is required is to de-peg the Saudi Riyal from the dollar and withdraw money from western banks.
Europe: Italy- Europe’s new police state
On 15/06/2008 the Italian government announced that 2,500 soldiers are to be deployed for a maximum period of one year. The deployment is the government’s attempt to curb Italy’s soaring crime. Up to 300 soldiers are expected to carry out patrols and security checks there to help combat muggers and pickpockets. This is the first time the Italian army has been used since World War 2. The fundamental cause of crime in capitalist societies like Italy is the capitalist goal in life, which each member of society strives to achieve. This goal in life only recognizes the pursuit of sensual pleasure for human beings as the sole way to attain happiness. The capitalist goal in life has no room for spiritual, moral or humanitarian pursuits. Naturally such a self-centered outlook towards life leads people to be irresponsible, callous and rebellious towards law and authority. Even the severity of the law does not deter people from committing crime. Thus for many years, Western governments have struggled to reduce the growing number of paedophiles, rapists, drug addicts, joy riders, burglars, fraudsters and the like - no matter how many laws they enact or how much time and money they spend on policing.
In Islam the individual through his Taqwa, the public through their concern about the preservation of society and the state all act in unison to ensure that the Islamic laws are implemented and that crime is minimized. The Islamic history bears testimony to this fact. For example, when Imam Malik was appointed the judge of Madinah, he had to wait almost a year before he presided over his first case.
Middle East: Egypt’s misplaced Fatwa
On 15/6/2008 it was reported that Al-Azhar University in Cairo issued a fatwa demanding that the government donate 20 percent of its profits from oil, gas and minerals to the poor as alms. Does not Al-Azhar recognize that this fatwa will never solve the economic problems of the poverty stricken masses? This is because the crux of the Egypt’s numerous economic problems is caused by capitalist solutions imported from the West. These solutions permeate all spheres of Egyptian life—not just economics. The fatwa that Al-Azhar should have issued is a stipulation for the removal of capitalist solutions along with the Mubarak regime that implements them. Allah says in the Quran: “And those who do not judge by what Allah has revealed are disbelievers” [TMQ]. A fatwa calling for the removal of Mubarak’s evil regime, and the re-establishment of the Khilafah on its ashes is long overdue from the ulema of Al-Azhar. The messenger (saw) of Allah described the ulema as the inheritors of the prophets. But today, Al-Azhar is a staunch supporter of Mubarak’s kufr regime that oppresses Muslims at the behest of colonialist powers.
Africa: Are Chad and Sudan on the brink of war?
This week Chad accused Sudanese soldiers of helping rebels attack one of its frontier military camps. The attack came as rebels opposed to Chadian President Idriss Deby Itno claimed further advances on the capital N'djamena. ”After dispatching columns of mercenaries to Chad and failing to secure strategic areas, the Sudanese army took matters in its own hands today and attacked Ade, backed up by helicopters,” a Chadian government statement said. Diplomatic relations broke off in mid-May after an attack near Sudan’s capital, Khartoum , by a Darfur rebel group, the Justice and Equality Movement. The real architects of this perpetual conflict are Europe and America. Chad through French and British aid and Sudan through American support are engaged in a bitter proxy war—which threatens to explode into a full blown conflict. The conflict is sold to world as humanitarian crisis in Darfur —nothing could be further from the truth.
At the heart of the dispute are Sudan’s strategic oil reserves. The struggle between the major powers also explains why hitherto the UN is ineffective and EUFOR (European Force) is stationed in Chad.
South Asia: Taliban’s assault demonstrates more than luck
The recent escape of hundreds of prisoners from Kandahar, the seizure of small towns in nearby vicinities, and the capture of helicopter engines bound for US crusaders speaks volumes about Taliban’s growing confidence. America and Europe frightened by an imminent Taliban comeback have ushered in huge deployments to fight the bold pushtun resistance. The rag-tag band of men, once dismissed as ineffective by crusader forces are now posing a grave threat—one of strategic proportions. The question on most people’s minds is what would happen if the Muslim armies from Iran, Central Asia and Pakistan joined the Taliban. Whilst the agent rulers in these countries reject such assertions, their people are hoping for such an outcome. Indeed, only the Khilafah can provide such a result. The messenger (saw) of Allah said, “The Imam is a shield behind whom the people are protected and behind whom they fight”.
Sunday 1 June 2008
The Dollar
The dollar crisis, rising oil & commodity prices
Question:The dollar crisis continues to persist and it its slide down is markedly visible. This has been followed by a surge in crude oil, gold and other minerals & metals prices thereby resulting in steep rise in foodstuff prices. This multi-faceted crisis is unprecedented both in terms of its intensity as well as persistence…Is this crisis really a result of economic problems, or is it the US policies that are spurring & aggravating it?I request you to please clarify this, may Allah reward you for it.
Answer: Indeed this crisis has a genuine economic aspect as well, but the interference of political hands has compounded & aggravated the problem to such proportions that we see.To fully clarify the picture, we shall explain how the crisis developed, how the political hands interfered with it and how the rise in the prices of crude oil, gold and metals affected the crisis, and finally we shall see how it developed into a food crisis.First of all: Indeed there is a genuine crisis in the US economy which has affected the strength & influence of the US dollar, consequently the US economy has been hit by the currently widespread slowdown. The current crisis has grown to such proportions due to the following factors:The US Trade Deficit:The United States imports more goods & services than it exports and its consumers have a great appetite for imports. For instance, the US imported goods & services worth US$ 1,625 billion in 2003, while its exports during that year were worth US$ 1,203 billion, which leaves a deficit of US$ 449 billion and has since risen to a gigantic figure of US$ 816 billion! This difference between the imports & exports was adjusted by printed currency (US dollars) or by US government bonds. This, by its nature leads to a downturn in US Dollars though it may not be officially acknowledged.Certainly, the US has never before experienced a trade deficit of such colossal proportions; on the contrary, it has been witnessing trade surplus and that too for many a decades, especially after World War II. Gradually, this trade surplus began to taper off over the years thanks to stiff competition from European as well as Asian countries that produce the goods at lower costs. This resulted in even higher imports of goods & services from such countries. This coincided with a huge military expenditure in the Vietnam War resulting in steeply risen balance of payment. In 1971, the US was forced to abandon supporting its dollar with gold, this was the first tremor. In the 80’s when global trade grew and industrial plants shifted from America to those countries that offered cheaper labour, economic shortfall began to show its ugly face. Also the continued imports from the countries that produced cheaper goods like Mexico, China & Malaysia led to further widening of the trade-deficit.Thus the deficits in the trade & payment balance sowed doubts and distrust about the US economy among the investors and later this led to a slump in the value of the US dollar.Debt:The US Treasury department statistics showed a rise in the indebtedness of the government (the Federal administration as well as the local administrations) from US$ 4.3 trillion (US$ 4,300,000,000,000) in 1990 to a staggering US$ 8.4 trillion in 2003, further rising to about US$ 8.9 trillion in 2007. This general debt is the size of 64% of the Gross Domestic Product. Thus the US can be grouped alongside those countries that suffer most from their debts. This debt is not confined to the US governments alone but comprises firms and individuals in its web. Individual debts alone in the US have recently reached a staggering figure of US$ 6.60 trillion, while the corporate debts, ranked first have reached US$ 18.40 trillion. Thus the total debts stand at US$ 34 trillion which is three times the GDP. This, in itself is a grave economic crisis.The Rise of the Euro:Ever since the advent of the Euro, it became the second alternative global reserve currency after the US dollar. This was due to the fact that Euro inherited this distinguished position from the Deutsche Mark, but it even surpassed it and this adversely affected the dollar. Thus the Euro enjoys even more trust than its German predecessor with its value constantly on the rise affecting the demand for the US currency and taking its shine. Hence several investors were encouraged by this fall of dollar’s value into switching their investments from the US currency to the stronger Euro.In addition to these, the US economy suffers from several factors foremost of them being inflation crossing 4%, unemployment in excess of 5%, an industry in disarray, poverty, poor education services, and the like…All these factors have contributed to the dollar losing its face & value.The dollar’s fall has forced several central banks across the globe to reduce their stocks of the US currency.Paul Michael, a currency strategist at the HSBC says: “The central banks have for quite some time realised that they are no longer keen to boost their dollar stocks. As a result, most central banks around the world have reduced the dollar part of their assets form 73 to 64%”.This is the real picture of the crisis confronting the US dollar.Secondly: It is in these circumstances that the US political interference came about in order to exploit the crisis in order to serve its own interests and thus turn the crisis from being a local crisis to a global one… this is how it came about:1. Any decrease in the value of an exporting country’s currency increases its exports because the costs of the goods becomes relatively cheaper for the importing country due to the fact that the importer pays a lower price for the goods considering that the currency of the exporting country has fallen. For instance, when an importer pays US$ 1000.00 as cost of the goods and presuming that this equals €1000.00. Now if the US dollar loses say 10% of it value, the importer will only need to pay €900.00 instead of €1000.00 on the earlier rates. Therefore the importers prefer to import goods from such countries that have lower value currencies.It is another matter that all this is fine so long as the currency depreciation is within 5% and is still acceptable if the currency has lost up to 10% value. But if the depreciation exceeds 10%, the industrial plants that manufacture the goods suffer due to the resulting inflation, in other words, the cost of the goods increases in such countries that have lost the currency values because the purchasing power of that currency is impaired. This inflation results in higher cost of the industrial plants and thereby an increase in the prices of its goods follows. This means that the cost of the goods does not remain US$ 1000.00, but it increase. Thus if a currency loses its value beyond an acceptable limit, the cost of production increases resulting in reduced exports due to the resulting inflation. In the case of America, the loss of the dollar’s value has crossed an acceptable limit, for instance, the Euro is trading at around US$ 1.60 as compared to US$ 0.80 in 2000. Which means that the value of the US dollar has breached critical economic limits and has lost over five times….As a result of this depression, the US exports have only grown by a meagre amount meaning that though the trade deficit has marginally been reduced, it remains and haunts the economy.Yet in spite of these, the US has not taken any steps to correct the trade deficit, it has not opened up its oil reserve stocks for usage to bring down the cost of production for the industrial plants which would result in increased exports. In fact the Bush administration has refused to open up the oil reserves for usage in order to reduce the fuel costs which have been shooting up drastically. In other words, the US has not tried to solve the deficit problem from an economic perspective.Similarly, it has not addressed the issue of the debt, on the other hand it has in fact it has worked to increase it further as a result of its aggression against Afghanistan and Iraq which have cost it over 2 trillion dollars! In addition the Bush administration has given loans to the wealthy US capitalists in the range of about a trillion dollars by way of tax subsidies. This is motivated by electoral & political considerations… leaving the debt as it was, or even worse.Thus the fall of dollar has persisted and the US has taken no economic steps to rectify the situation. It then exploited this low-cost dollar to politically blackmail countries that have huge dollar reserves such as China which has dollar reserves in the range of a thousand billion dollars causing it to lose colossal sums, then it exploited India, European countries and the oil countries forcing them float their currencies and buy dollars. This increased the demand for dollars and marginally contained the US deficits.2. Then came the collapse of the shares of US real estate mortgage firms which enabled America to transfer its crisis to the global level!America gave loans on soft interests to housing companies, especially the real estate mortgage firms that sell houses on mortgage until the installments are paid for. Thus liquidity was available to these companies in a big way, motivating them to go soft on conditions of sale and on easier terms and even reduced rates because liquidity was no problem for these companies thanks to the cheaper state loans. The Americans went in for buying houses in a big way because cash was available to them from US banks that gave loans on easy terms. In fact the banks gave loans even to extent of the full value of the mortgage unlike the European banks that give loans only up to 60% of the mortgage value. All this was because the US government was giving cheaper credits to real estate companies, causing them to register considerable profits.Now because of globalisation and susceptibility of one company buying out another whenever it sees a profit opportunity, the multinational companies, specialised banks and central banks as well as individuals bought shares of US real estate companies with the aim of taking profits… this caused the real estate companies to register consistent boom in the stock exchanges across the globe and especially in the US and eventually the real estate shares became the preferred form of investment at the cost of other sectors including modern technologies that were exposed to losses. Earlier, the investment of choice were the information technology and communication firms, but now the Americans, both individuals and companies preferred to buy real estate as long-term investment or for speculative trading. The real estate facilities were now so easily and widely available that banks even gave to loans to those individuals who were not in a position to pay their debts due to their reduced incomes.This situation persisted and caused no severe problems till the current year until the burden of the loans became untenable for the government. The US then stopped the soft-loans to the mortgage & real estate sector banks; it even demanded repayment of the earlier loans which were now due. These real estate companies and mortgage banks in turn asked their customers to repay. But since unemployment, inflation and economic stagnation was rampant in the US, the house owners could neither repay the loan mortgages on the house cost nor the bank loans… real estate prices collapsed as a result of this payment default and the individuals who were in a position to repay their loans also defaulted. Thus, a house whose price was US$ 500,000 lost over half of its value and was available for US$200,000, yet as was reported in the press, no one was willing to buy even at this price. Over 2 million American owners were left encumbered with life-long financial liabilities. Consequently, due to loans default at such an enormous scale, the lending banks’ shares fell on the stock markets and mortgage companies collapsed under tremendous losses estimated to be in the range of US$ 2,000 million! This led to several real estate companies announcing their bankruptcy.As a result of this, an enormous portion of the debts became unrecoverable bad debt.The big banks were at last exposed to a severe jolt in the American mortgage sector, ‘Market’ magazine published by the German-Arab Chamber of Commerce & Industry in Berlin, pointed that the American ‘CitiGroup’ that opened the new year with losses incurred in the last quarter of the previous year to the tune of US$ 9.83 billion (equivalent to € 6.60 billion at the then prevalent rates). This loss to the ‘CitiGroup’ in the mortgage sector has now reached a staggering US$ 18.10 billion.The same losses were suffered by other banking institutions; the American ‘Merryll