Most read articles
Across Borders
I read a LinkedIn post by a someone saying that he is part of a growing group of professionals living and working across several countries in the Middle East. No doubt this is a healthy development for the region. It denotes the creation of regional enterprises and regional investment vehicles and clusters. It also indicates that Arab societies are opening up and are becoming more accepting of the “other”. Many of the Arab World’s challenges can only be addressed via regional initiatives, with water and food security dominating. Crossing boundaries to transact trade, learn, and discover has been part of the human experience for as long as we were able to document our histories. That was the positive side of crossing borders. The other side was more atrocious. Wars to conquer and pillage and subjugate, with ramifications of such acts of aggression still with us today. Crossing borders in the 1980s was called globalization – a trend that accelerated with the end of the Cold War, the ease of travel, the primacy of the Chicago School of untrammeled free trade and free markets (aka minimum regulation), and the politics of borrow and spend – by everyone: governments, companies, and individuals. Globalization, as an economic concept, was sold to the middle and working classes in the West as improving their consumer choices in terms of quality and price. Also, improving the earnings of companies they work for and that their pension plans own shares in. The other promise made was investments in upgrading the skills of the middle and working classes so they can graduate to producing higher value-added products, with jobs to replace those lost to middle and working classes in Developing Countries. The latter did not materialize in meaningful ways and the massive economic letdown suffered by the middle and working classes in many countries spawned extremist politics, fueled by identity issues and nationalism. Brexit was one result. Trump’s presidential win and the ensuing political divide within the United States is another. When one is thrust upon new horizons, the move up the learning curve can be steep. Learning to speak the language of a new place may not prove to be an easy exercise. It is not so much the language of the letters that we need to learn but that of the soul, the mind and the spirit. These are the levers that we use to negotiate the structures of our relationships and the parameters within which our relationships function. Human relationships are tender constructs. They can be forged with blood, sweat and tears or with something as simple and powerful as a smile or a handshake. And they are malleable. The same bonds that can break with the first drops of rain can sustain Mount Ararat. Human relationships are the veins and arteries of our universe. They are the conduits through which we live and breathe. And through them, we connect to the quarries of our souls and mine the seams of whatever is good in our lives. They are too precious to be subjected to the withering winds of whims, prejudices and greed.
Majd Shafiq
Aug 30, 2022 · 3 min read
Islamic Finance in Jordan
Many years ago I was an undergraduate student at the back then only university in the UAE - the United Arab Emirates University in Al Ain. For those who remember Al Ain in the early 1980s, it was an oasis in more ways than one. Two hours inland by car from both Abu Dhabi and Dubai, Al Ain’s greenery and water fountains, its cool breezes, and friendly social life gave living there a special flavor. Back then we did not have internet or streaming services, or satellite TV for that matter. My windows to the world were two publications in print form: the Atlantic Monthly magazine, and a great daily newspaper called the International Herald Tribune. Both reached me in Al Ain by regular mail several days, or weeks, late. The print edition of the Tribune was an amalgamation of articles from the New York Times, the LA Times and other media. It was principally sold outside the United States - in Europe, the Middle East and other geographies. It spoke to a global, English speaking audience and covered politics, economics, finance and had a cultural section detailing latest theater and opera productions, art exhibits by international city, as well as book reviews. It was in the Tribune back then that I read an interview with a western banker working in the Gulf explaining Islamic finance to western readers. The banker, whose name I no longer recall, said that Islam treated money as a medium of exchange and not as a commodity. A medium of exchange can be used to exchange goods and services and benefits (profits) can be had from such exchanges. But, not being a commodity, Islam does not allow for the buying and selling of money for a price (i.e. interest). And that is the key philosophical underpinning of Islamic finance. Globally, Islamic finance started in the 1960s in Pakistan and Egypt, with special banks focused on the agriculture sector giving farmers interest free loans. The Jeddah Conference in 1975 was a milestone and an event that put in place Islamic finance rules and regulations. The establishment of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFO) in 2000 in Bahrain is another major milestone in the development of Islamic finance worldwide. The emergence of Islamic banks, non-bank Islamic finance institutions, and Islamic trusts followed with the setting up of the Dubai Islamic Bank in 1976, Faisal Bank (Saudi and Egypt) in 1977, and the Islamic Bank of Sudan in 1977. In Jordan, the Jordan Islamic Bank was established in 1978 under a temporary law. The Banking Law for the year 2000 had articles (50 to 58) that regulated Islamic banks in the Kingdom, with four Islamic banks currently in operation: Islamic International Arab Bank, Safwa Bank, Jordan Islamic Bank, and Al Rajhi Bank. Additionally, 17 non-bank Islamic finance institutions and 3 Islamic insurance companies offer their services to clients under the supervision of the Central Bank of Jordan. Two main products are used by Islamic banks in Jordan: Murabaha and Ijara. In a Murabaha contract, the bank buys an asset or a commodity and resells it to the client at pre-agreed upon price