Islamic banking offers an example to the western banking system in terms of ethics and long term strategy.
‘The western banking system is currently collapsing and everything is going wrong,’ according to Crans Montana Forum chairman Jean-Paul Carteron, who said the West had a lot to learn from the Islamic system.
Speaking on the sidelines of the Forum’s Central and Europe and Eastern New Economies Strategies with Gulf States event at the Ritz-Carlton Hotel and Spa on April 9, 2008 he said the financial world was now split in two parts with the western system concentrating on short term strategies and quick profit while Islamic finance looked to the long term and acted ethically.
‘The western system is collapsing because banks are run by officers who think they are sitting at the table in a casino,’ he said. ‘Today banks make more profit speculating than they do in investing in real projects. ‘Islamic banking forbids speculation and is based on real projects and that is why it is proving so successful at a time when the western system is in turmoil.
‘It is in this mess because banks chose to lend to the poorest people in the US where millions of people who could not afford mortgages are now losing their homes.’ ‘The basic values of Islamic banking may save the international system because they show how to take a long term investment view, avoid speculation and are not focused on short term profit.’
He said more than 160 representatives from Central and Eastern Europe were taking part in the event because the Middle East was a key market as well as a gateway to Asia and Africa. ‘This is a very good place to do business because the management of public affairs is very positive and organised under very strong values, particularly in business and banking,’ he continued.
‘In terms of banking and finance Bahrain is one of the most respected centres in the world. We have had a lot of support from the government in bringing these people here from what are potentially some of the most dynamic markets in the world.’
He said that he set up the Crans Montana Forum in 1989 to take advantages of the collapse of communism in Eastern Europe and help develop those economies.
But he argued that liberalisation and diversification in the Middle East would see far faster growth because Arab businessmen tended to be far better educated that Eastern Europeans were when they changed their economic system.
TradeArabia News Service, 10 Apr 2008