Lynch’ announced a write-off of US$ 14.10 billion from its assets, meaning that it ran a loss of US$ 9.80 billion in the last quarter of 2007-the biggest loss in its history.The Swiss giant ‘UBS’ was also similarly placed; it received billions of dollars from the Singapore Sovereign Fund, the ‘GIC’ to enable it to avoid going bankrupt.This is how the shares of real estate mortgage firms collapsed in the stock markets and as a result the shares of banking institutions followed in several countries across the world that were linked to the real estate investments or directly involved in the US real estate market. This did not strictly remain confined to the specific sector, but spread to even such sectors that do not deal in real estate, but because of the effects of globalisation, and overlapping of economic sectors over each other, no sector was totally insusceptible.It was not just that the shares of the real estate sector firms collapsed by on the American Wall Street, this phenomenon was repeated across the world; the Frankfurt exchange index fell by 7.10%, in Paris, the index lost 6.80%, the London index fell by 5.40%, in Madrid by 7.50%, Tokyo lost 3.80%, Shanghai 5.10%, Sao Paolo index fell by 6.00%, Riyadh index lost 9.80%, Dubai index fell by 9.40%, Beirut by 3.00% and Cairo lost 4.20%.Owing to the enormity of the losses suffered, it was decided by the French President Nicholas Sarkozy and British Prime Minister Gordon Brown in their 27th March, 2008 meeting that they will urge the banks to immediately disclose the extent of bad debts with them. In January last, Brown had said that Britain faces a tough test with the global economy in difficult and dangerous times due to the credit crisis precipitated by US loans default. This statement came after the 5th largest British real estate mortgage bank; the ‘Northern Rock’ was exposed to huge losses due to the US real estate crisis.This is how the United States passed its local crisis to the global level to such an extent that the European central banks pumped in a whopping US$ 150 billion in the last year to support real estate mortgage companies so that the resulting crisis does not adversely affect the global stock exchanges including the European exchanges due to the global reach of multi national companies that affects every country because of the maze created in the aftermath of a globalised world. Thus America exposed Europe and then supported its own real estate companies through such means.In conclusion, the American crisis had several political & economic ramifications; the US, passing through real crises leading to the devaluation of its currency, indulged in manipulative politics (or conspired) to involve the entire world to be sunk in by a crisis that was essentially an American crisis especially after globalisation and opening up of stock exchanges in the name of ‘market economy’ and extending the reach of multinational firms to the whole world. In this environment, most countries’ stock exchanges are open to each other and affected by them.The dollar devalued owing to America’s economic woes was thus exploited by it to reduce its trade deficit and to politically blackmail especially those countries that maintain huge dollar reserves. In the process, it also managed to convert what was essentially a US real estate mortgage firms’ crisis into a global crisis; it is another matter that America itself is not insulated from this.Yet in spite of all these political maneuverings, the US economy has not returned to growth cycle, it is just that its’ collapse has ceased for the time being. Were it not for globalisation, open-market economy and the capitalist economic order being prevalent and dominant over the world economy, and importantly if the countries were not relying on the US dollar as the reserve currency, the American economy could not have stood on its own and sustained until now.Thirdly: As for the rising prices of such minerals as oil, gold, iron etc., it must be observed that it followed the real estate mortgage crisis and the resulting stock & derivatives market crisis when the stock indices collapsed. In the aftermath of these crises, the investors’ confidence took a beating in such investment instruments that do not carry any intrinsic value, like bonds, shares and equity stock markets. Therefore they moved away from such investments and preferred such investment avenues that have an intrinsic value like gold and other important metals thereby creating demand for such commodities and consequently a huge upsurge in their prices; thus gold prices have already reached US% 1,000 per ounce and as the current indicators point, it is poised to even reach US$ 1,500.00 an ounce.Indeed the United States is itself among those worst affected by the gold price upsurge. If this upward trend in gold prices persists, the value of the dollar will not be worth the paper it is printed on! Therefore, the US is expected to take steps to curb gold prices, indeed there are already pointers to that; the International Monetary Fund (IMF) has decided to sell 403 tons of gold due to its own budget deficit. However, the IMF has said that this quantity will be sold in phases over a long term. This declaration by the IMF will go a long way in curbing the (speculation) in gold prices. It is probable that this gold will be sold to central banks which may cause the central banks to increase their profit margins and thereby it may also result in increased exchange rates. Again, the IMF on 9th April, 2008 stated, that the financial crisis will cost a trillion US dollars. Such statements more than being honest reflections of the situation are designed to be speculative aimed at changing the course of economy and finance. As the English newspaper ‘Telegraph’ said in its commentary, the IMF is the last resort to emerge out of the current financial crisis, thus this statement of the IMF amounts to preparing grounds for it.Thus the fall in dollar prices and investors’ lack of confidence in the primary US markets has pushed many of them not to invest in banknote credit instruments. A logical assessment of this reveals that the current banknote credit instruments are not fully backed in any perceptible way. In other words, in the current atmosphere, the confidence crisis will quickly spill over to other currencies. Therefore, certain central banks, like the Central Bank of China have begun to buy gold and this has pushed gold prices t its highest levels. The same applies to the price rise in other metals like silver and platinum. Further, due to increased demands of copper, zinc, aluminum and nickel from India and China, their prices have also risen. This increased demand from India and China is due to their rapid economic growth. This has been the case of the Chinese demand for the last 12 years while in the case of India, it has been there for 4 years. China has invested US$ 1 trillion in its infrastructure development and will spend another US$ 50 billion every year for the coming 15 years. On its part, India has begun its infrastructure development plan six years back. In the beginning, the investments on this plan were meager, but in the last 4 years investments have reached US$ 50 billion and it has plans to invest between US$ 30 to 40 billion annually for the next ten years. However, India does not have sufficient mineral reserves to support this investment plan; moreover, the rise in petrol prices has meant an increase in its production costs and as a result of this, there is an overall price increase.Indeed the cause of oil price increase is related to the sinking dollar prices and the higher purchasing power for oil of countries like those in the European Union, China and India and this is driving the demand for oil. However, the chief cause for oil price upsurge is the speculative trading, and it is the American speculation that has led to it. This was meant to put together the dollars in circulation from those who want to buy oil in order to enable the US to avoid a total collapse of its currency. This is reason behind uncertain information (rather misinformation) regarding American oil reserve figures that the US puts out periodically.Speculations play a key role in price rise; for instance, take the speculative trading in futures contracts or the speculative trading in minerals, especially gold. A higher gold price pushes such countries as China, Russia and other Asian countries to buy gold as a means of getting rid of their enormous dollar reserves. These countries no longer trust the US currency, because any decrease in its value results in severe losses to them. Similarly, China bought iron and other metals required for its industry and this pushed the iron and other metals’ prices up. Also Germany bought huge quantities of scrap iron and this caused the price surge, in fact it multiplied because a big portion of it is exported to China.It has been known for a long time that crude oil prices increase whenever there is a surge in the value of dollar. These two are inversely linked to each other. The current condition is no different, on 17th April, 2008, the crossed the barrier of US$ 115.00 per barrel and the upswing continued with the prices crossing US$ 120.00 per barrel today on 5th May, 2008.The oil prices have increased more than four folds since the year 2002 due to an increase in demand not just in China and other growing economies. In fact, the projections indicate that oil prices will reach US$ 130.00 per barrel by December next.Fourth: As for the global food crisis, it has exacerbated the economic crisis arising out of the US home mortgage crisis. Another crisis has emerged which is far more severe and threatens global food security in various parts of the globe where food prices ranging from bread to even milk have shot up.This crisis became evident recently after the increase in prices of wheat, maize and other basic food stuffs in the last few years. This worrisome trend has emerged in the past few months.On 12th May, 2008, the British magazine ‘Economist’ published a report which said that the pulses prices increased in an unprecedented manner unheard of since the “Economist Index’ for food stuffs was instituted in 1945 and according to the magazine, this increase has been 75%. The Chicago Chamber of Commerce, whose food pulses price index is the world’s leading indicator of pulses reports a 90% increase in wheat prices, 80% in soya beans and 20% in maize prices and are still on the rise even today.The major reasons behind the foodstuffs price rise and consequently the emergence of the food crisis:Increase in oil prices and sliding dollar prices:1. Certainly, the increase in oil prices has led to an increase in the prices of products required for agriculture like seeds, fertilisers, insecticides & pesticides, agricultural implements and transportation. An increase in cost of production and transport influences increase in the prices of foodstuff especially wheat and maize. For instance in the Philippines, the rice prices have risen by 70% during the last year.On the other hand, the foodstuff prices are mostly assessed US dollars, and when the dollar loses its value, it is but natural that foodstuff prices will automatically shoot upwards.Gratsiano observes: “loss of confidence in the dollar has pushed the investment funds to look for higher returns in the basic goods…first of all in metals and then in foodstuffs”. A number of speculators have in the past years switched their investments to the commodity markets in search of higher returns than they would earn in shares and bonds markets.2. Climatic Conditions: Climatic conditions such as floods, droughts and cyclones affect agricultural production. For instance, Australia, one of the largest exporters of food pulses is currently facing unprecedented levels of droughts in its history. Such conditions have been compounded by an economic boom in countries such as China, India and Brazil and this has resulted in accentuated levels of meat consumption.It is a known fact that to produce a piece of meat containing 100 calories, 700 calories of vegetation has to be fed to animals. Out of 2.13 billion tons of food grains only 1.01 tons is earmarked for human consumption. These figures are released by the Food & Agriculture Organisation (FAO) of the UN. Consequently, as the global economy grows, cattle livestock also grow proportionately.3. Bio-fuels from food grains:Jean Zeigler, UN’s Special Rapporteur on the ‘Right to Food’ observed in a statement over the German Radio that intensive bio-fuel production now represents ‘crime against humanity’ because it pushes food grain prices across the world.Bio-fuels depend on agriculture production, and during the recent years many of the industrialised countries have exploited agriculture produce and agricultural land for the production of bio fuels in order to reduce their dependence on petro oil whose prices are touching record-high levels. This is leading to increased demand for bio fuel and thereby for food grains.Therefore in certain countries such as the United States and Brazil, agricultural land is being converted for production of maize and soy bean required for producing ethanol from them. Since 2001, the quantity of maize used in production of ethanol in the US has increased 300%. Further, the US is attempting to produce 35 billion gallons (133 billion liters) per annum of ethanol by the year 2017. The US Congress in its ‘Energy Document’ for 2005 has decided to increase maize-extracted ethanol production from 4 billion gallons in 2006 to 7.5 billion gallons in 2012.In March 2007, the US President George Bush met his Brazilian counterpart Luiz Inacio Lula da Silva to sign the ‘Ethanol Convention’ between the two countries for cooperation among them to develop research and development on the next generation bio fuels. They also agreed on forming a trade union for bio fuel especially in the Central Asian countries. This ‘Ethanol Convention’ between the two presidents marks the beginning of a growing phenomenon of producing food grains for extraction of bio fuels. In the grasslands and forests of Brazil, Argentina, Colombia, Ecuador and Uruguay, the land is being set aside for production of sugarcane plantation, palm oil and soy beans for extraction of bio fuels. In Brazil alone, soy bean production has occupied some 21 million hectares of forest lands, 14.0 million hectares in Argentina. It does appear that this phenomenon will subside so long as the food grains prices continue to surge upwards. In the year 2008, it is expected that out of 2.13 billion tons of food grains, 100 million tons will be used to extract bio fuels, in other words, this 100 million tons will used for feeding cars instead of human beings!4. Administrative & Political failures:As regard to wheat and other strategic grains production, the EU produces some 122 million tons, China produces 106 million tons, India, 75 million tons, America produces 56 million tons and Russia produces 48 million tons of grains. The US exports 32 million tons, Canada exports 15 million tons and the EU and Argentina export 10 million tons each.As for the Arabian countries, they all import wheat except Syria. The leading importer is Egypt, the land of Nile. It is the largest wheat importer in the world with wheat imports of 7 million tons while Algeria, that used to present itself as the land of the Atlas Mountains and farmlands during the French period, imports 5 million tons. The land of Tigris & Euphrates, Iraq imports 3 million tons, Morocco also imports 3 million tons, Yemen imports close to 3 millions as well while Tunisia imports 1 million and Jordan 500,000 tons of wheat.During this period of a lower dollar and higher oil prices, the import cost of wheat is likely to go higher and higher, which will greatly encumber the budget of importing countries even if wheat and other food grains are made available to them at subsidised rates.This is despite the fertile lands & water resources available to these Arab countries! Is it not surprising or even shocking that the land of Nile delta (Egypt), the land of the two rivers (Iraq), and the land of the Atlas Mountains (Algeria) happen to be the largest importer of wheat in the world!!!.Perhaps this is what becomes evident from the recent report of the World Bank on water resources in the Middle East and Northern Africa. This explains how the wicked politics shapes the Arab world! The report concluded that in order to provide water, it is imperative to develop agriculture policies in such a way so as to reduce dependence on water consumption. The World Bank has advised to grow tomatoes, water melons etc.. Instead of wheat! As per the recommendations of Francisco Montovani, the water resources expert at the World Bank, it is not related to technological processes to be decided upon by engineers; rather it is through deeper policies!
It is known that several countries have capacity to grow wheat, but colonialist policies followed by the International Monetary Fund prevent this. The IMF recommends growing of tobacco & cotton to those countries that follow its recommendations and gives them loans and other assistance to grow such crops, while it refuses loans and other assistance for growing wheat. This is evidently meant to feed the industrial plants of the rich nations with these raw materials.Indeed Allah (swt) has bestowed the Muslim countries with bounties of fertile lands and abundance of water resources, and if these are properly harnessed, Muslims can lead affluent lives. But this requires a rightful system from the One who has wisdom, i.e. the system of Islam, the Khilafah Rashidah which will fill the world with justice and well being. It is hoped that this will soon materialise with the command of Allah (swt).