and time period. The asset or commodity ownership transfers to the client immediately upon sale. In an Ijara (lease) contract, the bank buys an asset or a commodity, leases it to the client, and the client makes monthly payments to the bank over an agreed upon period of time. The ownership of the asset or commodity transfers to the client after the final lease payment. As to sukuks, the legal and regulatory framework in Jordan has been in place since 2014. Sukuks are financial instruments (contracts) between Islamic fund providers and fund users, with three main contracts in use in Jordan: Murabaha and Ijara, as well as Istisna’ (build/construct/manufacture an asset and sell it to a client over time by installments). For funding from Islamic banks in Jordan: As to funding via sukuks in Jordan: The process of obtaining funding from Islamic banks in Jordan starts out with an application submitted by the client, followed by a credit analysis and a cashflow analysis conducted by the bank. Guarantees are also required. These can be Government of Jordan or other third party guarantees, land or real estate, the project or the asset to be financed, or ring fenced cashflows of the project or its owner. For sukuks, a feasibility study is required, coupled with a risk assessment, a prospectus, as well as guarantees. A salient feature of a sukuk issue in Jordan is the Special Purpose Vehicle (SPV) structure. A Special Bylaw regulates the establishment and management of Sukuk SPVs, which are private shareholding companies established with the purpose of separating the financial accounts of the sukuks from those of the issuers of the sukuks. As such, the SPV is an intermediary between the issuer of the sukuks and the investor (sukuk holder). The SPV acts as an agent on behalf of the sukuk holder to collect payments from the issuer (both interim and final payments). The SPV also manages the extinguishing of the sukuks at maturity. The SPV Currently, there is a total of JD 584 million of sukuks outstanding in Jordan, all issued by the Government of Jordan and related entities. These are: Market estimates indicate that the four Islamic banks in Jordan have around JD 2.45 billion in dry powder, with an additional JD 220 million at the 17 non-bank financial institutions, all looking for funding and investment opportunities.
Majd Shafiq
Aug 23, 2022 · 7 min read
Coronavirus Diaries
Jordan's numbers of new infections started increasing dramatically about 3 weeks ago. We are currently averaging around 200 new cases per day. The Government decided to close schools, sending students home to use the Internet for distant learning. Restaurants and cafes are also closed. Government departments are functioning with minimal staff. Companies continue to operate. Friday curfews are gone. Looking at what is happening in the rest of the world - lockdowns and curfews on the rise again, the second wave of the virus almost with us, expected delays in vaccine distribution well into next year - and the ability of this virus to mutate, it seems this new-normal is here to stay for many years to come. I continue to be amazed at the intensity of feelings around the use of protective measures - social distancing, washing hands, and wearing masks. With few exceptions, societies worldwide seem to be divided between those who practice these measures, and those who don't. Those who trust (their governments, the experts), and those who don't. Those who have the frame of reference to understand what a pandemic is, and those who don't. Those who leave their fate to the stars, the throw of the cosmic dice, god, what is destined to be, and those who practice safe living. It is not easy for an individual (or for society, for that matter) to construct a frame of reference that enables one to deal with reality in productive, viable, safe, and rational ways. In Africa, they say "it takes a village." It is the collective interplay of the components of the systems we inhabit that bestow on us, distill in us, our frames of reference - a general frame of reference that we share with others, and an individual frame of reference that is our own. Do our education systems challenge us to learn, or encourage us to dumb-down? Do our political systems catalyze our sense of civic spirit and belief in a set of common goods, or encourage selfishness and disengagement? Do our religions emphasize the value of being "good" in everyday life, or do they emphasize adherence to rituals for their own sake? Do our economic systems impart us with a sense of justice and fairness, or do they operate with a paradigm of live and let die? And our languages ... do they inhibit our thinking and intellectual progress, or do they propel these forth? I have written previously in these Diaries about Wittgenstein and his theory of language. We tend to underestimate the power and impact our languages have on the development and shape of our frames of reference - on our abilities, as individuals and societies, to deconstruct our frames of reference and reconstruct them to deal with and manage constantly changing realities. I was recently reminded of the important function of language while listening to music - highly advisable in these pandemic times. I ran across the National Arab Orchestra, which I've never heard of before. The Orchestra performs the music and song of the years of the recent Arab enlightenment, which sadly did not last long. This was the period after the fall and disintegration of the Ottoman Empire into its constituent national units, and after the Arab nation and peoples attained independence from western colonial powers. It was a period of freedom of the intellect, of the heart and spirit, of art and music - tinged with the hopes and dreams of pluralism and democracy. It was not meant to be. The politics of the Cold War, oil, and religious conservatism took hold of the region, pulling it back and down. One casualty was Arabic language. Arabs lost control of their language and this loss and subsequent neglect meant that Arabic no longer supported, but impeded, the intellectual and spiritual progress of Arabs. The link below is for a recent performance by the National Arab Orchestra of a song by Umm Kulthum, a doyen of Arab music and song from the 1960s and 1970s. It does not take a musicologist to realize that the music of those days far surpass what is currently produced in the Arab World. A song has two main components: language and music. If a language suppresses the heart and spirit, then the resulting music will reflect this. That was not the case in Umm Kulthum's days and Arab music soared. To regurgitate means to re-consume something that one has already ingested. I hope that by re-playing the music of the days of enlightenment, Arabs will find nourishment for the next mile to cross. https://www.youtube.com/watch?v=Q_HoGYhk4x8
