Islamic Finance and the Afterlives of Development in Malaysia

Abstract

Government regulators, Islamic scholars, finance professionals, and secular academics have recently taken steps to turn Kuala Lumpur, Malaysia's capital, into a global hub for Islamic finance. This article describes some of the actions these actors have taken to position Kuala Lumpur as the central node in this emerging financial system. This article highlights key principles of Islamic finance and the debates in which practitioners are engaged while developing a shariah‐compliant financial system. It shows how these plans draw on previous efforts by the Malaysian state—in part in response to Islamist political critiques—to design techniques for the provision of capital commensurable with both Islam and capitalism. In so doing, Malaysia's Islamic finance project expresses four dimensions of the afterlives of development: the creation of alternative political and economic networks; a managerial role for the state; the creation of new forms of expertise; and the assemblage of religious and economic practices, two domains that earlier efforts toward secular modernization had presumed separate.

Conceptualizing Islamic banking and finance: a comparison of its development and governance in Malaysia and Singapore

“…arguments such as Lai's (2015) 'industrial policy' oriented towards finance, or on the other hand, Mohamad and Saravanamuttu's (2015) 'neoliberal exceptions' and Rudnyckyj's (2014) 'afterlives of development'. With this debate in mind, and as we worked on conceptualizing commonalities and differences in the evolution of IBF, we relied on what Liow (2012) broadly calls a 'neoliberal-developmentalist state'.…”

“…In Malaysia, the rise and governance of IBF specifically has received considerable empirical attention concerning its emergence in the 1980s and its rapid growth in the 1990s and 2000s (e.g. Ariff and Rosly, 2011;Hadiz and Khoo 2011;Haneef 2001;Karim 2010;Lai, 2015;Liow 2009;Mohamad and Saravanamuttu, 2015;Naguib and Smucker, 2010;Nasr 2001;Rudnyckyj, 2014;Tripp, 2006;Venardos 2012;Wilson 1998 In contrast to Malaysia, there has been a distinctive paucity of both theoretical and empirical research on IBF in Singapore. Scholarly and more policy-oriented research on IBF predominantly relates to legal frameworks and governance issues arising from implementing Sharia laws on financial products and implications for compliance and risk management (Chia and Wang 2008;White 2009).…”

“…In examining the governance of IBF then, we demonstrated that the Malaysian government promoted IBF through a changing pattern of Islamic interventionism that we characterised as 'semi-developmental' in the 1980s and 1990s. However, by the early 2000s, the growth of IBF began to increasingly involve, as both Rudnyckyj (2014) and Mohamad and Saravanamuttu (2015) stress, private 'Islamic financial networks' beyond the state. Such networks were shaped however through state support, which may in turn be considered an Islamic and internationalising ordoliberalism, rather than simply 'market rule'.…”

İslami Bankacılık ile Ekonomik Büyüme Arasında Nedensellik İlişkileri(Causality Relations Between Islamic Banking and Economic Growth)

“…Bu başarının temelde dört boyutu vardır: Alternatif politik ve ekonomik ağlar oluşturulması, ülke ekonomisi için yönetsel bir rol üstlenilmesi, yeni uzmanlık şekilleri yaratılması ve dini ve ekonomik anlamda birleştirici uygulamalar yapılması (Rudnyckyj 2014). Malezya'nın gelişmesinde teknokratlarca geliştirilen akılcı planların, gelişmekte olan bir ülkeye oranla çağdaş, iyi düşünülmüş ve bilimsel prensiplere uygun olarak tasarlanmış süreçlerin rolü büyüktür.…”

“…Malezya'nın İslami finans anlayışı dini yasaklarla sofistike finansal hizmetleri gerektiren ekonomik faaliyetleri uzlaştıran bir yapıdadır. İslam dininin yorumlarıyla uyumlu bir çağdaş kapitalizm anlayışı içinde katılımcılık temelinde bir finansal anlayış söz konusudur (Furqani ve Mulyany 2009, Rudnyckyj 2014. Anlamlı test değerleri koyu rakamlarla gösterilmiştir.…”