Question:The dollar crisis continues to persist and it its slide down is markedly visible. This has been followed by a surge in crude oil, gold and other minerals & metals prices thereby resulting in steep rise in foodstuff prices. This multi-faceted crisis is unprecedented both in terms of its intensity as well as persistence…Is this crisis really a result of economic problems, or is it the US policies that are spurring & aggravating it?I request you to please clarify this, may Allah reward you for it.
Answer: Indeed this crisis has a genuine economic aspect as well, but the interference of political hands has compounded & aggravated the problem to such proportions that we see.To fully clarify the picture, we shall explain how the crisis developed, how the political hands interfered with it and how the rise in the prices of crude oil, gold and metals affected the crisis, and finally we shall see how it developed into a food crisis.First of all: Indeed there is a genuine crisis in the US economy which has affected the strength & influence of the US dollar, consequently the US economy has been hit by the currently widespread slowdown. The current crisis has grown to such proportions due to the following factors:The US Trade Deficit:The United States imports more goods & services than it exports and its consumers have a great appetite for imports. For instance, the US imported goods & services worth US$ 1,625 billion in 2003, while its exports during that year were worth US$ 1,203 billion, which leaves a deficit of US$ 449 billion and has since risen to a gigantic figure of US$ 816 billion! This difference between the imports & exports was adjusted by printed currency (US dollars) or by US government bonds. This, by its nature leads to a downturn in US Dollars though it may not be officially acknowledged.Certainly, the US has never before experienced a trade deficit of such colossal proportions; on the contrary, it has been witnessing trade surplus and that too for many a decades, especially after World War II. Gradually, this trade surplus began to taper off over the years thanks to stiff competition from European as well as Asian countries that produce the goods at lower costs. This resulted in even higher imports of goods & services from such countries. This coincided with a huge military expenditure in the Vietnam War resulting in steeply risen balance of payment. In 1971, the US was forced to abandon supporting its dollar with gold, this was the first tremor. In the 80’s when global trade grew and industrial plants shifted from America to those countries that offered cheaper labour, economic shortfall began to show its ugly face. Also the continued imports from the countries that produced cheaper goods like Mexico, China & Malaysia led to further widening of the trade-deficit.Thus the deficits in the trade & payment balance sowed doubts and distrust about the US economy among the investors and later this led to a slump in the value of the US dollar.Debt:The US Treasury department statistics showed a rise in the indebtedness of the government (the Federal administration as well as the local administrations) from US$ 4.3 trillion (US$ 4,300,000,000,000) in 1990 to a staggering US$ 8.4 trillion in 2003, further rising to about US$ 8.9 trillion in 2007. This general debt is the size of 64% of the Gross Domestic Product. Thus the US can be grouped alongside those countries that suffer most from their debts. This debt is not confined to the US governments alone but comprises firms and individuals in its web. Individual debts alone in the US have recently reached a staggering figure of US$ 6.60 trillion, while the corporate debts, ranked first have reached US$ 18.40 trillion. Thus the total debts stand at US$ 34 trillion which is three times the GDP. This, in itself is a grave economic crisis.The Rise of the Euro:Ever since the advent of the Euro, it became the second alternative global reserve currency after the US dollar. This was due to the fact that Euro inherited this distinguished position from the Deutsche Mark, but it even surpassed it and this adversely affected the dollar. Thus the Euro enjoys even more trust than its German predecessor with its value constantly on the rise affecting the demand for the US currency and taking its shine. Hence several investors were encouraged by this fall of dollar’s value into switching their investments from the US currency to the stronger Euro.In addition to these, the US economy suffers from several factors foremost of them being inflation crossing 4%, unemployment in excess of 5%, an industry in disarray, poverty, poor education services, and the like…All these factors have contributed to the dollar losing its face & value.The dollar’s fall has forced several central banks across the globe to reduce their stocks of the US currency.Paul Michael, a currency strategist at the HSBC says: “The central banks have for quite some time realised that they are no longer keen to boost their dollar stocks. As a result, most central banks around the world have reduced the dollar part of their assets form 73 to 64%”.This is the real picture of the crisis confronting the US dollar.Secondly: It is in these circumstances that the US political interference came about in order to exploit the crisis in order to serve its own interests and thus turn the crisis from being a local crisis to a global one… this is how it came about:1. Any decrease in the value of an exporting country’s currency increases its exports because the costs of the goods becomes relatively cheaper for the importing country due to the fact that the importer pays a lower price for the goods considering that the currency of the exporting country has fallen. For instance, when an importer pays US$ 1000.00 as cost of the goods and presuming that this equals €1000.00. Now if the US dollar loses say 10% of it value, the importer will only need to pay €900.00 instead of €1000.00 on the earlier rates. Therefore the importers prefer to import goods from such countries that have lower value currencies.It is another matter that all this is fine so long as the currency depreciation is within 5% and is still acceptable if the currency has lost up to 10% value. But if the depreciation exceeds 10%, the industrial plants that manufacture the goods suffer due to the resulting inflation, in other words, the cost of the goods increases in such countries that have lost the currency values because the purchasing power of that currency is impaired. This inflation results in higher cost of the industrial plants and thereby an increase in the prices of its goods follows. This means that the cost of the goods does not remain US$ 1000.00, but it increase. Thus if a currency loses its value beyond an acceptable limit, the cost of production increases resulting in reduced exports due to the resulting inflation. In the case of America, the loss of the dollar’s value has crossed an acceptable limit, for instance, the Euro is trading at around US$ 1.60 as compared to US$ 0.80 in 2000. Which means that the value of the US dollar has breached critical economic limits and has lost over five times….As a result of this depression, the US exports have only grown by a meagre amount meaning that though the trade deficit has marginally been reduced, it remains and haunts the economy.Yet in spite of these, the US has not taken any steps to correct the trade deficit, it has not opened up its oil reserve stocks for usage to bring down the cost of production for the industrial plants which would result in increased exports. In fact the Bush administration has refused to open up the oil reserves for usage in order to reduce the fuel costs which have been shooting up drastically. In other words, the US has not tried to solve the deficit problem from an economic perspective.Similarly, it has not addressed the issue of the debt, on the other hand it has in fact it has worked to increase it further as a result of its aggression against Afghanistan and Iraq which have cost it over 2 trillion dollars! In addition the Bush administration has given loans to the wealthy US capitalists in the range of about a trillion dollars by way of tax subsidies. This is motivated by electoral & political considerations… leaving the debt as it was, or even worse.Thus the fall of dollar has persisted and the US has taken no economic steps to rectify the situation. It then exploited this low-cost dollar to politically blackmail countries that have huge dollar reserves such as China which has dollar reserves in the range of a thousand billion dollars causing it to lose colossal sums, then it exploited India, European countries and the oil countries forcing them float their currencies and buy dollars. This increased the demand for dollars and marginally contained the US deficits.2. Then came the collapse of the shares of US real estate mortgage firms which enabled America to transfer its crisis to the global level!America gave loans on soft interests to housing companies, especially the real estate mortgage firms that sell houses on mortgage until the installments are paid for. Thus liquidity was available to these companies in a big way, motivating them to go soft on conditions of sale and on easier terms and even reduced rates because liquidity was no problem for these companies thanks to the cheaper state loans. The Americans went in for buying houses in a big way because cash was available to them from US banks that gave loans on easy terms. In fact the banks gave loans even to extent of the full value of the mortgage unlike the European banks that give loans only up to 60% of the mortgage value. All this was because the US government was giving cheaper credits to real estate companies, causing them to register considerable profits.Now because of globalisation and susceptibility of one company buying out another whenever it sees a profit opportunity, the multinational companies, specialised banks and central banks as well as individuals bought shares of US real estate companies with the aim of taking profits… this caused the real estate companies to register consistent boom in the stock exchanges across the globe and especially in the US and eventually the real estate shares became the preferred form of investment at the cost of other sectors including modern technologies that were exposed to losses. Earlier, the investment of choice were the information technology and communication firms, but now the Americans, both individuals and companies preferred to buy real estate as long-term investment or for speculative trading. The real estate facilities were now so easily and widely available that banks even gave to loans to those individuals who were not in a position to pay their debts due to their reduced incomes.This situation persisted and caused no severe problems till the current year until the burden of the loans became untenable for the government. The US then stopped the soft-loans to the mortgage & real estate sector banks; it even demanded repayment of the earlier loans which were now due. These real estate companies and mortgage banks in turn asked their customers to repay. But since unemployment, inflation and economic stagnation was rampant in the US, the house owners could neither repay the loan mortgages on the house cost nor the bank loans… real estate prices collapsed as a result of this payment default and the individuals who were in a position to repay their loans also defaulted. Thus, a house whose price was US$ 500,000 lost over half of its value and was available for US$200,000, yet as was reported in the press, no one was willing to buy even at this price. Over 2 million American owners were left encumbered with life-long financial liabilities. Consequently, due to loans default at such an enormous scale, the lending banks’ shares fell on the stock markets and mortgage companies collapsed under tremendous losses estimated to be in the range of US$ 2,000 million! This led to several real estate companies announcing their bankruptcy.As a result of this, an enormous portion of the debts became unrecoverable bad debt.The big banks were at last exposed to a severe jolt in the American mortgage sector, ‘Market’ magazine published by the German-Arab Chamber of Commerce & Industry in Berlin, pointed that the American ‘CitiGroup’ that opened the new year with losses incurred in the last quarter of the previous year to the tune of US$ 9.83 billion (equivalent to € 6.60 billion at the then prevalent rates). This loss to the ‘CitiGroup’ in the mortgage sector has now reached a staggering US$ 18.10 billion.The same losses were suffered by other banking institutions; the American ‘Merryll Lynch’ announced a write-off of US$ 14.10 billion from its assets, meaning that it ran a loss of US$ 9.80 billion in the last quarter of 2007-the biggest loss in its history.The Swiss giant ‘UBS’ was also similarly placed; it received billions of dollars from the Singapore Sovereign Fund, the ‘GIC’ to enable it to avoid going bankrupt.This is how the shares of real estate mortgage firms collapsed in the stock markets and as a result the shares of banking institutions followed in several countries across the world that were linked to the real estate investments or directly involved in the US real estate market. This did not strictly remain confined to the specific sector, but spread to even such sectors that do not deal in real estate, but because of the effects of globalisation, and overlapping of economic sectors over each other, no sector was totally insusceptible.It was not just that the shares of the real estate sector firms collapsed by on the American Wall Street, this phenomenon was repeated across the world; the Frankfurt exchange index fell by 7.10%, in Paris, the index lost 6.80%, the London index fell by 5.40%, in Madrid by 7.50%, Tokyo lost 3.80%, Shanghai 5.10%, Sao Paolo index fell by 6.00%, Riyadh index lost 9.80%, Dubai index fell by 9.40%, Beirut by 3.00% and Cairo lost 4.20%.Owing to the enormity of the losses suffered, it was decided by the French President Nicholas Sarkozy and British Prime Minister Gordon Brown in their 27th March, 2008 meeting that they will urge the banks to immediately disclose the extent of bad debts with them. In January last, Brown had said that Britain faces a tough test with the global economy in difficult and dangerous times due to the credit crisis precipitated by US loans default. This statement came after the 5th largest British real estate mortgage bank; the ‘Northern Rock’ was exposed to huge losses due to the US real estate crisis.This is how the United States passed its local crisis to the global level to such an extent that the European central banks pumped in a whopping US$ 150 billion in the last year to support real estate mortgage companies so that the resulting crisis does not adversely affect the global stock exchanges including the European exchanges due to the global reach of multi national companies that affects every country because of the maze created in the aftermath of a globalised world. Thus America exposed Europe and then supported its own real estate companies through such means.In conclusion, the American crisis had several political & economic ramifications; the US, passing through real crises leading to the devaluation of its currency, indulged in manipulative politics (or conspired) to involve the entire world to be sunk in by a crisis that was essentially an American crisis especially after globalisation and opening up of stock exchanges in the name of ‘market economy’ and extending the reach of multinational firms to the whole world. In this environment, most countries’ stock exchanges are open to each other and affected by them.The dollar devalued owing to America’s economic woes was thus exploited by it to reduce its trade deficit and to politically blackmail especially those countries that maintain huge dollar reserves. In the process, it also managed to convert what was essentially a US real estate mortgage firms’ crisis into a global crisis; it is another matter that America itself is not insulated from this.Yet in spite of all these political maneuverings, the US economy has not returned to growth cycle, it is just that its’ collapse has ceased for the time being. Were it not for globalisation, open-market economy and the capitalist economic order being prevalent and dominant over the world economy, and importantly if the countries were not relying on the US dollar as the reserve currency, the American economy could not have stood on its own and sustained until now.Thirdly: As for the rising prices of such minerals as oil, gold, iron etc., it must be observed that it followed the real estate mortgage crisis and the resulting stock & derivatives market crisis when the stock indices collapsed. In the aftermath of these crises, the investors’ confidence took a beating in such investment instruments that do not carry any intrinsic value, like bonds, shares and equity stock markets. Therefore they moved away from such investments and preferred such investment avenues that have an intrinsic value like gold and other important metals thereby creating demand for such commodities and consequently a huge upsurge in their prices; thus gold prices have already reached US% 1,000 per ounce and as the current indicators point, it is poised to even reach US$ 1,500.00 an ounce.Indeed the United States is itself among those worst affected by the gold price upsurge. If this upward trend in gold prices persists, the value of the dollar will not be worth the paper it is printed on! Therefore, the US is expected to take steps to curb gold prices, indeed there are already pointers to that; the International Monetary Fund (IMF) has decided to sell 403 tons of gold due to its own budget deficit. However, the IMF has said that this quantity will be sold in phases over a long term. This declaration by the IMF will go a long way in curbing the (speculation) in