As would be expected, FCIB’s annual International Credit and Risk Management Summit kicked off with a lot of talk of the problems in the European Union. Notably, doomsday predictions about Spain and of a potential Greek exit from the Euro—which have been covered in NACM's eNews and blog—were front of mind. Also of particular interest during the conference, currently ongoing in Hamburg, was talk of conditions in the Middle East.
During a discussion looking at the region, and trade therein, one year removed from the Arab Spring uprisings, panelists surprised some in the crowd by outlining a perhaps overlooked fact about Middle East-based businesses and their proprietors amid the many perceived cultural differences: that there are actually more significant commonalities with so-called “traditional” businesses in the West than often depicted.
“We have exactly the same types of worries; we have the same concerns about the future, our kids, etc.,” said Ferda Efe, a senior director with Ashland Specialty Ingredients in Istanbul. “They’re really not that different from the rest of the world. We are all one world now, in the end.”
Additionally, panelists poked some holes in notions that Middle Eastern businesses, officials, salespeople or credit professionals are so culturally unique for taking the time to build the trust level of a relationship, having distaste for when someone overpromises but under-delivers and being dogged in negotiations. Among those three characteristics, are any of these things an American or European credit professional would NOT want?
Similarly, a presentation on Islamic banking laws/Sharia law compliance by Dr. Salman Khan generated interest, if not controversy at times, by showing that the traditional banking methods and products are similar. In fact, to become Sharia compliant with a credit agreement, a traditional product is held up as the model and stripped of things that are not considered compliant (the ability to make money off interest, things considered not in “good faith” or ethical, etc.). Additionally, Khan alleged there was “little meaningful difference between the conventional banking industry and the Islamic banking industry at present.” He characterized the differences as “cosmetic, theoretical and superfluous.”
“What has happened in reality, the facts are thus: the implantation in practice has diverged from theory to a large extent,” he told FCIB delegates. “You have a Sharia-compliant, not Sharia-based, industry paradigm. The Islamic banking and finance industry operates almost entirely from infrastructure designed for the conventional banking system. There has been no development of a tailored system. The point is Islamic banking has to fit into the platform, however that is even really possible.”
Brian Shappell, CBA, NACM staff writer