Oluşturulma Tarihi: Aralık 24, 2008 00:00
When it comes to the matter of Turkey’s pending first issuance of Islamic bonds, our reaction would be rather similar to that of late Chinese leader Deng Xiaoping who famously argued about economics: "It doesn’t matter whether the cat is black or white, just so long as it catches mice."
Economist Emre Deliveli expressed the same sentiment in yesterday’s Daily News: "For a country with an external financing gap, every penny counts." We agree.
So-called "sukuks" and other usury-avoiding financial instruments are a growing asset class. Turkey’s development of investment opportunities that cater to these sensibilities is not just reasonable, it is smart.
As we reported, Treasury officials are working on a plan to be presented to parliament that will create a bond mechanism reliant on rents of public property, or similar means, to offer investors an attractive return without a reliance on interest. Interest payments, of course, are regarded in some circles as a violation of Islamic principles. Instruments that take this sensitivity into account are increasingly sought after and are expected to be a $200 billion a year market. They can play a critical role to continue the foreign investment juggernaut that began in 2004. Turkey has allowed forms of private Islam banking, so-called "participation banks," since 1985. This new initiative will simply add public sector options for investors interested in Turkey.
We realize that some may seize upon this turn in financial policy events to decry an erosion in Turkey’s secular order or to further suspicions of a secret religious agenda by the ruling Justice and Development Party. Nonsense. This is a perfectly legitimate tool and many banking institutions, including giant HSBC, include such tools in their portfolio. Companies in Switzerland issue sukuk bonds and this has not led to anyone alleging a plot to impose Shariah law in the Alps.
We also, however, reject the argument of State Minister Mehmet Şimşek that these new instruments cannot be described as Islamic bonds. This makes as much sense as renaming interest payments "virtue premiums" to accommodate religious sensibilities. Name games should not be part of this new strategy.
Rather, our view would be that such instruments, catering to a specific and perfectly respectable religious sensibility, are simply tools within the large toolbox of socially responsible investment. We could envision the government similarly offering "enviro bonds" for investors who want to support wind power or "gender bonds" for those who want to support greater participation by women entrepreneurs.
In the coming year most countries will be enacting expansionary fiscal policies amid economic slowdown. So will Turkey. This is part of that and it is smart policy.