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Hossein Askari, Founder of the Islamcity Index
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Hossein Askari, Founder of the Islamcity Index

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Exclusively for the Daily Muslim, we have interviewed Dr. Hossein Askari, one of the greatest scholars of economic development in the Middle East and in Islam and founder of Islamicity index. Former Special Adviser to the Minister of Finance of Saudi Arabia, former member of IMF (International Monetary Fund) board, then President of the Department of International Affairs, at George Washington University.

 

Please tell us about Hossein Askari:

I was born in Iran. My father died when I was nine years old and I was sent to an English boarding school. It was a difficult time in my life. I did not know a word of English and English boarding schools were a tough place for a foreigner in the years after WWII. I received my elementary and secondary education in England. I then applied to MIT and Caltech in the US. I was accepted at MIT. I studied civil engineering as this was my father’s wish. I had no intention of practicing engineering but I did this in memory of my father who was the world to me. I finished my engineering studies in three years instead of the normal four years and then attended the Sloan School of Management for my Masters. But my goal was to become an economist/politician and return to Iran. I was accepted in the PhD program at MIT. I had wonderful teachers, including Franco Modigliani who I looked on as a father. He and his wife were wonderful to me and to my children. I had the honor of writing many papers with Franco, who introduced me to a number of notable Italians, including Guido Carli. I also had a number of Italians as classmates also. I received my PhD and started teaching at Tufts University in 1969. Then I moved on to become a full Professor at the University of Texas at Austin.

Later, I then took a leave of absence from the University of Texas to become Special Advisor to the Minister of Finance of Saudi Arabia and to establish the Chair of Saudi Arabia at the IMF Executive Board. I served for two and a half years on the Executive Board of the IMF and frequently spoke for Saudi Arabia at the IMF Executive Board; I developed the idea for a special Quota increase for Saudi Arabia, giving Saudi Arabia an effective permanent seat on the Board and assisted in the negotiations of a $10 billion loan to the IMF, which was at that time the largest single loan to the IMF. In 1982 I left the IMF and resigned from the University of Texas at join the George Washington University, where I served as Chairman of the International Business Department, Director of the Institute of Global Management and Research and the Iran Professor of International Business and International Affairs from 1998 to 2018.
During the mid-1980s, I directed an international team that developed the first comprehensive domestic, regional and international energy models and plan for Saudi Arabia. During 1990-1991 I was asked by the governments of Iran and Saudi Arabia to act as an intermediary to restore diplomatic relations; and in 1992 I was asked by the Emir of Kuwait to mediate with Iran.

Most recently about three years ago, I was all set to teach and research for a year at LUISS Guido Carli but had to cancel and I hope the opportunity arises again as I love Italy and would love to spend a year in Italy.
In January 2019, I became Emeritus Professor. I will devote all my time to the tax-exempt Islamicity Foundation, which I have incorporated to manage the Islamicity Indices Program and I hope that in time we will take this innovative program to a welcoming university for its home.

 

Please explain to our readers what are Islamicity indices:

We developed the concept of Islamicity Indices in 2007. Islamicity Indices have a dedicated website  with articles, podcasts and the latest indices, which are updated annually.

How did this come about? When we looked at Muslim majority countries, we could not help but see that they did not reflect the teachings of Islam. Many of these countries were ruled by oppressive dictators. There was rampant injustice and corruption. A few had much while the majority suffered with little hope for a better future. We saw poverty alongside grotesque luxury. There was an absence of respect for human and political rights. We saw conflict. To us Islam is all about justice but we saw little reflection of this in the institutions of justice and its practice.

In short, while Islam is a rules-based system, we did not see the rules that Islam recommends for a rule-abiding Muslim community. Rules are in turn reflected in institutions and modern economic thinking is that effective institutions are the foundation of flourishing and growing communities. In other words, successful societies and countries have effective institutions at their foundation.
So we set about identifying the important rules of Islam and the institutions that they recommend in four broad areas—the economy, legal and governance, human and political rights and relations with other countries. Then we found data that best represented the values and characteristics of such a rule-abiding Muslim society. Then we estimated these indices for all countries to see how well they performed.
Please note that these indices do not assess the personal requirements of a Muslim (such as daily prayers, fasting, pilgrimage and the like) or belief commitments, they are premised instead on Quranic goals and the extent of a society’s adherence to its institutional recommendations and governance. As such the indices provide an unbiased measure for the comparison of the performance of Muslim and non-Muslim countries as we wanted to compare not only Muslim countries but also Muslim and non-Muslim countries. In a rule-abiding Muslim community there must be political and individual freedom, no poverty alongside wealth, equal opportunities for self-development (education, healthcare, basic needs), economic prosperity, accountability of rulers and governments, and socio-economic justice.

