ISTANBUL: Iran’s president said Monday that capitalist excesses caused the global economic meltdown and are un-Islamic, as leaders at a Muslim forum touted their religion’s banking system a way to revive battered economies.
President Mahmoud Ahmadinejad was among heads of state in Istanbul for a one-day meeting of the Organization of The Islamic Conference, a 57-state bloc of Muslim countries that promotes religious solidarity in economic and other matters.
In an address, Ahmadinejad slammed investments that pay interest, deemed usury by Muslims, and said they had contributed to financial and social problems such as homelessness.
Ahmadinejad did not mention Iran’s struggling economy, nor did he refer to its dispute with the West over its nuclear activities. Iran has said it still wants talks with world powers over fuel supplies to a Tehran nuclear reactor — despite the country’s apparent rejection of a UN plan to curb Iran’s enriched uranium stockpile.
The roughly $1 trillion Islamic finance, with high annual growth over the past decade, has faced difficulties during the global financial crisis but was relatively insulated because of Islam’s ban on handling interest-bearing financial instruments.
The Islamic Development Bank, based in Saudi Arabia, comprises member countries of the Islamic Conference group and provides interest-free loans for infrastructure and other projects. Western institutions such as Britain’s HSBC also now offer products such as Shariah-compliant mortgages and bank accounts.
Developing countries have pointed to the origin of the global meltdown in the United States, where American consumers, the traditional pillar of the world economy, were hurt by the collapse of the housing bubble and the fallout from the credit crunch. Turkey has an Islamic-oriented government but a secular constitution introduced by its national founder, and Western-style banking is the norm.
Turkish President Abdullah Gul, however, spoke on behalf of developing nations in the Organization of the Islamic Conference.
“To ensure the efficient management of the global economy, developing countries must also keep the right to have a say commensurate with their growing economies,” said Turkish president.
The comment echoed demands by emerging economies for more clout in the IMF and World Bank, which met last month in Istanbul.
A shift in the economic power balance was recognized at a Pittsburgh summit in September where the Group of 20, a forum of rich and developing countries, was declared the world’s main economic decision-making forum, instead of the G-7 group of rich countries.