gold prices. It is probable that this gold will be sold to central banks which may cause the central banks to increase their profit margins and thereby it may also result in increased exchange rates. Again, the IMF on 9th April, 2008 stated, that the financial crisis will cost a trillion US dollars. Such statements more than being honest reflections of the situation are designed to be speculative aimed at changing the course of economy and finance. As the English newspaper ‘Telegraph’ said in its commentary, the IMF is the last resort to emerge out of the current financial crisis, thus this statement of the IMF amounts to preparing grounds for it.Thus the fall in dollar prices and investors’ lack of confidence in the primary US markets has pushed many of them not to invest in banknote credit instruments. A logical assessment of this reveals that the current banknote credit instruments are not fully backed in any perceptible way. In other words, in the current atmosphere, the confidence crisis will quickly spill over to other currencies. Therefore, certain central banks, like the Central Bank of China have begun to buy gold and this has pushed gold prices t its highest levels. The same applies to the price rise in other metals like silver and platinum. Further, due to increased demands of copper, zinc, aluminum and nickel from India and China, their prices have also risen. This increased demand from India and China is due to their rapid economic growth. This has been the case of the Chinese demand for the last 12 years while in the case of India, it has been there for 4 years. China has invested US$ 1 trillion in its infrastructure development and will spend another US$ 50 billion every year for the coming 15 years. On its part, India has begun its infrastructure development plan six years back. In the beginning, the investments on this plan were meager, but in the last 4 years investments have reached US$ 50 billion and it has plans to invest between US$ 30 to 40 billion annually for the next ten years. However, India does not have sufficient mineral reserves to support this investment plan; moreover, the rise in petrol prices has meant an increase in its production costs and as a result of this, there is an overall price increase.Indeed the cause of oil price increase is related to the sinking dollar prices and the higher purchasing power for oil of countries like those in the European Union, China and India and this is driving the demand for oil. However, the chief cause for oil price upsurge is the speculative trading, and it is the American speculation that has led to it. This was meant to put together the dollars in circulation from those who want to buy oil in order to enable the US to avoid a total collapse of its currency. This is reason behind uncertain information (rather misinformation) regarding American oil reserve figures that the US puts out periodically.Speculations play a key role in price rise; for instance, take the speculative trading in futures contracts or the speculative trading in minerals, especially gold. A higher gold price pushes such countries as China, Russia and other Asian countries to buy gold as a means of getting rid of their enormous dollar reserves. These countries no longer trust the US currency, because any decrease in its value results in severe losses to them. Similarly, China bought iron and other metals required for its industry and this pushed the iron and other metals’ prices up. Also Germany bought huge quantities of scrap iron and this caused the price surge, in fact it multiplied because a big portion of it is exported to China.It has been known for a long time that crude oil prices increase whenever there is a surge in the value of dollar. These two are inversely linked to each other. The current condition is no different, on 17th April, 2008, the crossed the barrier of US$ 115.00 per barrel and the upswing continued with the prices crossing US$ 120.00 per barrel today on 5th May, 2008.The oil prices have increased more than four folds since the year 2002 due to an increase in demand not just in China and other growing economies. In fact, the projections indicate that oil prices will reach US$ 130.00 per barrel by December next.Fourth: As for the global food crisis, it has exacerbated the economic crisis arising out of the US home mortgage crisis. Another crisis has emerged which is far more severe and threatens global food security in various parts of the globe where food prices ranging from bread to even milk have shot up.This crisis became evident recently after the increase in prices of wheat, maize and other basic food stuffs in the last few years. This worrisome trend has emerged in the past few months.On 12th May, 2008, the British magazine ‘Economist’ published a report which said that the pulses prices increased in an unprecedented manner unheard of since the “Economist Index’ for food stuffs was instituted in 1945 and according to the magazine, this increase has been 75%. The Chicago Chamber of Commerce, whose food pulses price index is the world’s leading indicator of pulses reports a 90% increase in wheat prices, 80% in soya beans and 20% in maize prices and are still on the rise even today.The major reasons behind the foodstuffs price rise and consequently the emergence of the food crisis:Increase in oil prices and sliding dollar prices:1. Certainly, the increase in oil prices has led to an increase in the prices of products required for agriculture like seeds, fertilisers, insecticides & pesticides, agricultural implements and transportation. An increase in cost of production and transport influences increase in the prices of foodstuff especially wheat and maize. For instance in the Philippines, the rice prices have risen by 70% during the last year.On the other hand, the foodstuff prices are mostly assessed US dollars, and when the dollar loses its value, it is but natural that foodstuff prices will automatically shoot upwards.Gratsiano observes: “loss of confidence in the dollar has pushed the investment funds to look for higher returns in the basic goods…first of all in metals and then in foodstuffs”. A number of speculators have in the past years switched their investments to the commodity markets in search of higher returns than they would earn in shares and bonds markets.2. Climatic Conditions: Climatic conditions such as floods, droughts and cyclones affect agricultural production. For instance, Australia, one of the largest exporters of food pulses is currently facing unprecedented levels of droughts in its history. Such conditions have been compounded by an economic boom in countries such as China, India and Brazil and this has resulted in accentuated levels of meat consumption.It is a known fact that to produce a piece of meat containing 100 calories, 700 calories of vegetation has to be fed to animals. Out of 2.13 billion tons of food grains only 1.01 tons is earmarked for human consumption. These figures are released by the Food & Agriculture Organisation (FAO) of the UN. Consequently, as the global economy grows, cattle livestock also grow proportionately.3. Bio-fuels from food grains:Jean Zeigler, UN’s Special Rapporteur on the ‘Right to Food’ observed in a statement over the German Radio that intensive bio-fuel production now represents ‘crime against humanity’ because it pushes food grain prices across the world.Bio-fuels depend on agriculture production, and during the recent years many of the industrialised countries have exploited agriculture produce and agricultural land for the production of bio fuels in order to reduce their dependence on petro oil whose prices are touching record-high levels. This is leading to increased demand for bio fuel and thereby for food grains.Therefore in certain countries such as the United States and Brazil, agricultural land is being converted for production of maize and soy bean required for producing ethanol from them. Since 2001, the quantity of maize used in production of ethanol in the US has increased 300%. Further, the US is attempting to produce 35 billion gallons (133 billion liters) per annum of ethanol by the year 2017. The US Congress in its ‘Energy Document’ for 2005 has decided to increase maize-extracted ethanol production from 4 billion gallons in 2006 to 7.5 billion gallons in 2012.In March 2007, the US President George Bush met his Brazilian counterpart Luiz Inacio Lula da Silva to sign the ‘Ethanol Convention’ between the two countries for cooperation among them to develop research and development on the next generation bio fuels. They also agreed on forming a trade union for bio fuel especially in the Central Asian countries. This ‘Ethanol Convention’ between the two presidents marks the beginning of a growing phenomenon of producing food grains for extraction of bio fuels. In the grasslands and forests of Brazil, Argentina, Colombia, Ecuador and Uruguay, the land is being set aside for production of sugarcane plantation, palm oil and soy beans for extraction of bio fuels. In Brazil alone, soy bean production has occupied some 21 million hectares of forest lands, 14.0 million hectares in Argentina. It does appear that this phenomenon will subside so long as the food grains prices continue to surge upwards. In the year 2008, it is expected that out of 2.13 billion tons of food grains, 100 million tons will be used to extract bio fuels, in other words, this 100 million tons will used for feeding cars instead of human beings!4. Administrative & Political failures:As regard to wheat and other strategic grains production, the EU produces some 122 million tons, China produces 106 million tons, India, 75 million tons, America produces 56 million tons and Russia produces 48 million tons of grains. The US exports 32 million tons, Canada exports 15 million tons and the EU and Argentina export 10 million tons each.As for the Arabian countries, they all import wheat except Syria. The leading importer is Egypt, the land of Nile. It is the largest wheat importer in the world with wheat imports of 7 million tons while Algeria, that used to present itself as the land of the Atlas Mountains and farmlands during the French period, imports 5 million tons. The land of Tigris & Euphrates, Iraq imports 3 million tons, Morocco also imports 3 million tons, Yemen imports close to 3 millions as well while Tunisia imports 1 million and Jordan 500,000 tons of wheat.During this period of a lower dollar and higher oil prices, the import cost of wheat is likely to go higher and higher, which will greatly encumber the budget of importing countries even if wheat and other food grains are made available to them at subsidised rates.This is despite the fertile lands & water resources available to these Arab countries! Is it not surprising or even shocking that the land of Nile delta (Egypt), the land of the two rivers (Iraq), and the land of the Atlas Mountains (Algeria) happen to be the largest importer of wheat in the world!!!.Perhaps this is what becomes evident from the recent report of the World Bank on water resources in the Middle East and Northern Africa. This explains how the wicked politics shapes the Arab world! The report concluded that in order to provide water, it is imperative to develop agriculture policies in such a way so as to reduce dependence on water consumption. The World Bank has advised to grow tomatoes, water melons etc.. Instead of wheat! As per the recommendations of Francisco Montovani, the water resources expert at the World Bank, it is not related to technological processes to be decided upon by engineers; rather it is through deeper policies!
It is known that several countries have capacity to grow wheat, but colonialist policies followed by the International Monetary Fund prevent this. The IMF recommends growing of tobacco & cotton to those countries that follow its recommendations and gives them loans and other assistance to grow such crops, while it refuses loans and other assistance for growing wheat. This is evidently meant to feed the industrial plants of the rich nations with these raw materials.Indeed Allah (swt) has bestowed the Muslim countries with bounties of fertile lands and abundance of water resources, and if these are properly harnessed, Muslims can lead affluent lives. But this requires a rightful system from the One who has wisdom, i.e. the system of Islam, the Khilafah Rashidah which will fill the world with justice and well being. It is hoped that this will soon materialise with the command of Allah (swt).
Monday 31 March 2008
Geert Wilder’s Film
Political Opportunism
Under the banner of the “War On Terror” politicians have used the current political narrative to serve their interests. Right wing politicians such as Geert Wilders are calling for the ban of the Qur’an, and it was reported this week that the right wing Dutch Politician released a film on the divine book which he named Fitna, a Qur’anic term meaning strife.The film is an attempt to show how the Qur’an incites to violence, terror, death and destruction. In addition to this he has commented on the Qur’an many times, his opportunistic one liner’s include:
“Ban this wretched book just like Mein Kempf is banned”“Muslims living in the Netherlands should tear out half of the Koran”“…this fascist book called the Koran”However, can anyone take him seriously? Isn't this political opportunism at its best? The current situation in the Netherlands gives some damning answers,Netherlands under its current secular political framework suffers from:– 48% increase in robbery– 35% increase in violent crime– 24% increase in drug trafficking– 105% rise in prison population in the past 10 years (1991-2001)– 15% increase in homicideWhere are Geert Wilder’s detailed policies on these issues? Is he really interested in the Dutch people and the future of his country? If he is, then why does he and his political party just produce anti-Islamic rhetoric?
This exposes his political opportunism.Additionally, politicians who advance that secularism is the only political framework suitable for the world should be humbled by the statistics from a country seen to to be a shining example of secularism.ApproachMany politicians who attack the Qur’an claim that Europe is based upon the Judeo-Christian heritage and that secular values are the standard to follow, misquoting and twisting verses from the Qur’an. However if their thinking and approach were to be applied to their own heritage, then can not the following be taken as an excuse or justification for violence, oppression and hatred?“If you hear it said about one of the towns the Lord your God is giving you to live in, that wicked men have arisen among you and have led the people of their town astray, saying, ‘Let us go and worship other gods’.
Then you must enquire, probe and investigate it thoroughly. And if it is true and it has proved that this detestable thing has been done among you, you must certainly put to the sword all who live in that town. Destroy it completely both its people and its livestock
Gather all the plunder of the town into the middle of the public square and completely burn the town and all its plunder as a - whole burnt offering to the Lord your God.” Bible, Deuteronomy 13: 12-16Dutch Constitution Article 97,
(1) All Dutch nationals who are capable of doing so shall have a duty to cooperate in maintaining the independence of the State and defending its territory.
(2) This duty may also be imposed on residents of the Netherlands who are not Dutch nationals.If we use the line of thinking that the politicians who attack Islam and the Qur’an use, then anyone can conclude that the above statements have been, and are being used, as a justification to murder, subjugate, oppress and terrorise human beings.
Was it not under the secular political framework that the following occurred?- 700,000 innocent deaths due to the current Iraqi occupation?
- 500,000 Iraqi children dead in the 10 year sanctions?
- Over 60 million preventable deaths is Africa due to unjust trade laws and economic policies in the past decade?
- 70,000,000 murdered American Indians?
- World War 1 and 2?
- The occupation of Palestinian land?
- The genocide of Bosnians?
- The genocide of the Jews?
- Stalin? Hitler? Bush?
- The Vietnam War?
- The mass murder of new born baby girls in China?
- 250,000 dead Fillipinos?- Hiroshima?
- The ethnic cleansing of Palestinians and Chechnians?
- The oppression of Muslims via western backed dictators in the Muslim world?
However, the replies to this crude analysis of the Dutch constitution and the Bible would include ‘you are no law maker’, ‘do you have all the necessary tools to extract legislation?’, ‘you have ignored the context’. Muslims would agree, and this is how Islam and the Qur’an should be viewed too.In order to extract law from any secular text, knowledge of the language, relevant education in Law, knowledge of legislative changes and the rules of interpretation are required.
For example to interpret any UK book of law there are four basic rules of interpretation,
- Literal Rule: Literal Meaning of the Words
- Golden Rule: Take the whole of the statue rather than a few texts
- Purposive Rule: Ascertain what the craftsman intended
- Mischief Rule: Looks at what the circumstances and history when that law was created
This is similar with the Qur’an. Islamic scholarship has developed methods and rules of interpretation based upon the Islamic intellectual heritage. One requires all the necessary tools and techniques to extract legislation and law whether it is a secular text or the Qur’an, because they both deal with the individual and society. Therefore Geert Wilders who simply quotes and associates the Qur’anic verses with terror and oppression shows that his agenda is to destroy bridges and prevent dialogue.In a world of sound bytes and generalisations his politically motivated and agenda driven film does not facilitate any form of dialogue and understanding.
