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Islamic Finance in the Global Economy$
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Ibrahim Warde

Print publication date: 2000

Print ISBN-13: 9780748612161

Published to Edinburgh Scholarship Online: March 2012

DOI: 10.3366/edinburgh/9780748612161.001.0001

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Islamic Finance and the Global Political Economy

Islamic Finance and the Global Political Economy

(p.93) 5 Islamic Finance and the Global Political Economy
Islamic Finance in the Global Economy

Ibrahim Warde

Edinburgh University Press

In the three eras identified in the previous chapters, the evolution of Islamic finance was paradoxical. The creation of the first Islamic banks could be seen, especially in the context of oil crisis and the calls for a New International Economic Order, as a challenge to the existing political-economic order. In reality, the first Islamic banks were firmly rooted within the existing Western financial system. By the same token, the age of globalisation allowed a financial system rooted in the Middle Ages to survive and to thrive. What is more striking is that even amid the Islamaphobia spurred by the September 11 events and the ‘Global War on Terror’, Islamic finance experienced its most dramatic growth in the first years of the twenty-first century. These paradoxes can be understood only in connection with the evolution of the global political economy during those three periods. The first section of this chapter discusses the political and economic context of the birth of modern Islamic finance, as well as the emergence of pan-Islamism, petrodollar windfall and relations with the West. The second section discusses Islamic finance and the global economy, as well as the transformation of banking and the rise of Islamism.

Keywords:   Islamic finance, Islamic banks, globalisation, Islamaphobia, global political economy, Islamism, pan-Islamism

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