 

What are the results, where do Muslim countries rank?

Muslim countries perform badly. The 2018 indices, published on May 15th (www.IslamicityIndices.Org) show New Zealand to be the best performer as was the case in last year’s index, followed by Sweden, the Netherlands, Iceland, Switzerland and Ireland. The top 20 countries are those of Northern Europe, New Zealand, Canada, Australia and Japan. The top five performing Muslim countries are: the UAE (45), Albania (46), Malaysia (47), Qatar (48) and Bosnia and Herzegovina (60). Most Muslim countries are in the bottom half with Sudan (152) and Yemen (153) at the bottom. While the performance of Muslim countries in the overall index is bad, their performance on the Human and Political Rights Index is even worse with the highest ranking Muslim countries: Albania (43), Bosnia and Herzegovina (50), Kyrgyz Republic (76), Malaysia (79) and Lebanon (80). These results bring to life the words of Mohammad Abduh uttered over a century ago “I went to the West and saw Islam, but no Muslims; I got back to the East and saw Muslims, but no Islam.”

 

What is the practical utility of these indices?

These indices provide a concise method of conveying Islam’s fundamental teachings, a benchmark for assessing how well Muslim communities have adopted these teachings and a roadmap for reformation and development of these communities. The Islamicity Indices enable Muslims to focus on the indisputable source of their religion—the Quran—and are a continuous performance indicator of their rulers, governments and communities. The Indices also provide a simple approach to explain Islam to the non-Muslim world. With a better understanding of Islam in both Muslim and non-Muslim communities, peaceful reform and effective institutions will be more readily achieved in Muslim countries.

Islamicity Indices offer a moral and transparent compass for reform. Rulers can present these indices as a compact with their people to reach an agreed level of reform within a fixed period of time — we suggest in the 10–20 year range, depending on the prevailing status of the country and the agreed degree of reforms. And rulers and their people would agree to a mechanism to review the result of indices each year and how to change and adapt policies to address shortcomings. We hope that rulers in most Muslim countries will be inspired to adopt these indices to usher peaceful and meaningful reform across the Muslim World for building flourishing and just societies. The adoption of such reforms will enhance internal cooperation, increase investment from domestic and foreign sources, attract foreign companies and in turn fuel economic growth. With the adoption of these indices in a few Muslim countries, many other Muslim countries will also be encouraged to reform. Countries that profess Islam should be the first to adopt its rules and the institutions it recommends. The longer reforms are delayed, the harder they become to implement.

 

How did Muslim countries get to be in such a bad state?

In my opinion, Islam was hijacked almost immediately after the prophet Mohammad’s death by rulers. Oppressive and corrupt rulers supported by pliant clerics upended the fundamental teachings of the Quran in order to gain absolute power and live in opulence as they subjugated their people. More recently, Muslim dictators have been supported by selfish foreign powers. At the same time, Muslims have been fed a message of Islam that is focused on the largely mechanical facets of the religion, the five pillars, popularized by academics and have been prevented from debating the deeper meaning of the teachings and their practice contained in the Quran. Islamicity Indices demonstrate that countries such as Switzerland, Sweden, Denmark, Norway and New Zealand better reflect Islamic teachings and their envisioned institutions than do countries that profess Islam. As Muslims find little hope for a better future in oppressive societies, terrorists have been provided with an army of recruits to overthrow Muslim dictatorships and to cause harm to their superpower backers in the West. Islamicity Indices provide a benchmark for Muslims to debate the meaning and application of their religion, to monitor their successes and failures and to build effective institutions for a turnaround

 

What is the Islamicity Foundation and who are its staff?

