Socially Responsible Investing and Shariah Compliant Investment

In the financial world, where profit and return are often the priorities of the average investor, the vehicles we use to reach our monetary goals can be overlooked. We know that mutual funds are able to offer instant diversification to individual investors; they give investors access both to different parts of a nation's economy and to the global marketplace. 
But another, perhaps buried, concern is the idea of socially responsible investing. While investing in a big name arms manufacturer may produce a tidy return in a person's portfolio, it can be disturbing to learn that the weapons being manufactured eventually become a payload in some foreign country. 
By not investing in stocks that do business in areas such as gambling and the manufacturing of weapons, tobacco, drugs and alcohol products, individuals can impose their own social and moral values on their portfolios. 
Furthermore, people can choose to invest in companies they believe are making valuable social and environmental contributions, such as educational companies or companies that make an effort to curb pollution and protect the environment.
Of course, people will have different ideas as to what is socially responsible, ethical or even moral. If investors choose securities in accordance with their own beliefs, it's up to them to choose the investments they consider appropriate. By deciding to invest in companies that are socially responsible and accountable, investors can not only realize financial gain, they can also feel they have contributed to a worthy cause. 
Socially responsible investing (SRI) is growing and investors should know the rules other cultures incorporate into their socially conscious investment decisions.  SRI mandates have a lot of merit and there is good reason to believe they can be employed to effect social change. 
The socially responsible investing movement has worked hard to change corporate policies on a host of social, moral and religious issues such as business investments in politically sensitive parts of the world, workers' rights (sweatshops), the manufacturing of land mines and participation in so-called "sin" industries. 
In similar fashion, environmentally aware investors are focused on issues such as global warming, energy efficiency, reduction of carbon footprints, water quality, air quality and a host of similar concerns. As advocates for the environment, they are using their clout as shareholders to put environmental concerns on corporate agendas and hold companies responsible for their actions. In addition, shareholders are showing their concern through shareholder resolutions, allowing shareholders to propose change.
Shariah Compliant Investment vehicles take socially responsible investing (SRI) to a new level, proving that conscious investing does not necessarily depress returns. Hedge funds can turn to specialty shops that specialize in weeding out investments that violate Islamic Law. Non-accredited investors (investors with less than $1 million to invest) can also gain admission by following Shariah indexes or mutual funds.
Islamic law does not permit investors to derive benefits from interest paid on loans, the sale of pork, firearms, and other sin investments related to pornography, gambling, alcohol or tobacco. Institutions that engage in short selling and the use of leverage are also frowned upon since borrowing goes against one of the basic principles of Islamic law. 
An investment fund which meets all of the requirements of Shariah law and the principles articulated for "Islamic finance." Shariah-Compliant Funds must follow a variety of rules, including investing only in Shariah-compliant companies, appointing a Shariah board, carrying out an annual Shariah audit and purifying certain prohibited types of income, such as interest, by donating them to a charity. 
Islam has laid down with crystal clarity what constitutes the basis of a Shariah-compliant investment. The absence of interest (riba), the presence of certainty (in contracts), and the exclusion of unethical concerns such as alcohol, are the main parameters governing a Shariah-compliant investment.
Purely from a Shariah perspective, investment is strongly encouraged. Islam normally favours the middle-path and therefore the extremes of hoarding wealth and consumption are clearly undesirable from a Shariah viewpoint. The Shariah prefers the balance between these extremes, which is achieved via a diligently prepared Shariah-compliant investment strategy. Moreover, investment usually stimulates economic growth and collective prosperity.
It's important to remember that SRI and Shariah Compliant Investment may not always have a material impact on a company or increase expected investment returns, but you will sleep better at night knowing you've satisfied your moral and ethical goals. In addition to the social benefit derived from choosing investments based on Islamic laws the strategy has also proved to yield positive returns for its investors.
May Allah give us the tawfeeq and hidayah to follow His guidance at every step of our life for His assurance is the greatest inspiration:" And those who strive in Our Cause, We shall Guide them to our Ways. Certainly, Allah is with those who excel in good." (Surah Al-Ankabut 29:69)
Jazakallahhu Khayra for reading this post.

