Recent developments in consumer markets show a proliferation of approach by manufacturers and service providers to attract Muslims to buy or subscribe to their offerings by using the “Islam” label.
In most cases, “Islam” or any Arabic words are used to denote the essence of Islamic life and teachings as an adjective to manifest what they offer are Syariah-compliant.
The rapid development of Islamic banking and finance services as well as halal food and consumer goods industry, and the emergence of Islamic tourism and Islamic fashion industry are some of the evidences which support the aforementioned premise.
Commendable is the progress made thus far in various types of industries and services catering to Muslims. In any business, good first impression is important. Thus, products and services with “Islamic labels” or branded as “Syariah-compliant” give an immediate perception to consumers that they conform to Islamic law. In some ways, Syariah-conscious consumers whose lives are defined by the Islamic faith would not face problems in fulfilling their daily needs be it dietary, financial, health-related, lifestyle etc as the so-called halal products and services are easily available to them.
Nevertheless, the rise of manufacturers and producers implementing such practices make us wonder whether the “Islamic” labelling and branding produce an economic atmosphere and a consumer culture that truly echo the Islamic spirit as enjoined in the Quran and prophetic traditions.
In an economic landscape where the values of capitalism remain prevalent and shape the behaviour of the economic actors, we may argue that the use of “Islam” by business entities and corporations is mainly incentivised by the desire to create wealth through profits. This desire is also fuelled by the process of economic globalisation which enables the firms to extend their marketing capabilities transcending national boundaries.
First, let’s take a look at the Islamic banking industry. As one of the fastest growing consumer market segment in the world, Muslim consumers provide great opportunities for businesses worldwide. With a global population of 1.6 billion, Muslims serve as a lucrative market for all industry players.
Over the past decade, the industry has witnessed robust growth worldwide with a strong rate of 15% to 20% annually. Presently, the industry is not only confined to Muslim majority countries but also non-Muslim nations and emerging economies such as Europe, India and China. More significant is the trend of many conventional banking including some major western banks’ entrance into the industry.
Arguably, the motive of the operations of such conventional banks in Islamic banking practices to help uplift the well being of humanity especially the Muslim ummah through Islamic banking activities is neither tenable. Naturally, they are commercially driven and highly motivated by monetary gains.
Nor are fully-owned Muslim Islamic banks operating on the basis of morality and humanity. To some extent, researchers such as Zaman and Asutay (2009) assert that the whole industry these days seems to have grown as part of the conventional financial sector.
The original aspirations of the establishment of Islamic banking and finance in the 1960s and early 1970s was to provide a riba-free finance system which could also be a catalyst in creating a moral and ethical economy through the concept of justice, social equity, brotherhood, charity and cooperation.
Both Zaman and Asutay argue that the industry has failed to achieve this comprehensive objective as it would not materialise by solely relying on prohibition of riba. Moreover, the industry is operationalised through the capitalist value system for being costly and less accessible to those in need. In other words, the industry has been captured by the ideology of capitalism which puts the profit urge above all considerations and deprives the under privileged society from the access to finance.
Comparing the world poverty facts and figures with the global volume of Islamic finance industry reasonably justifies the claim by Islamic economists of the industry to achieve the intended aspiration. As the global volume of the industry crosses approximately the US$1.3 trillion mark, 46% of the entire world poverty exists, lamentably, in the Muslim world.
Indeed, such a case is an absolutely clear paradox as evidence suggests that financial development is likely to accelerate economic growth and help to reduce poverty in a country; and yet, despite strong growth recorded by the Islamic finance industry in recent years, poverty among Muslim populations has not shown any significant improvement.
As a result, the “Islam” label in various Islamic entities such as banking, Insurance (takaful), bond (sukuk), funds, microfinance etc. which is basically the first impression projected to prospective clients of Islamic finance institutions that their products and services are in adherence to Islamic precepts, has become a marketing tool rather than an honest description of the values promulgated by Islam itself.
If the trend of exploiting Islam for the sake of personal and corporate profits persists without any attempt by Muslims to address the issue, we should be worried that Islam one day will lose touch with its living roots and no longer function as a perfect solution to human problems in all ages and places.