The Asian International Financial Centres (IFC) are growing in importance within the global economy. Increasingly they are becoming the control centres of financial flows and innovation. In...Show moreThe Asian International Financial Centres (IFC) are growing in importance within the global economy. Increasingly they are becoming the control centres of financial flows and innovation. In particular, the aspiring IFCs of Shanghai and Seoul have remarkably increased in status and competitiveness. This research discusses a possible explanation for their increase in competitiveness. Both cities have large systemic differences from the well-established Western IFCs, as government control and policies have been predominant in the East-Asian region. Nevertheless, they are flourishing in the international financial system based on market mechanism. During the Asian Financial Crisis, Asian centres have undergone many changes and multiple government reform policies have been carried out to enhance the financial sectors. Within this research, the influence of the crisis and changes in the determining factors for competitiveness are scrutinized. The four main determinants constituting an IFC set the parameters for the two case studies of Shanghai and Seoul. The results suggest that the government focus on rapid technological and infrastructural developments have contributed the most to the increase in competitiveness. Moreover, these developments are a part of a shift towards high-end technology industries and services and the overarching government-driven transition towards a knowledge economy.Show less
This research deals with the question what the economic system based on precious metals (the natural situation) looked like in the Muslim world and if the evolution toward fiat money violated the...Show moreThis research deals with the question what the economic system based on precious metals (the natural situation) looked like in the Muslim world and if the evolution toward fiat money violated the commandments of the sharia concerning riba, particularly riba al-fadl and riba nasi’ah? These two forms of riba apply specifically to gold and silver, designated in the Quran and Sunnah as natural money. The evolution of money described by Fox and Ernst consists of five different stages, namely the natural situation where gold and silver are valued by their intrinsic value. This situation is sharia compliant but in the next stage coins were valued at face or nominal value, a violation of riba al-fadl which prescribes the exchange of weight for weight. Bank money is seen as the next stage, and this is problematic regarding riba nasi’ah as the exchange of gold and silver is deferred whereas the sources prescribe exchange being done on the spot. Paper money convertible to gold is the fourth stage. This again constitutes deferred exchange of metals, but also riba al-fadl as there is no 100% backing of the notes brought in circulation. Fiat money is totally divorced from gold and silver and is always brought into existence as a loan with interest. Islamic finance hasn’t really engaged with the topic of the permissibility of fiat money, but it appears interest in the subject is gaining traction as most Muslims feel that from an Islamic perspective there is something fundamentally wrong with the current financial system.Show less