(References mostly from selected Investopedia articles.)

A life in obedience to Allah

Under normal circumstances, many people can be just. However, in dealing with other human beings, there are two major impediments to justice - love and hatred. Islam commands its followers to be just, even in the face of strong conflicting emotions.

The Prophet Muhammed (S.A.W.) said in a hadith which means, “Each of you is a leader, and each leader will be held accountable for what he has led.” (Hadith narrated by al-Bukhari)
The Prophet (S.A.W.) obeyed the orders of Allah in all of his affairs, adopting justice with his Companions and enemies. The Prophet (S.A.W.) would never deny anyone justice, despite those who objected to him and showed an unfavourable attitude towards him.

As Muslims, we are required to live a life in obedience to Allah, which is a continuous balancing act, both individually and collectively. We are reminded that our actions are being watched, especially by our children, and they take cue and model themselves after us, sometimes more than what we preach and say to them. Imagine the impact on our community, if each and every one of us (especially, parents) is a successful leader in his or her own right.

In our family life, real leadership takes place through our own actions and behaviours. Parents will have to consider the needs of each family member fairly and not place his self-interest above the rest in making any decision.

Likewise in our own work life and in society, an effective leader is one who leads by example; the example of his acts and contributions. Even for ordinary employee or worker who may not have any subordinates. Yet, if we are the most diligent or industrious, we will become an example to others, and thus we may become a very effective leader.

May Allah Subha Nahu Wataala  grant us continued guidance for us to perform our roles and responsibilities successfully in the best possible manner.

Fasting Six Days of Shawwal After Ramadhaan: “Like Fasting The Entire Year”

All praises are due to Allah Almighty alone who has made it possible for us to fast in the holy month of Ramadan 1434H. 
Eid ul Fitr is a day of thanksgiving, a day of festive remembrance and a day of moral victory in the service of Allah SWT.
May Allah SWT fill our heart with joy and our home with love and His protection.
May Allah SWT accept our good deeds, forgive our transgressions and ease the suffering of all people around the world.
May Allah SWT help us to establish peace, justice, brotherhood and ELIMINATE the negative thoughts among the Ummah and bring them close to each other.
Let us not forget what the Messenger of Allah (blessings and peace be upon him) said, “Whoever fasts Ramadan and follows it with six days from Shawwal it is as if they fasted the entire year.” (Hadith-Muslim).
It is permitted to fast these six days separately throughout the month, or consecutively, after Eid al-Fitr.
 Let us all be guided by Allah's greatness and mercy.

The Most Influential Persons in History

History has recorded the appearance and deeds of many religious leaders: Moses, Jesus Christ, Zoroaster, and Abraham, to name just a few. But there is one religious leader who stands alone, an unlettered man who transmitted a revelation from God that literally changed the course of history and the destinies of a major portion of mankind.

He was nothing more or less than a human being. But he was a man with a noble mission, one which was to unite all human beings on the worship of the one and only God and to teach them the way to honest and upright living based on the commands of God. He always described himself as "a servant and messenger of God," and every single one of his actions proclaimed loudly the truth of this phrase.

ENCYCLOPEDIA BRITANNICA confirms:

"...a mass of detail in the early sources shows that he was an honest and upright man who had gained the respect and loyalty of others who were likewise honest and upright men." (Vol. 12)

Do You Know This Man?

"His name is Muhammad" May the Peace of God Be upon Him (PBUH)

Born in Arabia in the year 570 CE, Muhammad (PBUH) started his mission of preaching Islam, the religion of truth and the submission of man to one God, at the age of forty and died at the age of sixty-three.

During the short twenty-three year period of his prophet hood, Muhammad (PBUH) changed the entire Arabian Peninsula forever.

Within the space of one generation, the vast majority of people went from paganism and idolatry to devout and strict monotheism, from tribal quarrels and wars to national solidarity and cohesion, from drunkenness and debauchery to sobriety and piety, from lawlessness and anarchy to a lifestyle characterized by discipline, from moral bankruptcy to the highest standards of moral excellence.

