Publication:
Islamic finance in a multipolar world: traversing the complexities of a new world
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Date
2013
SDG:
Abstract
The recent financial developments have given rise to a developing consensus that the Unipolar economic growth regime dominated by U.S, Japan and few European centers, is under great stress. The consensus takes into consideration the present financial stresses and strains, and theensuing uncertainty surrounding the sustainability of the unipolar regime, which has given way to a shift towards a multipolar economic setup. Scholarship has already hinted on not only better trade and investment opportunities, but also on a much more resilient global economic growth that such a shift can bring. However, there are some major obstacles that need to be overcome in order to reap fully the desired benefits of multipolarity. Continuation of debt-based financing regime (the hallmarks of which are risk transfer and risk shifting) will not necessarily allow the benefits of emerging multipolarity to accrue to the world economy. The new system can be more effective with a new regime of financing. Indications are that almost all emerging countries in Asia are actively considering risk sharing via Islamic finance as a possible alternative.
Keywords
Multipolar regime , Debt stress , Complexity , Black swans risk sharing , Islamic finance
Citation
Mirakhor, Abbas & Shaukat, Mughees. (2013). Islamic finance in a multipolar world: traversing the complexities of a new world. Journal of Islamic Banking & Finance, 30 (2), p. 77-86.
Publisher
International Association of Islamic Banks