When risk is a four letter word
The objection of Islamic Syariah to riba has never been about the size of the interest charged. It is also not confined to consumption loans; it is prohibited also to investment loans. Investment loans, isn’t that a misnomer in the first place? How could an investment be a loan, and how could a loan be an investment? That is the objection of Syariah to riba, an investment cannot be a loan, and a loan cannot be an investment. But we accepted the fraud and spun, that a loan is an investment without question anymore. For how else could we have agreed to a guaranteed return to someone who has lent us capital? How else could we have agreed to a full undiminished return of his capital at the agreed time without consideration of the underlying success or failure of the business? Hitler used to say, tell the lie a thousand times and it will be accepted as the truth. In riba the axiom seems to be, practice it for a hundred million times and people will no longer question its injustice.
It became a fact of life that we are numbed to its injustice. We are numbed to its injustice because it is not us who bears the direct brunt of the injustice. The UN sponsored Study by the World Institute for Development Economic Research reported that in the year 2000 there were 1,000,000,000 people living on less than USD1 per day. The per capita GDP (total national output divided by the population), difference in income between the world’s richest countries and the world’s poorest countries, which was 22 times in 1913 is now 267 times. 1% of the world’s population now own 40% of the planet’s wealth. "The study emphasised that economic growth is, by itself, no fix: How the gains are distributed is just as important. In China, Romania, Sri Lanka and many Latin American countries, swiftly expanding economies have improved incomes for many, but the benefits have been limited by a simultaneous increase in economic inequality, putting most of the spoils into the hands of the rich and not enough into poor households..." This is the tragedy of the riba driven economy, delivers economic growth but with much inhumanity. But it is not our problem because we are not amongst the 1,000,000,000 humans mentioned above.
And so we continue with our life. We have a form of Islamic banking. Some of us are no longer practicing riba banking; really? As outlined above isn’t the objection to riba based on the risk aspect where all manner of risks are transferred by a lopsided contract to the other party? Isn’t the objection to riba about the owner of money disattaching himself from all manner of risks whilst at the same time expecting a guaranteed return? How do we measure against this requirement? No measure of akad will make a transaction riba free until we wake up from our doze and address the risk aspect. Risk is indeed a four letter word when we have not yet shed our riba drenched clothes.