Origins, Evolution and the Future
- Studies in Islamic Finance, Accounting and Governance series
Chapter 10: Borrowing from the Public: Sukuk
By way of introduction, a personal anecdote In the year 1991, shortly after Operation Desert Storm ended the occupation of Quwait, I received a phone call from the late Muazzam Ali of the Institute of Islamic Banking and Insurance, London, asking me whether I can prepare a paper on the origins and evolution of Ottoman public borrowing. This paper had to be ready in two weeks’ time and presented in Lahore, Pakistan, to no less a person than His Royal Highness Prince Muhammad bin Faisal of Saudi Arabia. Two weeks later I ended up in Lahore and delivered my paper to His Highness, in person. The private seminar was attended also by six Pakistani professors, all Shari’ah experts. My presentation covered more or less an early version of the same topics presented in Chapter 6. After explaining the classical Ottoman instruments of public finance, iltizam and malikane, we focused on esham. The presentation lasted about two hours, which was followed by a rigorous critique by the Pakistani professors. The essence of the discussion was whether esham was usurious. They were claiming that it was and I was disputing their claims. At one point, I felt like being the spokesperson of the long deceased Ottomans! When the seminar finally ended, I was able to tell His Highness how impressed I was of his interest in Ottoman public finance. He was amazed by the naivety of my comment and patiently explained that after the Operation Desert Storm Americans had sold all the...
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