Human history has never seen such a complete transformation of a people or a place before or since - and just IMAGINE that all of these unbelievable wonders took place in JUST OVER TWO DECADES and because of the efforts of one man.

The Prophet Muhammad (PBUH) accomplished so much in so many fields of human thought and behavior in the fullest blaze of human history. Every detail of his private life and public utterances has been accurately documented and faithfully preserved to our day The authenticity of the records so preserved are vouched for not only by the faithful followers but even by his prejudiced critics.

Muhammad (PBUH) was a religious teacher, a social reformer, a moral guide, an administrative colossus, a faithful friend, a wonderful companion, a devoted husband, a loving father - all in one. He was also a philosopher, orator, apostle, legislator, warrior, conqueror of ideas, restorer of rational dogmas, of a cult without images, the founder of twenty terrestrial empires and of one spiritual empire.

No other man in history ever excelled or equalled him in any of these different aspects of life - but it was only for the selfless personality of Muhammad (PBUH) to achieve such incredible perfection.

Today even after a lapse of fourteen century, the life and teachings of Muhammad (PBUH) have survived without the slightest loss, alteration, or interpolation. They offer the same undying hope for treating mankind's many ills that they did when he was alive. This is not a claim of Muhammad's (PBUH) followers but also the inescapable conclusion reached by a critical and unbiased study of human history.

Maybe it is time for you to get to know this outstanding person who has influenced the life of billions of people over the last fourteen hundred years. He could also change your life. 

(Gist compiled from “The Messenger” written by Administrator Islam Awakened - Thursday, 23 June 2011)

Lebanon Bombing: Impetus for US-NATO Planned Sectarian War

A recent bombing in Beirut, Lebanon left high ranking security chief Brigadier General Wissam al-Hassan dead. Al-Hassan is described as “anti-Syrian.” 

Before Al-Hassan’s death was announced, and literally as bodies were still being pulled from the wreckage caused by the bombing, politicians from Saad Hariri’s faction began immediately blaming Syria for the attacks. 

Read on.. 

Lebanon Bombing: Impetus for US-NATO Planned Sectarian War

Observations:

"Help another in righteousness and piety, but do not help one another in sin and rancor. Fear Allah for Allah is strict in punishment" - (Al-Maidah: 2)

Political assassinations in Lebanon became rampant especially after the murder of Rafiq Hariri in February 2005.

Since then the polarization in Lebanon has deepened between the pro-Western forces led by Hariri’s son Saad, his Sunni-led coalition, and the pro-Syrian block of the Shiite parties led by Hisbullah. Soon after Rafiq Hariri’ death, massive demonstrations by the pro-Western parties and the intervention of foreign powers were able to dislodge Syria from Lebanon after a twenty-nine year military presence.

The West took advantage of the incident by applying pressure on the Syrian regime, which culminated in a U.N. Security Council resolution on April 7, 2005 appointing an international tribunal to investigate Hariri’s assassination.

The UN tribunal investigation was highly politicised when it issued several reports accusing the Syrian regime, based on non-credible witnesses. Four years later the tribunal admitted that much of  “the evidence” used against Syria was fabricated by false witnesses, some of them even tied to Israeli intelligence (Abdelbasit Bani Odeh) or the CIA and other Western intelligence agencies (Ahmad Mari‘e and Zuhair Siddiq).

By the end of 2009, the whole case against Syria collapsed and the four senior security officers held for over four years were consequently released. In the mean time, the false witnesses were relocated outside Lebanon and given protection and new identities in different European countries.

Israel has a long and bloody history of successful assassinations in Lebanon since the 1970’s, including the killing of the former leader of Hisbullah in 1992, and the assassination of dozens of Palestinian leaders in the occupied territories, Europe and other Arab states including many leaders of Hamas, Islamic Jihad, and the PLO.