This indicates that he is a self-publicist and a political opportunist, using the current narrative on the War On Terror to achieve his right wing goals.This façade does not create an environment where people of the Netherlands, and Europe, can learn about the Qur’an without pre-judging the book and its followers. Dutch society is thirsty for information and its people are willing to initiate in a dialogue that transcends the anti-Islamic hysteria and hype.
Geert Wilders further exposed himself when he stated on Fox News “I am not a cultural relativist…I don’t believe cultures are equal I believe our culture is better than a retarded Islamic culture…” Without initiating a dialogue and a positive debate, how can he make these claims? It seems that he has already assumed the position of judge, jury and executioner.
The Qur’an can not be viewed just as a spiritual text but as a dynamic text that provides legislation for all of aspects of human life and behaviour. Politicians are in no position to understand the Qur’an with regards to Law, Foreign Policy and Economics as they do not have the tools in place to interpret the divine book.
If someone was willing to understand the Qur’an they would acquire all the tools necessary to do so or at least ask those who know. Can a butcher read a law book and claim he has knowledge of the law?
Under the banner of the “War On Terror” politicians have used the current political narrative to serve their interests. Right wing politicians such as Geert Wilders are calling for the ban of the Qur’an, and it was reported this week that the right wing Dutch Politician released a film on the divine book which he named Fitna, a Qur’anic term meaning strife.The film is an attempt to show how the Qur’an incites to violence, terror, death and destruction. In addition to this he has commented on the Qur’an many times, his opportunistic one liner’s include:
“Ban this wretched book just like Mein Kempf is banned”“Muslims living in the Netherlands should tear out half of the Koran”“…this fascist book called the Koran”However, can anyone take him seriously? Isn't this political opportunism at its best? The current situation in the Netherlands gives some damning answers,Netherlands under its current secular political framework suffers from:– 48% increase in robbery– 35% increase in violent crime– 24% increase in drug trafficking– 105% rise in prison population in the past 10 years (1991-2001)– 15% increase in homicideWhere are Geert Wilder’s detailed policies on these issues? Is he really interested in the Dutch people and the future of his country? If he is, then why does he and his political party just produce anti-Islamic rhetoric?
This exposes his political opportunism.Additionally, politicians who advance that secularism is the only political framework suitable for the world should be humbled by the statistics from a country seen to to be a shining example of secularism.ApproachMany politicians who attack the Qur’an claim that Europe is based upon the Judeo-Christian heritage and that secular values are the standard to follow, misquoting and twisting verses from the Qur’an. However if their thinking and approach were to be applied to their own heritage, then can not the following be taken as an excuse or justification for violence, oppression and hatred?“If you hear it said about one of the towns the Lord your God is giving you to live in, that wicked men have arisen among you and have led the people of their town astray, saying, ‘Let us go and worship other gods’.
Then you must enquire, probe and investigate it thoroughly. And if it is true and it has proved that this detestable thing has been done among you, you must certainly put to the sword all who live in that town. Destroy it completely both its people and its livestock
Gather all the plunder of the town into the middle of the public square and completely burn the town and all its plunder as a - whole burnt offering to the Lord your God.” Bible, Deuteronomy 13: 12-16Dutch Constitution Article 97,
(1) All Dutch nationals who are capable of doing so shall have a duty to cooperate in maintaining the independence of the State and defending its territory.
(2) This duty may also be imposed on residents of the Netherlands who are not Dutch nationals.If we use the line of thinking that the politicians who attack Islam and the Qur’an use, then anyone can conclude that the above statements have been, and are being used, as a justification to murder, subjugate, oppress and terrorise human beings.
Was it not under the secular political framework that the following occurred?- 700,000 innocent deaths due to the current Iraqi occupation?
- 500,000 Iraqi children dead in the 10 year sanctions?
- Over 60 million preventable deaths is Africa due to unjust trade laws and economic policies in the past decade?
- 70,000,000 murdered American Indians?
- World War 1 and 2?
- The occupation of Palestinian land?
- The genocide of Bosnians?
- The genocide of the Jews?
- Stalin? Hitler? Bush?
- The Vietnam War?
- The mass murder of new born baby girls in China?
- 250,000 dead Fillipinos?- Hiroshima?
- The ethnic cleansing of Palestinians and Chechnians?
- The oppression of Muslims via western backed dictators in the Muslim world?
However, the replies to this crude analysis of the Dutch constitution and the Bible would include ‘you are no law maker’, ‘do you have all the necessary tools to extract legislation?’, ‘you have ignored the context’. Muslims would agree, and this is how Islam and the Qur’an should be viewed too.In order to extract law from any secular text, knowledge of the language, relevant education in Law, knowledge of legislative changes and the rules of interpretation are required.
For example to interpret any UK book of law there are four basic rules of interpretation,
- Literal Rule: Literal Meaning of the Words
- Golden Rule: Take the whole of the statue rather than a few texts
- Purposive Rule: Ascertain what the craftsman intended
- Mischief Rule: Looks at what the circumstances and history when that law was created
This is similar with the Qur’an. Islamic scholarship has developed methods and rules of interpretation based upon the Islamic intellectual heritage. One requires all the necessary tools and techniques to extract legislation and law whether it is a secular text or the Qur’an, because they both deal with the individual and society. Therefore Geert Wilders who simply quotes and associates the Qur’anic verses with terror and oppression shows that his agenda is to destroy bridges and prevent dialogue.In a world of sound bytes and generalisations his politically motivated and agenda driven film does not facilitate any form of dialogue and understanding.
This indicates that he is a self-publicist and a political opportunist, using the current narrative on the War On Terror to achieve his right wing goals.This façade does not create an environment where people of the Netherlands, and Europe, can learn about the Qur’an without pre-judging the book and its followers. Dutch society is thirsty for information and its people are willing to initiate in a dialogue that transcends the anti-Islamic hysteria and hype.
Geert Wilders further exposed himself when he stated on Fox News “I am not a cultural relativist…I don’t believe cultures are equal I believe our culture is better than a retarded Islamic culture…” Without initiating a dialogue and a positive debate, how can he make these claims? It seems that he has already assumed the position of judge, jury and executioner.
The Qur’an can not be viewed just as a spiritual text but as a dynamic text that provides legislation for all of aspects of human life and behaviour. Politicians are in no position to understand the Qur’an with regards to Law, Foreign Policy and Economics as they do not have the tools in place to interpret the divine book.
If someone was willing to understand the Qur’an they would acquire all the tools necessary to do so or at least ask those who know. Can a butcher read a law book and claim he has knowledge of the law?
Sunday 23 March 2008
Islam
Whenever western governments mention weapons of mass destruction (WMD) and Muslims in the same breath, the western media immediately breaks into wild frenzy warning its people that a catastrophic event of epic proportions is about to unfold.
Old European fables of Muslims spreading Islam by the sword are reinvented to convey the impression that Muslims are extremely dangerous, highly irresponsible and pay scant regard to human life. Hence the mantra of disarming Muslim countries of WMD has become the rallying cry of the West directed against the Muslim world.
In some cases the arguments are extended to justify the West’s ongoing policy of regime change in Syria, Iran and perhaps Pakistan. However, a close study of Islamic rule in the past contradicts the popular western myth that Muslims are bloodthirsty people anxious to wipe out the rest of mankind in the name of Islam.
The same however, cannot be said about the West. The West armed with its secular doctrine and materialistic world-view proceeded to exploit, plunder and colonise vast populations in order to control resources and maximise wealth.
In pursuit of these newfound riches the West succeeded in destroying civilisation such as the Incas, American Indians, Aztecs, and Aborigines. Those who survived colonisation were forcibly converted to Christianity, stripped of their heritage and sold into bondage to western companies. For the indigenous people of Africa, India, Asia, Middle East and others, the promises of freedom quickly evaporated and were replaced by colonial rule. Rather than show remorse towards such atrocities the West could only gloat at its achievements.
Technologies such as cannons, pistols, steam engines, machine guns, aeroplanes, mustard gas etc only hastened the acquisition of colonies and the exploitation of its people. Resistance offered by the natives towards their colonial masters was met by brute force – often resulting in the destruction of entire communities. When the West was not destroying the natives they were too busy annihilating each other in a desperate bid to cling on to their precious colonies. World Wars I and II are prime examples of the destructive nature of western values.
This is a description of the Old World where countries like England, France, and Germany built empires and accumulated immense wealth on the death and destruction of millions of innocent people. Is the New World (America leading the West) any different today?
Take the example of the New World and its relationship with Afghanistan and Iraq. Liberation has become occupation; democracy has given way to colonial rule, devastation is termed as precision bombing and the slaughter of innocent Muslims is described as collateral damage. Meanwhile, American and British oil companies are queuing up to exploit the oil wells of Iraq and transport the energy reserves of the Caspian Sea to Europe via Afghanistan.
The Islamic Khilafah in the past never treated mankind in such a barbaric fashion. Neither did the Khilafah spread Islam by force nor destroy civilisations. When Islam spread to Egypt, many Coptic Christians did not embrace Islam and today they still number approximately 7 million. Likewise, when India was opened up to Islam the inhabitants were not coerced into accepting Islam. India today has a population of more than 750 million Hindus.
Compare this to extermination of Muslim and Jews in the courts of the Spanish Inquisitors during the much-coveted European renaissance. Those Jews that survived this Spanish holocaust, were warmly welcomed by the Ottoman Caliphate. In Islamic Spain they flourished and became important members of the Islamic society.
Today the world has more to fear from the destructive nature of western values than WMD. In the past these values were enforced upon nations either through direct colonial rule or through tyrannical regimes loyal to the West. Presently, the greatest danger-facing mankind is the constant threat of the West imposing its values on the rest of the world through WMD.
Old European fables of Muslims spreading Islam by the sword are reinvented to convey the impression that Muslims are extremely dangerous, highly irresponsible and pay scant regard to human life. Hence the mantra of disarming Muslim countries of WMD has become the rallying cry of the West directed against the Muslim world.
In some cases the arguments are extended to justify the West’s ongoing policy of regime change in Syria, Iran and perhaps Pakistan. However, a close study of Islamic rule in the past contradicts the popular western myth that Muslims are bloodthirsty people anxious to wipe out the rest of mankind in the name of Islam.
The same however, cannot be said about the West. The West armed with its secular doctrine and materialistic world-view proceeded to exploit, plunder and colonise vast populations in order to control resources and maximise wealth.
In pursuit of these newfound riches the West succeeded in destroying civilisation such as the Incas, American Indians, Aztecs, and Aborigines. Those who survived colonisation were forcibly converted to Christianity, stripped of their heritage and sold into bondage to western companies. For the indigenous people of Africa, India, Asia, Middle East and others, the promises of freedom quickly evaporated and were replaced by colonial rule. Rather than show remorse towards such atrocities the West could only gloat at its achievements.
Technologies such as cannons, pistols, steam engines, machine guns, aeroplanes, mustard gas etc only hastened the acquisition of colonies and the exploitation of its people. Resistance offered by the natives towards their colonial masters was met by brute force – often resulting in the destruction of entire communities. When the West was not destroying the natives they were too busy annihilating each other in a desperate bid to cling on to their precious colonies. World Wars I and II are prime examples of the destructive nature of western values.
This is a description of the Old World where countries like England, France, and Germany built empires and accumulated immense wealth on the death and destruction of millions of innocent people. Is the New World (America leading the West) any different today?
Take the example of the New World and its relationship with Afghanistan and Iraq. Liberation has become occupation; democracy has given way to colonial rule, devastation is termed as precision bombing and the slaughter of innocent Muslims is described as collateral damage. Meanwhile, American and British oil companies are queuing up to exploit the oil wells of Iraq and transport the energy reserves of the Caspian Sea to Europe via Afghanistan.
The Islamic Khilafah in the past never treated mankind in such a barbaric fashion. Neither did the Khilafah spread Islam by force nor destroy civilisations. When Islam spread to Egypt, many Coptic Christians did not embrace Islam and today they still number approximately 7 million. Likewise, when India was opened up to Islam the inhabitants were not coerced into accepting Islam. India today has a population of more than 750 million Hindus.
Compare this to extermination of Muslim and Jews in the courts of the Spanish Inquisitors during the much-coveted European renaissance. Those Jews that survived this Spanish holocaust, were warmly welcomed by the Ottoman Caliphate. In Islamic Spain they flourished and became important members of the Islamic society.
Today the world has more to fear from the destructive nature of western values than WMD. In the past these values were enforced upon nations either through direct colonial rule or through tyrannical regimes loyal to the West. Presently, the greatest danger-facing mankind is the constant threat of the West imposing its values on the rest of the world through WMD.
Monday 25 February 2008
Britain and Shariah Bond
Despite Britain ‘s animosity to Islam it plans to enter the Shariah bond market
On 17/2/08 it was revealed by the British media that the Chancellor Alistair Darling is expected to announce in his March 12 Budget if the Treasury will go ahead with plans for so-called "Sharia bonds (Sukuk)". The Treasury spokesman added: "We want the City of London to be one of the gateways globally for Islamic financial products and we want it to be competitive on all products you can imagine, so we should be competitive on Islamic finance as well as any other. Just because of your faith, there shouldn't be any issue about your access to financial services in the UK ." Sukuk is now estimated to be worth £ 5.5billion in a £125 billion global Islamic financial market. The announcement highlights a contradiction in Britain‘s commitment to its ideological values. On the one-hand, the British establishment regularly brow beats the Muslim community to compromise its Islamic values in exchange for the adoption of British values. Whilst on the other hand, the same establishment is prepared to sacrifice its ideology in a desperate bid to enter the booming Sukuk market and secure its commercial interests.