The tax-exempt Islamicity Foundation has been incorporated with the mission to stimulate peaceful reform and effective institutions in Muslim countries, using Islamicity Indices as the instrument and moral compass for achieving this goal. We hope to raise an endowment. In time, we hope to take this program to a world-class university for a home. And most importantly we hope to establish a partner in every country. We are proud of our partnership and association with Karim Benvenuto in Italy.

I am the president of the Foundation. We have Hossein Mohammad khan as Vice-President; he runs all the indices. Fara Abbas, our partner for Afghanistan, is a Director and oversees our reports. Mostafa Omidi is our webmaster. Liza Mydin, our partner in Malaysia contributes to our books and publications. Two former students at the George Washington University, Eddy Rastgoo and Keian Razipour, have managed our social media. Finally, we have benefitted from two translators who have translated our book on Islamicity Indices into French and Farsi.

 

In your opinion, where is Islam at this historical moment?

Today, the Islamic civilization is in crisis and the crisis will only deepen if nothing is done. Muslim countries are in urgent need of peaceful reform for their people and their success is, in turn, important for the security of our world. It is projected that by 2050 there will be three billion Muslims, representing 30% of the world’s population. Yet, most Muslims live under oppressive rule, lack good opportunities for self-development and have little hope for a better future. East-West conflicts will only widen and bombs, drones and sanctions will only make matters worse. Muslim countries must build effective institutions for thriving communities. Reform and its needed institutions are most likely to come about in the context of Islamic teachings. Islamicity Indices offer such a compass and program for reform.

 

In your opinion, can Islamic finance be applied in the context of the European capitalist system?

Let me start by delineating the essence of Islamic finance and banking. As you know, it is all about risk sharing, having a skin in the game, as opposed to risk shifting. So interest bearing debt is prohibited. Instead, equity participation, in other words stocks (shares) recommended.
In my opinion risk sharing affords more stability to a financial and banking system. As you well know, academic research has shown that financial crises come about in large part because of a big runup in debt. So I think the basic premise of Islamic finance and banking is sound.

 

Can it be applied in a capitalist system?

Yes, but we need to do a number of things. First, we must remove the name ‘Islamic” and call it something else, such as risk-sharing finance. It is sad but true, Islamophobia is rampant in our world. Second, we need to educate the public what it about risk-sharing instruments. Third, we need to create a level playing field. In most countries rules and regulations, especially those related to taxation, favor debt; so, we need to change the laws to put debt and stocks on a level ground so that they can compete fairly.

 

Life and car insurance, with car insurance being mandatory, is a problem for Muslims in Italy.How such insurance be provided for Muslims in a way that it conforms to Islamic teachings about insurance?

As you know and as we have already elaborated earlier, in Islam we prohibit risk shifting but endorse risk sharing. So I think there’s a great opportunity for an entrepreneur to set up a mutual insurance organization in Italy for cars and another for life insurance. Each person needing insurance would pay into a pool and the participants would be the owners of the mutual insurance company and would share in the risk. To spread the risk better, this could be expanded to other EU countries in order to better diversify the pool.

 

What is your dream development for the Islamicity Indices Program?

Here is my list. First, I hope that we can get a few Muslim country governments to adopt our indices as a compass for their reform over say a 20 year period. Realistically, the most likely candidates would be Malaysia, Indonesia, Bosnia and Herzegovina and Qatar. This will lead the way for other Muslim countries. Second, it would be helpful if we had active partners in all countries, such as Karim Benvenuto in Italy. We need to educate Muslims to take an active role in their religion and not let clerics, rulers and much less terrorist dictate the meaning of their religion. Third, I am looking for a welcoming university where we can house this program or at least to have a very close affiliation. Within a university, I would propose to teach seminars on these indices, on justice and development in Islam and on Islamic economics and finance. I hope to energize students, expand course offerings and establish student and faculty exchange programs and partnerships with Muslim countries to create a global community that understands and supports the mission of reform. In time, I would hope that the Islamicity Indices Program would one day become a flagship initiative for the university. Fourth, I hope we will raise a significant endowment so that the program could have an independent standing.
But my overarching dream is to begin the process of meaningful reform in Muslim countries to build flourishing communities. I realize that this will take decades. But if we are successful in realizing the four points above, this may take years instead of decades. I just wish that the non-Muslim world would also realize that this program is the best way for them to diminish global tensions and restore balance to our world.

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