Many of these assassinations were carried out secretly but some were exposed when agents were caught red handed as in the 1997 attempt to kill Hamas’ leader Khaled Meshal in Amman, or after leaving behind many clues as in the assassination of another Hamas leader in Dubai in January 2010. Often times Israel would conduct such assassinations in public and in cold blood without any fear of international condemnation or scrutiny, especially when carried out in the occupied territories.

Israel was forced to retreat from Lebanon in May 2000. It however continues to actively pursue its “forward defence” overt and covert mission in Lebanon. The main objective  was achieved shortly after the Hariri assassination with the withdrawal of Syria from Lebanon. The aim to disarm Hisbullah has been difficult to accomplish despite employing a vicious military attack in 2006 as well as mobilizing all levers of local, regional and international political powers.

The enemies of Lebanon would wish to frame the assassination of Hariri and other political assassinations on Hisbullah and/or Syria so as to trigger a bloody sectarian war forcing Sunni-Shi’a divide. At the very least these enemies hope that under indictment Hisbullah and its friends would be on the defensive, thus forcing the disarmament of its militia and thus curbing their influence.

Much to the dismay the majority of its friendly people, Lebanon continues to be subjugated by domestic and regional “players” keen to rewrite the geo-political map of the region.  

Do not despair, their wish to rewrite history will be in vain. Allah’s justice shall prevail:

"O you who believe! Stand up for justice, as witnesses to Allah, even if it goes against yourselves or your parents and relatives. Whether they are rich or poor, Allah is nearer to both (than you are). Do not follow your own desires and deviate from the truth. If you twist or turn away, Allah is aware of what you do." - (Al Qur’an 4:134)

TUN DR.M SPEECH AT THE RAFIK HARIRI UN-HABITAT MEMORIAL AWARD

Congratulations YAB Tun. You continue to make Malaysia proud. Needless to say, you deserve the prestigious Rafik Hariri UN-Habitat Memorial Award.

In your acceptance speech http://chedet.cc/blog/?p=844#more-844 you dedicated this award to the people of Malaysia for their “culture of sharing among the multi-racial, multi-religious people of Malaysia, without their love for peace and stability, Malaysia would not have been able to grow as it has done.”

You, Sir, of all world leaders have contributed meaningfully to Rafik Hariri especially during his tenure as PM of Lebanon. Your friendship and personal rapport with Rafik Hariri have had profound effect on Malaysia-Lebanon bilateral relations.  YAB Tun, you were the first Malaysian Prime Minister to visit Lebanon accompanied by several ministers and 100 strong official and business delegation from 17-18 June 1997. 

It was no coincident that during this official visit to Lebanon that you were also conferred with the Grand Condor of Lebanon (Wisha Al-Akbar) medal by Lebanese President Emile Lahoud.

There is a great amount of awareness and admiration among the Lebanese leadership and people at large about Malaysia’s economic and political achievements. Prime Minister Rafiq Hariri, during a welcoming banquet, was quoted as saying "Malaysia has attained the highest level of international competitiveness in trade, industry, and services since Mahathir took office in 1981”.

Malaysia continues to provide the necessary support to Lebanon in its economic reform and nation building. Malaysia contributed in no small way the Lebanese reconstruction process to bring Lebanon to its former status as the primary business centre in Western Asia. The establishment of full diplomatic relations between two countries contributed in no small way in boosting political and economical ties.

Consistent with the pledge made during Paris II Conference held on 23 November 2002, Malaysia agreed to provide Lebanon with soft loan when it with purchased US$300 million bonds on 27 December 2002 at concessionary rates with the maturity date on 27 December 2017. Malaysia had earlier assisted Lebanon via purchase of the US$250 million bonds on 22 May 2002 with the maturity date on 5 March 2005. 

The Paris II Conference was aimed at securing international backing for the efforts to exchange the Lebanese debt into long-term and low interest rate loans for the rebuilding of post civil war Lebanon. More than US$3 billion financial pledges were made by friends of Lebanon albeit slightly below the target US$4 billion.