This contradiction should provide ample reassurance to those skeptical about the longevity of the coming Khilafah state. Simply put, Western capitalist states will willingly sacrifice their ideology to co-exist with the future Islamic state, as long as their interests are secured. The history of the 20th century also bears testimony to this fact. Britain on many occasions supported the Soviet Union against the US, even though she was ideologically opposed to it. Likewise, the US supported China against the Soviet Union .
Only an aware Islamic leadership that is political astute can exploit such situations and successfully navigate the Khilafah state to dominate the international situation.
On 17/2/08 it was revealed by the British media that the Chancellor Alistair Darling is expected to announce in his March 12 Budget if the Treasury will go ahead with plans for so-called "Sharia bonds (Sukuk)". The Treasury spokesman added: "We want the City of London to be one of the gateways globally for Islamic financial products and we want it to be competitive on all products you can imagine, so we should be competitive on Islamic finance as well as any other. Just because of your faith, there shouldn't be any issue about your access to financial services in the UK ." Sukuk is now estimated to be worth £ 5.5billion in a £125 billion global Islamic financial market. The announcement highlights a contradiction in Britain‘s commitment to its ideological values. On the one-hand, the British establishment regularly brow beats the Muslim community to compromise its Islamic values in exchange for the adoption of British values. Whilst on the other hand, the same establishment is prepared to sacrifice its ideology in a desperate bid to enter the booming Sukuk market and secure its commercial interests.
This contradiction should provide ample reassurance to those skeptical about the longevity of the coming Khilafah state. Simply put, Western capitalist states will willingly sacrifice their ideology to co-exist with the future Islamic state, as long as their interests are secured. The history of the 20th century also bears testimony to this fact. Britain on many occasions supported the Soviet Union against the US, even though she was ideologically opposed to it. Likewise, the US supported China against the Soviet Union .
Only an aware Islamic leadership that is political astute can exploit such situations and successfully navigate the Khilafah state to dominate the international situation.
Monday 18 February 2008
World Aids day[2006] - an Islamic perspective
• December 1st was World Aids Day, we have seen in the newspapers and on TV screens a lot of discussion about HIV & Aids• Let us look at this subject to understand its reality and look at the Islamic solution to the problem of HIV & Aids.
• HIV stands out in respect of its prevention. It is one of the most notorious infectious diseases around today, with good reason, as it is currently incurable. Although, it’s disease progression in an individual can be significantly slowed down.
• The uniqueness of HIV is in its transmission. It is a virus that must pass from person to person through the exchange of significant quantities of bodily fluids, primarily sexual fluid or blood.
• These fluids do not ordinarily transfer from person to person except through the undertaking of specific activities over which an individual normally has control. The main methods of transmission amongst adults are via sexual intercourse or the sharing of needles that enter the blood stream of sequential individuals. The sharing of needles primarily occurs during the use of recreational drugs such as heroine.
• A safe assertion may be made that if a healthy adult avoids certain high risk activities, the probability of contracting HIV are miniscule. If two people of the opposite gender marry, and are faithful to each other for the rest of their lives, their risk of contracting HIV through sexual activity is negligible. HIV in children is usually transmitted during childbirth from an infected mother. There are various techniques that can be used to prevent this vertical spread. However, it is simple reality that if adults do not have HIV, children could not get it either.
• The UN has reported that rates of HIV throughout the world are reaching previously unprecedented levels, estimated to be 40 million people infected worldwide. There were over 4 million new cases in the last year, 700 000 of which were in children. Current boom areas are Pakistan and Indonesia, where the report said that transmission was out of control, although the problem is most critical in sub-Saharan Africa.
The Secular response
“Freedom” is one of the core principles in the capitalist ideology. They therefore shy away from advising people to avoid those behaviours likely to lead to HIV infection. They prefer to try to find ways to perform the various risky behaviours that they want to practice, but with a modicum of protection.
Practically speaking this means the promotion of condom use, and the provision of clean needles and syringes to drug addicts so that they do not need to share. These principles have been the lynch pins of strategies aimed at preventing the spread of HIV in the Western world. These approaches are increasingly being peddled to the developing world as the solution.This has not worked at all so far. While condoms are believed to be protective and the provision of clean needles may well limit the risk of transmission, it is naïve to expect uneducated drug addicts to be responsible, and condoms do not provide full proof protection. If these are really the only preventative measures that can be offered, failure is assured and the virus will continue to spread. This is an issue that many in the west are starting to acknowledge.
Jim Yong Kim, head of the WHO’s HIV/Aids program, said in reference to the G8’s pledge to pump more money into getting wide spread access to anti-retroviral drugs that this is more to do with social change rather than administering better pharmaceuticals. “Treatment is not rocket science,” he said “prevention is rocket science”.
Cause
The cause behind the increase of promiscuity & drug taking in society here and everywhere in the world is concepts of Freedom & Benefit.Destroys any type of morality people haveIndecency & fornication are norms in West e.g. office environment. Places like Indian subcontinent are catching up, traditional values eroding.This is occurring due to concepts of personal freedom, freedom of ownership and benefit as the criterion for actions.Let us look at the cause behind this – idea of Freedom.
They believe in 4 Freedoms – Freedom of belief, expression, ownership and personal freedom
Personal Freedom
The fourth type of freedom which the Capitalist system calls for and works to achieve and protect is the personal freedom. According to this system, every human being has the right to live his private life as he wishes unless he transgresses against the private lives of other people. He has the right to marry or to have an extra-marital relationship with any woman as long as it is done with her consent.He has the right to practice sexual perversion as long as this practice does not involve a minor. Also, he has the right to eat, drink and wear whatever he wants within the public laws. For these Capitalists, the concept of halal and haram does not exist when it comes to personal conduct, as long as the person behaves lawfully, and "lawful behaviour" in the Capitalist societies is subject to disparity from one society to another and from one time to another.
Religion has no influence upon this freedom. The system is detached from religion according to the Capitalist ideology. As a result of applying this type of freedom in the Capitalist societies, immorality has spread. Men and women live together without any legal relationship, and even men and women have partners of the same sex and establish abnormal relationships amongst themselves under the protection of the law.The personal and sexual perversions that prevail in the Capitalist societies result from personal freedom which has also led to unbelievable conflicts. Pornographic magazines and movies, sex phone lines, and nude bars are just a few examples of the abnormalities and perversions which the Capitalist societies have degenerated to as a result of personal freedom. The evident disparity between one Capitalist society and another in the practice of this freedom results from the origin of the Capitalist societies and their gradual application of the Capitalist ideology.
The Capitalist societies were established on the ruins of the Feudal system and the traditions and culture upheld by the Church. Because it was impossible to change these traditions overnight, the Capitalists were divided among themselves. One group pushed to immediately abandon these traditions, whilst another group called for removing the old traditions and culture gradually by taking into consideration the reality of the societies and the prevalent culture and traditions at the time. Those who called for the immediate practice of freedom were called Liberals, and those who called for the gradual application of freedom were called Conservatives. Another intermediate group has surfaced between these two groups who were called Moderates. This "Middle Group" was also divided; some of them were more inclined to the Conservatives and were called Rightists, and some of them were more inclined to the Liberals and were called Leftist. The Capitalist societies still have these classifications of groups today.
A Muslim is not allowed to accept personal freedom because it allows what Allah has forbidden, even aside from it being a source of various social diseases. Personal freedom is the freedom of fornication, sexual perversion, immorality, drinking alcohol, and other diseases.
Allah swt says;
“And those who disbelieve, their actions are like a mirage in a desert. The thirsty one thinks it to be water, until he comes up to it, he finds it to be nothing, but he finds Allah with him, Who will pay him his full due (hell). And Allah is swift in taking account.”
[Nur: 39]
He (Sallallahu Alaihi Wasallam) also said:
“Two categories of people I have not seen them (yet): some people who hold whips like the tails of the cows by which they lash the people. And women who wear (clothes) but (are) half-naked, bending (their bodies) and bending the sight of the men to them. Their heads are like the tilted humps of the camels. These women will not enter the paradise nor will they experience its smell (odour), though its odour is felt at a distance of so and so (days)”
[Muslim].
Islamic alternative
The Islamic social system properly applied, holds the long-term solution to the problem of HIV. It constructs a society that heavily emphasises the importance of marriage prior to sexual relations, even prescribing penalties on those who transgress such boundaries. The resulting society would therefore have a particular complexion. The society would be founded on a number of principles.Firstly, an Islamic State would create an atmosphere conducive for taqwa (consciousness of Allah [swt]) to thrive. Islamic codes contain certain etiquettes, which guard against inappropriate social relationships. These include dress regulations and arrangement of private buildings.
Allah swt says;
“Tell the believing men to lower their gaze, and protect their private parts. That is purer for them. Verily, Allah is All Aware of what they do. And tell the believing women to lower their gaze and protect their private parts."
[TMQ An-Nur : 30-31].
Abu Hurairah reported that the Prophet (Sallallahu Alaihi Wasallam) said, “When a person commits fornication there goes out of him the Iman (belief) and it hovers like a canopy over his head and when he quits this act the Iman reverts to him again”
[Tirmidhi & Abu Dawud]
It has been narrated by Abu Musa al-Ashari that the Messenger of Allah (Sallallahu Alaihi Wasallam) said, “Any women that uses perfume and walks past men in order for them to smell her fragrance; she is a fornicator”
[Tirmidhi & Abu Dawud].
The Shari’ah prevents khulwa (seclusion) between men and women. The reality of khulwa is that it makes the man and woman more sexually agitated. By prohibiting this solitary privacy a cause of corruption is eliminated, because the khulwa is one of the direct means to corruption.
Jabir ibn Abdullah narrated that the Prophet (Sallallahu Alaihi Wasallam) said,
“Whosoever believes in Allah and the Last Day (Al-Yawm al-Akhir) let him not be alone with a woman who has not a Mahram (male relative who she cannot marry) with her. Indeed, the third (person) is al-Shaytan!”
[Ahmad]
Taqwa & public opinion – quote of Umar – Those who are not corrected by the Taqwa are corrected by the Sultan (authority).
The Islamic punishment system enforces these rules;
“The woman and man guilty of illegal sexual intercourse, flog each of them with a hundred stripes."
[TMQ An Nur: 2]
Narrated by Jabir bin Abdullah Al-Ansari: a man from the tribe of Bani Aslam came to Allah's Messenger (salAllahu alaihi wasallam) and informed him that he had committed illegal sexual intercourse and he bore witness four times against himself. Allah's Messenger (salAllahu alaihi wasallam) ordered him to be stoned to death, as he was a married person.
(Sahih Al-Bukhari, vol 8, Hadith no 805).
Homosexuality
From Ikrimah from ibn Abbas who said: The Messenger of Allah (saw) said: “Whoever you find doing the action of the people of Lut, kill the doer and the one to whom it is done” [it is narrated by the five excep An-Nisai]As for Ijma as-Sahabah, the Sahabah differed in the style of killing the homosexual; however, they had a consensus (ijma) on killing him.
Al-Bayhaqi extracted from Ali (ra) that he stoned a homosexual, and Al-Bayhaqi extracted from Abu Bakr that he gathered the people in the concerning a man who was married just as women are married and he asked the companions of the Messenger of Allah (saw) about that. The most severe among them on that day was Ali (ra). He said: ‘No nation among the nations has disobeyed with this sin except one nation with whom Allah did what you know. We view that we should burn them with fire.’
And Ja’far bin Muhammad narrated from his father from Ali in other than this incident who said: ‘He is stoned then burnt with fire.’Al-Bayhaqi extracted from ibn Abbas that he was asked about the hadd of the homosexual and said: ‘The highest building in the town is looked for then he is thrown from it upside down, then he is followed by stones.’ And it narrated from Ali: ‘He is killed by the sword then burnt due to the enormity of the sin.’ Umar and Uthman adopted ‘that a wall is thrown upon him.’ All these opinions collectively indicate killing even if they differ on the style of killing.
Marriage
Finally, Islam encourages marriage at a young age if possible, and seeks to remove the obstacles to this.“Oh you who are young. Whoever amongst you can afford to marry should marry, because it will help him refrain from looking at other women, and guard his modesty (i.e. private parts from unlawful sex). And whoever is not able to marry he should fast because it will protect him”
[Muslim].
Abu Hurairah (ra) narrates that the Prophet (Sallallahu Alaihi Wasallam) said: "Three (persons) have a right from Allah to be helped: the Mujahid in the way of Allah, the seeker for marriage who wishes to guard his chastity and the slave who seeks funds to free oneself."The upshot of the Islamic social system regarding marriage is that young people would not have casual affairs but make strong commitments before engaging in sexual relationships. This is likely to go a long way in preventing the spread of HIV. In contrast with some major religions, it does not prohibit barrier contraception, which could be seen as the last protection against the spread of HIV rather than the only protection.
As for the injecting of drugs, intoxicants are absolutely prohibited in Islam and an Islamic social system would seek to eradicate drug use among its people. This would start with the cultivating of the individuals taqwa and creation of an Islamic atmosphere in society, but would proceed to an uncompromising crack down on the producers and dealers of drugs. It should be remembered that the medical name for heroine is diamorphine, which is used in many medical conditions and is currently in short supply (Britain’s National Health Service recently went through a national shortage, some hospitals running out altogether). Therefore such produce does not have to be traded illegally though the illegal version ismore profitable.
The Problem of Stigma – the Islamic view
Muslim countries with HIV problems such as Pakistan or Indonesia should cultivate an Islamic environment within their societies and this is the best way to eradicate the spread of HIV in the short and long term. HIV is not a disease exclusively transmitted between homosexuals. It is now possible to contract HIV without performing any action prohibited in Islam, although very unlikely. HIV must not carry a stigma in Islamic societies. If a person has performed a prohibited action it must be proven, otherwise speculation and suspicion is not permitted. If a person has performed a prohibited action and it has been proven, then he should be penalised as proscribed in Islam, but the presence or absence of this infection does not make him or her guilty of any further crime.