Majd Shafiq
Aug 16, 2022 · 4 min read
Of Arabs and Jews
A few months ago, and after years of hesitancy, I started reading Edward Said's Orientalism - a tome of book that was first published in 1978 and has had many reprints since then. A fascinating read of how the West cast the East into a category of something to be conquered, ruled, colonized, subjugated, for its own good - at once, projecting into it and seeing its own image reflected in it. Edward Said, a Palestinian American who was a professor of comparative literature at Columbia, was a pioneer in other ways as well. His intellectual honesty and belief in the importance of clarity and exact thinking (Bertrand Russell) saw his self actualization (Maslow) take him to where two roads diverged in a wood, and he took the one less traveled by... and that has made all the difference, to him and to many of us (Frost). I believe Edward Said's crowning achievement is when he teamed with Daniel Barenboim, the maestro of maestros, to establish the The West–Eastern Divan Orchestra - an orchestra based in Seville, Spain, and consisting of musicians from the Middle East including Egyptians, Iranians, Israelis, Jordanians, Lebanese, Palestinians, Syrians, as well as Spaniards. The West–Eastern Divan Orchestra was founded in 1999 and named after an anthology of poems by Goethe about the Orient - this is where Said's comparative literature background comes in. In 2016, the Barenboim-Said Akademie was established in Berlin, Germany, as a state-accredited music conservatory offering Bachelor of Music degrees and Artist Diplomas. The Akademie's President is Daniel Barenboim who is around 78 years old now. Barenboim said "The Divan is not a love story, and it is not a peace story. It has very flatteringly been described as a project for peace. It isn't. It's not going to bring peace, whether you play well or not so well. The Divan was conceived as a project against ignorance. A project against the fact that it is absolutely essential for people to get to know the other, to understand what the other thinks and feels, without necessarily agreeing with it. I'm not trying to convert the Arab members of the Divan to the Israeli point of view, and [I'm] not trying to convince the Israelis to the Arab point of view. But I want to – and unfortunately I am alone in this now that Edward died a few years ago – ...create a platform where the two sides can disagree and not resort to knives." One particular performance by the West–Eastern Divan Orchestra at the Proms a few years ago caught my attention. Perhaps no other piece of music can best describe the wonderful friendship that Said and Barenboim had than Elgar's Nimrod. Elgar composed his Enigma Variations between 1898 and 1899. The Variations comprise fourteen pieces of music, each inspired by a friend or someone who had a big impact on Elgar's life. Elgar described his fourteen Variations as not being portraits of certain individuals but that each piece of music "contains a distinct idea founded on some particular personality or perhaps on some incident known only to two people." One of those fourteen pieces is Nimrod. Listening to Nimrod, one has to wonder what kind of friendship was this that inspired such spiritual heights in Elgar. No doubt, the kind of friendship that was and is between Edward Said and Daniel Barenboim - a Palestinian and a Jew who managed to find peace together and share it with many. I leave you with Nimrod performed by the mighty Chicago Symphony Orchestra conducted by Barenboim - one of the best recordings of this magnificent piece: https://www.youtube.com/watch?v=sUgoBb8m1eE
Majd Shafiq
Aug 9, 2022 · 3 min read
Borrowed Time
Is it fair to say that we live on borrowed time? To use the concept of borrowing to describe living implies that we took something and have to give it back at some point. In reality, we do not give back our lives after we are done with them. Our lives are more like gifts or grants that we receive and consume to the last drop. And we don't know when that last drop will trickle down. It is not unreasonable to be struck by a sense of panic or despair when we comprehend the fact that life is short. Iris Murdoch pointed out how difficult it is to acknowledge the inevitability of death. And perhaps it is obscene, as Simone de Beauvoir said, that by the time we understand what life is all about, it is over. When one's life is full of beauty and love, the heart is young and the spirit is eager; the burden is lightened. For some, when the quest is over, so is the journey, especially if one's life has had more than its fair share of pain. Frida Kahlo thought so. She also hoped that the exit will be joyful and that she never returns. Others believe in an afterlife and this helps them deal with the reality of the ending of this one. A belief in an afterlife can be a motivator to do good in the here and now. It can also lead to lethargy and inaction or violence and bloodshed. Like any of life's profound concepts, this one too is a double edged sword. How to live our lives is what humanity has been struggling with for millennia. Religions, philosophies, and various schools of thought centered around unearthing and cultivating the good that is inherent within us and taming the evil that seems to have taken permanent residence in our world. Our perceptions of what is good and evil continue to clash and when we are busy feeding and clothing the ones in our care, we do not have enough time left to ponder. We pass the torch on to another generation and hope that their path is less cluttered.
Majd Shafiq
Aug 2, 2022 · 2 min read