Islamic finance seeks young scholars to lead growthzulkiflihasan
Islamic finance seeks young scholars to lead growth
By Shaheen Pasha Available at: http://www.reuters.com/article/idUSTRE65021U20100601
DUBAI (Reuters) – Fifteen years ago, New York native Taha Abdul-Basser had a set plan for his future. The Harvard student was double majoring in pre-med and comparative religions with the expectation that he would serve society as a doctor.
But his life took a different turn as Abdul-Basser, already a student of traditional Islamic disciplines, became involved with Harvard University’s Islamic Finance Project as a researcher and found his new calling: sharia.
“I always had an interest in traditional Islamic religious sciences with my early education coming from my father,” said Abdul-Basser. “But I really stumbled across the opportunity to apply Islamic ethics to contemporary life.”
At 35, Abdul-Basser is now a respected and in-demand sharia advisor in the global Islamic finance industry and positioned to benefit from an acute shortage of qualified professionals in the sector.
With Islamic finance a $1 trillion industry globally and expected by ratings agency Moody’s to reach $5 trillion in time, students of sharia have more opportunities than before to take their skills beyond the mosque doors and into the boardroom.
Reflecting the change in times, many current scholars, including Abdul-Basser, now prefer to call themselves sharia advisors or technicians to suggest that their duties are more professional rather than simply clerical.
Professionally, it can be a lucrative endeavor. Scholars working on Islamic finance deals are paid consulting fees, depending not only on the services provided but also the seniority and fame of the scholar.
There’s no shortage of positions, with every Islamic finance company having a sharia board that monitors compliance, and ad hoc boards often set up for individual deals.
While there is no benchmark for fees, a renowned chairman of a sharia board, for instance, could earn $50,000 to $100,000 per board as a result of retainer fees, fees for issuing edicts, audit fees and documentation fees. Junior scholars make significantly less.
Abdul-Basser, who works full-time as Harvard’s Muslim chaplain, sits on five international sharia boards and served on six others that are no longer active. Juniors such as Abdul-Basser undergo an informal apprenticeship with senior scholars and move up the ranks as their expertise grows.
“It’s a process that never really ends,” he said. “The primary difference between the first and next generation of scholars is that institutions exist now, so the upcoming experts can be more focused on applying their expertise in sharia to financial techniques, rather than institution building.”
TOP SCHOLARS DOMINATE
There is currently no standard global training process or certification for a student of sharia to become a scholar. Sharia scholars can come from a small village madrassa in south Asia or have an advanced degree in religion from Cairo’s venerated Al Azhar University.
And well-rounded sharia advisors are scarce. Islamic finance experts say that the first generation of scholars may have laid down the foundation to help establish the business, but many still lack the business acumen, technology and language skills necessary to help the industry evolve.
“Many of them are too set in their ways to take the steps needed to help the industry move forward,” said one Gulf-based Islamic banker, who asked to remain anonymous. “And the ones that have the skills are stretched way too thin. It’s up to the next generation to help Islamic finance reach its potential.”
The same scholars are repeatedly seen at the helm of sharia boards.
“There are about 15 highly qualified internationally recognized scholars who are financially savvy and who understand modern finance,” said Harris Irfan, head of Islamic products at Barclays Capital. “It’s very difficult to get time with those 15 as they sit on dozens of boards and are very much in demand.”
Out of the 132 scholars active within the Gulf Cooperation Council, the same top ten scholars make up almost half of all sharia board positions, said consulting firm Funds at Work.
MORE FINANCIAL TRAINING OPTIONS AVAILABLE
But that could change as more global programs are created to help foster the Islamic finance industry by training upcoming sharia scholars in the ways of business.
Bahrain, for instance, has a certified sharia advisor and auditor program in place to train scholars.
In Malaysia, the central bank established International Shari’ah Research Academy for Islamic Finance (ISRA), to help develop talent among industry practitioners and sharia scholars.
The program offers scholarships to provide an incentive for a sharia student or scholar to pursue an advanced degree in Islamic finance and also offers mentoring for aspiring sharia practitioners to learn from established scholars.
“We now have around 120 advisors that we have developed sitting on different sharia boards,” said Mohamad Akram Laldin, prominent sharia scholar and executive director of ISRA.
Scholars must think internationally, by improving their English skills and knowledge of Western business practices in order to be successful, experts said.
To that end, the Islamic Finance Council in the UK has developed the Scholar Professional Development Programme to train sharia scholars in Islamic finance tenets, said Omar Shaikh, executive board member of the council.
“It’s extremely unrealistic for sharia scholars to give opinions on such a diverse space in finance without being up to speed with understanding the language of the finance professional,” he said.
While not offering a master’s degree or specific certification, the program provides 21 hours or roughly three days of workshops designed to teach financial basics for mid-level and new scholars that may not be as familiar with Islamic finance. The program has already conducted training in the UK, Malaysia and Bahrain.
Shaikh and Laldin said that the next generation of scholars will be asked to do more than simply approve deals and financial structures.
“The gap between sharia knowledge and market practice will be narrower,” Laldin said. “There will be more demand for scholars to help with coming up with better solutions and better products.”
But Abdul-Basser said it was important for upcoming scholars to hold on to their roots and the teaching of their mentors even as the industry evolves.
“There is a fairly large set of up-and-coming experts who are well-positioned to take positions on sharia boards,” he said. “We have received the torch, so to speak, and have a responsibility to move things forward.”
“Each day is the scholar of yesterday.” Publilius Syrus
Grand Mosque of Cordoba, Spain