In Islam having HIV is not a sin in itself. It is mostly, but not exclusively, transmitted through prohibited actions and it is those actions that should be frowned upon if it is proven that they have been performed, regardless of the transmission of this virus.Seeking a cure – Prophet (saw) said “For every disease there is a cure, so seek the cure”
Conclusion
Eliminating the stigma and cultivating an Islamic society may contribute to controlling the spread of HIV in Islamic lands. Those who have already contracted the virus should be treated with the appropriate medications with compassion.As for the non-Muslim lands, they are likely to continue to suffer hugely until a satisfactory model of an Islamic society can be displayed to them proving its capability to prevent HIV. Strong political leadership in these countries is required to modify behaviours but these political leaders need something to lead with which they do not currently have.
The importance of retroviral drugs and future vaccines should not be over-emphasised. They are needed for those people who currently suffer from the virus, but are not the solution. Even if a vaccine or cure is found, it will inevitably be expensive and there are many terrible eminently treatable infections that plague the developing world and are not treated due to expense or practicality leading to millions of deaths each year. Pharmaceutical companies will not solve this problem.
The Euro/American plan of action involving condoms, clean needles and medication has not worked so far and is unlikely to work in the long run. Total social change is required world wide to help stem the spread of this disease but that must be based on ideas and only the Islamic ideology has a social structure likely to tackle this disease. This is particularly relevant in affected Muslim countries, which should act as leaders by example.These changes are needed immediately because sub-Saharan Africa, standing now as 28 million infected and 2.4 million dead, cannot continue like this for much longer.
Saturday 9 February 2008
Archbishop of Canterbury Rowan Williams
Let Muslims establish the Shariah in their own lands!
The Archbishop of Canterbury Rowan Williams gave an interview to the BBC on 7th February 2008 in which he proposed that some aspects of Shariah law could be incorporated into English law. The responses to his comments have been vitriolic. The media provocatively reported his words that it was ‘unavoidable' that Muslims would have Shariah law in the UK, opening a familiar attack on Islam. Prime Minister Gordon Brown entered the debate saying that laws in Britain should only be based on British values - although where lucrative profits for the City of London are concerned, he is happy to promote Britain as a centre for Shariah compliant finance. A typical response to the William's interview on websites was: "Muslims are running away from this barbaric law which is practiced in their own countries, once here they want to bring this barbaric law with them. If they want this law they could go and live in a country that practices this law."
The perverse irony is that the politicians who make policies that encourage such a hostile climate also make policies to prevent Muslims from establishing the Shariah in the Muslim world. The ‘war on terror' was, in the words of Bush and Blair, to prevent the rise of a Khilafah and Shariah. The support for tyrants who crush all Islamic political opposition has continued for decades for the same purpose. Although Brown said that laws in Britain should only be based on British values, successive western governments have worked to force laws everywhere in the world to be based on secular liberal values.
It is the height of conceit that these politicians, who approved the bloodshed in Iraq and Afghanistan to export this secular system, cry about protecting Britain's traditions and heritage, whilst obstructing the desire in the Muslim world to have laws that reflect their Islamic beliefs, heritage and system. It is this supremacist desire of western governments to enforce western secular values on the Muslim world that is the real problem in the world, and not a fabricated campaign of Muslims to enforce Shariah laws on the people of Britain. In fact, this fabrication of a campaign to establish Shariah in Britain is nothing more than part of a propaganda campaign to justify and fuel Britain's global agenda to prevent the rise of the Caliphate, so as to secure its colonial interests.
To seek to organise marriages and divorce, inheritance, food regulations and personal financial arrangements within our community is not a campaign for the establishment of Shariah. It is to live our lives according to Islam, in a personal space. Yet, some amongst politicians and the media have sought to use this as another Muslim bashing exercise, encouraging an out pouring of abuse against Shariah, and comments that if Muslims want it, they should leave. These events only go to show the inherent intolerance of western liberal values. The irony is that the Islamic Khilafah state protected the rights of minorities and allowed minorities to live according to their laws within their personal lives and religious codes.
Moreover, whilst people will say they do not want to see Shariah punishments in Britain, it is rich of the critics in this society - with its high levels of theft, murder, rape and other crimes - that they lecture Muslims on their choice of law in the Muslim world.
Prejudice is not a new thing for many Muslims in Britain. Xenophobia and the inherent assumption of superiority is part of Europe's tradition. Germany in 1930's and Bosnia in 1990's illustrate the worst of Europe's treatment of minorities. The experience of Blacks and Asians, Jews, Catholics, the Irish and other minority communities' show just how common bad treatment of minorities has been in the UK
So how should Muslim's respond?
We should realise that this media propaganda is a deliberate provocation. This is a means to set people against each other and create fitna (division). We should show the beauty of Islam and the Shariah in our lives and show how Allah has given us a sublime deen, which brings tranquillity to the heart and mind. Such an example, where the Shariah commands us to be good to our neighbours (regardless of race or religion), good to our elders, parents and teachers, to refrain from insulting people's beliefs, is sorely needed. It stands in stark contrast with increasing individualism and selfishness, antisocial behaviour and disrespect, and the freedom to insult and persecute that so characterises western countries today.
In this climate of attacking and smearing Islam we must stand up as a united community and enter into a vigorous debate with the way of life in the west i.e. secularism. For it is not merely that they attack Islam, it is also that they are blind to the flaws that exist in this secular system that they export across the world. While they resort to abuse and insults we should follow the example of our Prophet (SAW) and show the flaws and wrongs of western secularism that has brought so much misery to the people of the world. Rampant materialism, a widening wealth gap, individualism, rape, child abuse, racism, occupation and oppression are the fruits of a world ruled by man's freedom to do whatever he pleases. The secular age of man has been arguably the most bloody in human history.
Secondly, we should continue to join the work to establish the Shariah in the Muslim world. Britain is where so much anti-Shariah and anti-Islam propaganda is created and exported. We need to counter this propaganda by illustrating the great weaknesses in the secular model that is so often immorally exported at the barrel of a gun, or as a condition to humanitarian aid.
The Messenger of Allah (saw) and his companions, may Allah be pleased with them all, faced such propaganda and worse during 13 years in Makkah. They restricted their response to words, arguments and a battle of ideas without raising a finger in action. This is the battle that the enemies of Islam fear, and why they attack with smear, exaggeration, insults and hate speech.
Our goal, dear brothers and sisters, is to voice the message of Islam strongly to those around us, and to stay close to Allah (swt) seeking His Help at all times.
وَإِن تَوَلَّوْاْ فَاعْلَمُواْ أَنَّ اللّهَ مَوْلاَكُمْ نِعْمَ الْمَوْلَى وَنِعْمَ النَّصِيرُ
And if they turn away [from righteousness], know that Allah is your Protector - [and] how excellent a Protector and how excellent a Helper!
(TMQ al - Anfal 8:40)
Thursday 31 January 2008
Kenya
What is happening in Kenya?
The results were delayed for more than a day, at a time when ODM candidate Raila Odinga was leading
Many thousands of people seem to have only voted in the presidential election but not the parliamentary or local polls held at the same time
Some of these results came from areas known to be pro-Kibaki
In the parliamentary race, Mr Odinga's ODM won twice as many seats as Mr Kibaki's Party of National Unity (PNU)
Results in some constituencies were different when announced nationally, to when they had previously been announced locally
The head of the election commission has admitted that turnout in one constituency was 115%.
Kenya's opposition Orange Democratic Movement (ODM) claims that last month's election was rigged in favour of President Mwai Kibaki. Protests have led to over 900 deaths nationwide and more than 250,000 people have fled their homes.
According to the official results, Mr Kibaki won with a tiny margin of 230,000 votes out of a total cast of some 10 million. There were various discrepencies in the elections, such as:
The results were delayed for more than a day, at a time when ODM candidate Raila Odinga was leading
Many thousands of people seem to have only voted in the presidential election but not the parliamentary or local polls held at the same time
Some of these results came from areas known to be pro-Kibaki
In the parliamentary race, Mr Odinga's ODM won twice as many seats as Mr Kibaki's Party of National Unity (PNU)
Results in some constituencies were different when announced nationally, to when they had previously been announced locally
The head of the election commission has admitted that turnout in one constituency was 115%.
Opinion polls conducted by Steadman prior to the election indicated that Raila was ahead and his ODM was more popular than the PNU. It is likely that President Mwai Kibaki manipulated the results in order to remain in power.
It is important to understand the background of both parties and their allegiences.
I) The Party of National Unity (PNU) headed by the incumbent president Mwai Kibaki. This group actually is an alliance for the following groups:
1. National Rainbow Coalition-Kenya: This is Kibaki’s original party.
2. The Democratic Party (DP)
3. Kenya African National Union (KANU)
4. Forum for the Restoration of Democracy-Kenya.
5. Forum for the Restoration of Democracy-People.
6. Shirikisho Party of Kenya.
7. TIP
8. Safina
9. Sisi Kwa Sisi
10. Agano
Most of these ten parties are led by the regional tribal leaders. This alliance was hastily cobbled up just before the general elections because Kibaki feared that chances of his NARC party winning the polls alone were slim. He therefore forged this alliance under a single umbrella to face the opposition as a unified front.
II) The Opposition Alliance: The Orange Democratic Movement (ODM) which split into three outfits:
1. The Orange Democratic Movement is the main group and the strongest of the alliance. This is led by Raila Odinga who is the Opposition Leader who is form Lou, the second largest tribe in Kenya. He was chosen to head the party in its conclave held recently and nominated to be the opposition candidate for the Kenyan presidency in the ensuing elections. Immedeately on being elected leader, Odinga took the initiative to foster cordial relations with all his 5 rivals whom he had defeated at the party conference. This was designed to put forward a unified opposition front as these rival leaders represented various tribes as follows:
A. Musalia Mudavadi, the former Vice President represented the Luhya tribe which is the 3rd largest tribe on Kenya.
B. William Ruto, was the right hand man of the former president Moi. He represents the Kanenjin tribe.
C. Najeeb Bala’la’, a Muslim of the Yemeni (Hadhrami) origin. He is a strong supporter of Raila Odinga within the Orange Democratic Movement (ODM).
C. Najeeb Bala’la’, a Muslim of the Yemeni (Hadhrami) origin. He is a strong supporter of Raila Odinga within the Orange Democratic Movement (ODM).
D. Joseph Niagah, who although belongs to the Kikuyu tribe of the current president, yet is in the opposition.
E. Charity Ngilu, is from the Kamba tribe who heads the NARC alliance which actually brought Kibaki to the presidency. She then joined the opposition.
Raila won the nomination to head the oppostion alliance thanks to the American support which is evident from the statements of the US Ambassador who called upon the voters to back the “youth” , indicating Raila who is many years junior to Kibaki. It is known that Kibaki who inspite of his previous British loyalties, was closer to the US in his tenure as president during 2002-2005 and the US had hoped to lure him to its ways especially after his US visit in 2003.
Britain on its part had foisted its own men around the president by using the ‘carrot and stick’ tactics. This campaign for Britain was carried out by the former president Moi who is a bastion of the British politics in Kenya: Moi thretened to start an intensive campaign to expose Kibaki’s corrupt practices, at the same time he offered to support him in the next prsendential elections. Moi convinced him that the current public opinion was against the US and cited the results of the 2005 referendum on the draft constitution prepared by Kibaki which went against him. Kibaki was convinced that the people and their votes were with Moi and thereby the British loyalists and if he went wioth them, he can be assured of a second presidential term.
Thus by using the threat of exposure and incentive for a second term, Britain ensured that since 2005, Kibaki reverted back to his original loyalty.This prompted the US to back Raila as Kibaki’s rival. Consequently, the alliance in power started a massive campaign against Raila and the US as follows:
A. The government charged Raila that he promised the Americans to establish their military base in Kenya.
B. The government refused to allow American observers for elections from the Carter Center while permitting only EU deputed observers.
B. The government refused to allow American observers for elections from the Carter Center while permitting only EU deputed observers.
C. Newton Kulundu, the Labour Minister in the government charged the US of ignoring the Human rights and liberties aspirations of the Third World and cited the Guantanamo and Abu Ghuraib incidents. This infuriated the US Ambassador so much so that he refused to shake hands with Kulundu.
D. The government supporters organised a protest at the site of the 1998 US embassy blasts and raised anti-American slogans.
2. The Orange Democratic Movement-Kenya (ODM-K) is led by Kalonzo Musyoko, a conservative christian with links to the former president Moi and belongs to the 5th largest Kenyan tribe of Kamba. It may be recalled that Kalonzo had split from the original ODM before its conference where Raila was elected its leader. He his regarded by most local observers as a government agent sent to the opposition in order to cause disruption in its ranks and confuse the voters due to the similarity in the names and their election symbols. Kalonzo has so far only succeeded in getting a few leaders to his party from his own tribe. His party is therefore regarded as a mere tribal entity.
3. Kenya African National Union (KANU) has further split into two factions:
1. Faction led by Uhuru Kenyatta the younger son of the first Kenyan president Jomo Kenyatta. He has little political expertise but belongs to the largest Kenyan tribe of Kikuyu. He is widely regarded as a pawn in the hands of the former president Moi. Until recently, Uhuru was in the opposition ODM even during the referendum on the new draft constitution in November 2005, but switched his loyalties to the current president Kibaki under pressure from former president Moi. As a result, the ODM movement was reduced to being a single party rather than an alliance.
2. The new Kenya African National Union (KANU) led by Nicholas Biwott, who is a right-hand man of Moi. There wer persistent rivalries between Biwott and Uhuru, but were sorted out by Moi to unify the KANU.
Raila is the strongest opponent of Kibaki who was nominated by the ODM as the presidential candidate. This is why Kibaki spared no effort to engineer a split in the ranks of the ODM with the help of former president Moi. Hence the opposition charged Kibaki of allying with a dictator.
