Raj Bhala

Overview of Islamic Finance

The Sharī‘a (Islamic Law) has formal rules about risk. In Arabic, ‘ gharar ’ is the loosely equivalent term to the English concepts of ‘risk’ or ‘uncertainty.’ It is sometimes said that gharar is prohibited. That is an overstatement, insofar as risk and its transfer by mutual consent are at the heart of any financial transaction. However, it is accurate to say the Sharī‘a contains important precepts about risk taking and risk shifting.

TPP, American national security, and Chinese SOEs

Free trade agreements (FTAs) are about far more than free trade. They are about national security. A trade deal may be ambitious in liberalizing or managing cross-border flows in goods, services, intellectual property (IP), and people. But, to argue for or against an FTA solely along the axis of free-versus-managed trade is to miss another vital purpose the deal can, and indeed should, advance: national security. This article makes two points. First, TPP exemplifies the possibility of national security enhancement of the United States. That may occur through the containment of China and its ruling Chinese Communist Party (CCP). Second, the debate over the definition of “state owned enterprise�? (SOE) is one among many illustrations in TPP of the link between national security, trade, and containment. The 12 nations negotiating TPP were aware of this link, and deliberated the definition of “SOE.�? TPP excluded the Middle Kingdom from the founding members, while the founders wrote TPP rules to bind China if it subsequently joined the deal. Chinese SOEs were of concern to them, for bona fide national security reasons, and so also were legitimate sovereign interests in providing goods and services through their own SOEs. The evaluation by America and its 11 TPP partners, as to which entities should be included in the scope of SOE disciplines, led to a set of clear rules.

Diversity within Unity: Import Laws of Islamic Countries on Haram (Forbidden) Products

How do Muslim countries treat importation of goods that Islamic Law (Shari’a) considers Haram (forbidden), namely, alcoholic beverages and pork products? Why do they do so? What might Muslim countries do, in accordance with the rules of the General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO), to alter their policies?Based on painstaking empirical research of the WTO protocols of accession and schedules of tariff concessions of every Islamic country in the world, this article answers each of these three questions, which may be summarized in aggregate as “diversity within unity.” All of the pertinent countries are members of both the WTO and Organization of Islamic Conference (OIC), and a majority of their populations profess adherence to one of the world’s great faiths – Islam. Therein is their unity.