The loans would help Lebanon meet short term debt maturities and avoid a financial disaster, as Lebanon simply has no means to repay the principal on large amounts of debt. Donor countries would also want to see Lebanon have a set of priorities with which to implement the reform programme, free from political agendas which may hamper economic progress and development.

Since the demise of Rafik Hariri, events in Lebanon are not doing justice to the legacy of this great son of Lebanon. The two main “forces” – March 14 vs. March 8 groups – have been “playing” the sectarian political tug-of-WAR for quite some time. They are the proxies’ of foreign interest in the region. And the real victim is the beautiful people of Lebanon, and I mean it literally. After 15 years of civil war, the people deserve better leaders who are less corrupt and more nationalistic.

The more dangerous challenges have emerged in the form of a substantial drop in security levels, a significantly more unstable political environment and the revival of that most powerful of Lebanese diseases, confessionalism.  Some Lebanese government officials have been at best lukewarm on the subject and very little effort being made for the preparation and drafting of detailed presentations and economic plans. Lebanon also has demonstrated difficulty in complying fully with its promises made twice before, at the first two Paris handouts, especially after Paris II in November 2002. 

Lebanon has a persistently high current account deficit, while the government debt-to-GDP ratio is one of the highest in the world, giving rise to large recurrent financing needs. Financial stability of the system rests squarely on continued inflows of deposits, which depend on domestic political stability and a favourable regional environment. Banks’ expansion abroad has made them further vulnerable to regional developments. New vulnerabilities could emerge from the slowdown in real estate and if banks take excessive risks to compensate for falling interest rate margins.

In addition to the challenging global and domestic environment, the current conflict in Syria is creating a great deal of uncertainty. Further escalation could have major political and economic repercussions for Lebanon given the close ties between the two countries.

In short, Lebanon continues to perpetuate the symptom associated with the long years of “foreign interferences” and the economic mismanagement. Corruption and governance problems have been identified as a major constraint together with scarcity of skilled and qualified labour, which is experiencing massive emigration.

Lebanon post-conflict environment is ridden with social and political complexities; lack of institutional capacity within line ministries and inter-agency rivalries. Project implementation was hampered by implementation problems, institutional bottlenecks, political instability and the external turmoil. The reasons for slow implementation include the complexity and sensitivities of the political and religious environment in Lebanon.

The political bickering, particularly over privatization have produced no substantive results as much as there is no progress in the auctioning of concessions for the management of the mobile phone operators or other state institutions such as the Electricite du Liban (EDL), water and the telecoms. Infrastructure bottlenecks and structural dysfunctions are acting as key impediments to broad-based endogenous growth and are contributing to keep investments in productive capacity at low levels.

The problem is explained in part by the complexity of the political environment in Lebanon, characterized by a confessional system of governance and the resulting diffusion of political authority and decision making.

Lebanon therefore needs to find a political and economic consensus on key national issues. Based on present realities, much more work is required for the new Lebanon to become a reality. Political groups and leaders must review their position in line with the need to protect the real Lebanese political and national interest on all domestic and regional issues.  

Lebanon is a country with many contradictions due to its strategic and geo-politico location. Applying the words of a famous Mexican President Porfirio Diaz, I can say that Lebanon suffer from the same fate – “Poor Lebanon, So far from God and So Close to Israel”.    

For now, Lebanon does not have the luxury of peace and stability of Malaysia to fully utilise to grow and develop the country. Tun Dr. M can say it with the comfort of his well know record of Malaysia’s achievement during his administration. Lebanon, Mexico and the rest of the world may only dream of emulating Malaysia’s success story. It may not be a miracle but the magic lies in devising a formula to keep the country stable and peaceful. It is never easy BUT you have the secret formula to the Malaysian magic - done in your own pragmatic way!

Indeed your friend PM Rafik Hariri noticed this during his visits to Malaysia. He however did not live long enough to realise what you have been preaching all along .. “Only peace and stability can be a win-win formula.”

We thank Allah subha nahu wataala for His Anugrah to Malaysia!

Friday, 5 October, 2012  (Amended 23 October, 2012)