The Middle East is known for its lush oil and construction industry; cities in Saudi Arabia, UAE, and Qatar have become a literal oasis in the middle of the barren desert. In just a matter of decades, these simple cities have become beacons of wealth across the planet. But how did these mostly unknown backward countries decades ago turn into giant powerhouses of the world economy today? Well, that’s probably thanks to their ethical way of handling business. You see, unlike traditional business investments, Islam has a culture of integrating their moral compass into their everyday lives; this is because of their adherence to Sharia law.
Halal investments have been a staple of many businesses worldwide, and they’re not just limited to believers of the Muslim faith; they can also be integrated into non-Muslim business models. The success of the golden cities of Dubai, Riyadh, and Qatar all prove that this system works and works efficiently. So, it’s no wonder that many Muslim businessmen are looking for shariah-compliant investments to not only generate wealth but to put their faith into practice.
Social Responsibility: The thing that makes shariah investments so intriguing is their strict compliance with social responsibility. The very nature of this Islamic approach to business is that it is egalitarian in nature, meaning the wealth of one is the wealth of all. Think of it as the acts of charity in Christianity but applied in the business sector. Islamic investments are mostly targeted at industries that can contribute a lot to the community. Take, for example, the rich oil industry in the Middle East. The revenue and resources taken from oil can empower the country’s energy and put them on the world economy’s spotlight, thus uplifting the entire population.
Avoids Risk Taking: While risks are a natural part of any business, you either win or fail, and as we’ve learned from countless stories already, it always ends on the latter. The great thing about Shariah-compliant investments is that they avoid this directly. Shariah law prohibits investing in businesses that are deemed too suspicious or unstable. Because of this, they can pool resources on things that can matter and develop, rather than waste time and effort on a project that is doomed to fail from the start. Furthermore, their capitals are less exposed, meaning they can easily avoid financial crises when they happen.
Reduction of Harmful Practices: The best thing about Shariah-compliant investments is that they have a moral obligation to not enable harmful industries and their products. Since Muslims are forbidden to consume alcohol, engage in gambling, do debts with interests, and eat pork, they significantly lessen the impact these industries have on people’s unhealthy lifestyles. While it might seem miniscule given these industries are still thriving, you cannot ignore the fact that it does have an impact, especially in their respective countries. Instead, as we mentioned, their investment goes to people who need it, like small home businesses, for example.