Both Kibaki and Moi are from the British Imperialist background are working to keep Kenya under the British influence and to isolate Raila who appears to harbour American loyalty. They regard him as dangerous for the British influence as he is an impressive orator who can sway the people with his eloquent speaking skills.
This is another example of the turmoil created by the meddling of the Western powers in Africa, a rich continent destroyed by the greed of the colonialists.
Thursday 24 January 2008
World Aids day
World Aids day - an Islamic perspective
• December 1st was World Aids Day, we have seen in the newspapers and on TV screens a lot of discussion about HIV & Aids
• Let us look at this subject to understand its reality and look at the Islamic solution to the problem of HIV & Aids.
• HIV stands out in respect of its prevention. It is one of the most notorious infectious diseases around today, with good reason, as it is currently incurable. Although, it’s disease progression in an individual can be significantly slowed down.
• The uniqueness of HIV is in its transmission. It is a virus that must pass from person to person through the exchange of significant quantities of bodily fluids, primarily sexual fluid or blood.
• These fluids do not ordinarily transfer from person to person except through the undertaking of specific activities over which an individual normally has control. The main methods of transmission amongst adults are via sexual intercourse or the sharing of needles that enter the blood stream of sequential individuals. The sharing of needles primarily occurs during the use of recreational drugs such as heroine.
• A safe assertion may be made that if a healthy adult avoids certain high risk activities, the probability of contracting HIV are miniscule. If two people of the opposite gender marry, and are faithful to each other for the rest of their lives, their risk of contracting HIV through sexual activity is negligible. HIV in children is usually transmitted during childbirth from an infected mother. There are various techniques that can be used to prevent this vertical spread. However, it is simple reality that if adults do not have HIV, children could not get it either.
• The UN has reported that rates of HIV throughout the world are reaching previously unprecedented levels, estimated to be 40 million people infected worldwide. There were over 4 million new cases in the last year, 700 000 of which were in children. Current boom areas are Pakistan and Indonesia, where the report said that transmission was out of control, although the problem is most critical in sub-Saharan Africa.
The Secular response
“Freedom” is one of the core principles in the capitalist ideology. They therefore shy away from advising people to avoid those behaviours likely to lead to HIV infection. They prefer to try to find ways to perform the various risky behaviours that they want to practice, but with a modicum of protection.Practically speaking this means the promotion of condom use, and the provision of clean needles and syringes to drug addicts so that they do not need to share. These principles have been the lynch pins of strategies aimed at preventing the spread of HIV in the Western world. These approaches are increasingly being peddled to the developing world as the solution.
This has not worked at all so far. While condoms are believed to be protective and the provision of clean needles may well limit the risk of transmission, it is naïve to expect uneducated drug addicts to be responsible, and condoms do not provide full proof protection. If these are really the only preventative measures that can be offered, failure is assured and the virus will continue to spread. This is an issue that many in the west are starting to acknowledge.Jim Yong Kim, head of the WHO’s HIV/Aids program, said in reference to the G8’s pledge to pump more money into getting wide spread access to anti-retroviral drugs that this is more to do with social change rather than administering better pharmaceuticals. “Treatment is not rocket science,” he said “prevention is rocket science”.
Cause
The cause behind the increase of promiscuity & drug taking in society here and everywhere in the world is concepts of Freedom & Benefit.Destroys any type of morality people haveIndecency & fornication are norms in West e.g. office environment. Places like Indian subcontinent are catching up, traditional values eroding.This is occurring due to concepts of personal freedom, freedom of ownership and benefit as the criterion for actions.Let us look at the cause behind this – idea of Freedom. They believe in 4 Freedoms – Freedom of belief, expression, ownership and personal freedom
Personal Freedom
The fourth type of freedom which the Capitalist system calls for and works to achieve and protect is the personal freedom. According to this system, every human being has the right to live his private life as he wishes unless he transgresses against the private lives of other people. He has the right to marry or to have an extra-marital relationship with any woman as long as it is done with her consent.He has the right to practice sexual perversion as long as this practice does not involve a minor. Also, he has the right to eat, drink and wear whatever he wants within the public laws. For these Capitalists, the concept of halal and haram does not exist when it comes to personal conduct, as long as the person behaves lawfully, and "lawful behaviour" in the Capitalist societies is subject to disparity from one society to another and from one time to another.
Religion has no influence upon this freedom. The system is detached from religion according to the Capitalist ideology. As a result of applying this type of freedom in the Capitalist societies, immorality has spread. Men and women live together without any legal relationship, and even men and women have partners of the same sex and establish abnormal relationships amongst themselves under the protection of the law.The personal and sexual perversions that prevail in the Capitalist societies result from personal freedom which has also led to unbelievable conflicts. Pornographic magazines and movies, sex phone lines, and nude bars are just a few examples of the abnormalities and perversions which the Capitalist societies have degenerated to as a result of personal freedom. The evident disparity between one Capitalist society and another in the practice of this freedom results from the origin of the Capitalist societies and their gradual application of the Capitalist ideology.
The Capitalist societies were established on the ruins of the Feudal system and the traditions and culture upheld by the Church. Because it was impossible to change these traditions overnight, the Capitalists were divided among themselves. One group pushed to immediately abandon these traditions, whilst another group called for removing the old traditions and culture gradually by taking into consideration the reality of the societies and the prevalent culture and traditions at the time. Those who called for the immediate practice of freedom were called Liberals, and those who called for the gradual application of freedom were called Conservatives. Another intermediate group has surfaced between these two groups who were called Moderates. This "Middle Group" was also divided; some of them were more inclined to the Conservatives and were called Rightists, and some of them were more inclined to the Liberals and were called Leftist. The Capitalist societies still have these classifications of groups today.
A Muslim is not allowed to accept personal freedom because it allows what Allah has forbidden, even aside from it being a source of various social diseases. Personal freedom is the freedom of fornication, sexual perversion, immorality, drinking alcohol, and other diseases.
“And those who disbelieve, their actions are like a mirage in a desert. The thirsty one thinks it to be water, until he comes up to it, he finds it to be nothing, but he finds Allah with him, Who will pay him his full due (hell). And Allah is swift in taking account.”
[Nur: 39]
He (Sallallahu Alaihi Wasallam) also said:
“Two categories of people I have not seen them (yet): some people who hold whips like the tails of the cows by which they lash the people. And women who wear (clothes) but (are) half-naked, bending (their bodies) and bending the sight of the men to them. Their heads are like the tilted humps of the camels. These women will not enter the paradise nor will they experience its smell (odour), though its odour is felt at a distance of so and so (days)”
[Muslim].
Islamic alternative
The Islamic social system properly applied, holds the long-term solution to the problem of HIV. It constructs a society that heavily emphasises the importance of marriage prior to sexual relations, even prescribing penalties on those who transgress such boundaries. The resulting society would therefore have a particular complexion. The society would be founded on a number of principles.
Firstly, an Islamic State would create an atmosphere conducive for taqwa (consciousness of Allah [swt]) to thrive. Islamic codes contain certain etiquettes, which guard against inappropriate social relationships. These include dress regulations and arrangement of private buildings.
“Tell the believing men to lower their gaze, and protect their private parts. That is purer for them. Verily, Allah is All Aware of what they do. And tell the believing women to lower their gaze and protect their private parts."
[TMQ An-Nur : 30-31].
Abu Hurairah reported that the Prophet (Sallallahu Alaihi Wasallam) said,
“When a person commits fornication there goes out of him the Iman (belief) and it hovers like a canopy over his head and when he quits this act the Iman reverts to him again”
[Tirmidhi & Abu Dawud]
It has been narrated by Abu Musa al-Ashari that the Messenger of Allah (Sallallahu Alaihi Wasallam) said,
“Any women that uses perfume and walks past men in order for them to smell her fragrance; she is a fornicator”
[Tirmidhi & Abu Dawud].
The Shari’ah prevents khulwa (seclusion) between men and women. The reality of khulwa is that it makes the man and woman more sexually agitated. By prohibiting this solitary privacy a cause of corruption is eliminated, because the khulwa is one of the direct means to corruption.
Jabir ibn Abdullah narrated that the Prophet (Sallallahu Alaihi Wasallam) said,
“Whosoever believes in Allah and the Last Day (Al-Yawm al-Akhir) let him not be alone with a woman who has not a Mahram (male relative who she cannot marry) with her. Indeed, the third (person) is al-Shaytan!”
[Ahmad]
Taqwa & public opinion – quote of Umar – Those who are not corrected by the Taqwa are corrected by the Sultan (authority).
The Islamic punishment system enforces these rules
“The woman and man guilty of illegal sexual intercourse, flog each of them with a hundred stripes."
[TMQ An Nur: 2]
Narrated by Jabir bin Abdullah Al-Ansari: a man from the tribe of Bani Aslam came to Allah's Messenger (salAllahu alaihi wasallam) and informed him that he had committed illegal sexual intercourse and he bore witness four times against himself. Allah's Messenger (salAllahu alaihi wasallam) ordered him to be stoned to death, as he was a married person.
(Sahih Al-Bukhari, vol 8, Hadith no 805).
Homosexuality
From Ikrimah from ibn Abbas who said: The Messenger of Allah (saw) said:
“Whoever you find doing the action of the people of Lut, kill the doer and the one to whom it is done”
[it is narrated by the five excep An-Nisai]
As for Ijma as-Sahabah, the Sahabah differed in the style of killing the homosexual; however, they had a consensus (ijma) on killing him. Al-Bayhaqi extracted from Ali (ra) that he stoned a homosexual, and Al-Bayhaqi extracted from Abu Bakr that he gathered the people in the concerning a man who was married just as women are married and he asked the companions of the Messenger of Allah (saw) about that. The most severe among them on that day was Ali (ra). He said: ‘No nation among the nations has disobeyed with this sin except one nation with whom Allah did what you know. We view that we should burn them with fire.’
And Ja’far bin Muhammad narrated from his father from Ali in other than this incident who said: ‘He is stoned then burnt with fire.’Al-Bayhaqi extracted from ibn Abbas that he was asked about the hadd of the homosexual and said: ‘The highest building in the town is looked for then he is thrown from it upside down, then he is followed by stones.’ And it narrated from Ali: ‘He is killed by the sword then burnt due to the enormity of the sin.’ Umar and Uthman adopted ‘that a wall is thrown upon him.’ All these opinions collectively indicate killing even if they differ on the style of killing.
Marriage
Finally, Islam encourages marriage at a young age if possible, and seeks to remove the obstacles to this.
“Oh you who are young. Whoever amongst you can afford to marry should marry, because it will help him refrain from looking at other women, and guard his modesty (i.e. private parts from unlawful sex). And whoever is not able to marry he should fast because it will protect him”
[Muslim].
Abu Hurairah (ra) narrates that the Prophet (Sallallahu Alaihi Wasallam) said:
"Three (persons) have a right from Allah to be helped: the Mujahid in the way of Allah, the seeker for marriage who wishes to guard his chastity and the slave who seeks funds to free oneself."
The upshot of the Islamic social system regarding marriage is that young people would not have casual affairs but make strong commitments before engaging in sexual relationships. This is likely to go a long way in preventing the spread of HIV. In contrast with some major religions, it does not prohibit barrier contraception, which could be seen as the last protection against the spread of HIV rather than the only protection.As for the injecting of drugs, intoxicants are absolutely prohibited in Islam and an Islamic social system would seek to eradicate drug use among its people. This would start with the cultivating of the individuals taqwa and creation of an Islamic atmosphere in society, but would proceed to an uncompromising crack down on the producers and dealers of drugs. It should be remembered that the medical name for heroine is diamorphine, which is used in many medical conditions and is currently in short supply (Britain’s National Health Service recently went through a national shortage, some hospitals running out altogether). Therefore such produce does not have to be traded illegally though the illegal version ismore profitable.
The Problem of Stigma – the Islamic view
Muslim countries with HIV problems such as Pakistan or Indonesia should cultivate an Islamic environment within their societies and this is the best way to eradicate the spread of HIV in the short and long term. HIV is not a disease exclusively transmitted between homosexuals. It is now possible to contract HIV without performing any action prohibited in Islam, although very unlikely. HIV must not carry a stigma in Islamic societies. If a person has performed a prohibited action it must be proven, otherwise speculation and suspicion is not permitted. If a person has performed a prohibited action and it has been proven, then he should be penalised as proscribed in Islam, but the presence or absence of this infection does not make him or her guilty of any further crime.
In Islam having HIV is not a sin in itself. It is mostly, but not exclusively, transmitted through prohibited actions and it is those actions that should be frowned upon if it is proven that they have been performed, regardless of the transmission of this virus.Seeking a cure – Prophet (saw) said “For every disease there is a cure, so seek the cure”
Conclusion
Eliminating the stigma and cultivating an Islamic society may contribute to controlling the spread of HIV in Islamic lands. Those who have already contracted the virus should be treated with the appropriate medications with compassion.As for the non-Muslim lands, they are likely to continue to suffer hugely until a satisfactory model of an Islamic society can be displayed to them proving its capability to prevent HIV. Strong political leadership in these countries is required to modify behaviours but these political leaders need something to lead with which they do not currently have.
The importance of retroviral drugs and future vaccines should not be over-emphasised. They are needed for those people who currently suffer from the virus, but are not the solution. Even if a vaccine or cure is found, it will inevitably be expensive and there are many terrible eminently treatable infections that plague the developing world and are not treated due to expense or practicality leading to millions of deaths each year. Pharmaceutical companies will not solve this problem.
The Euro/American plan of action involving condoms, clean needles and medication has not worked so far and is unlikely to work in the long run. Total social change is required world wide to help stem the spread of this disease but that must be based on ideas and only the Islamic ideology has a social structure likely to tackle this disease. This is particularly relevant in affected Muslim countries, which should act as leaders by example.These changes are needed immediately because sub-Saharan Africa, standing now as 28 million infected and 2.4 million dead, cannot continue like this for much longer.
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