ISLAMIC ECONOMIC MODEL AND THE PROBLEMS OF ITS APPLICATION IN RUSSIA
Renat Bekkin, Ph.D. (Law), lecturer at the Moscow State Institute (University) of International Relations of the Foreign Ministry of Russia (Moscow, Russia)
1. Fragments of Foreign Experience
The world’s first Islamic bank, Mit Gamr Bank, was set up in 1963 in a place called Mit Gamr in Egypt. The bank, which functioned on the interest-free principle, marked the beginning of practical implementation of Muslim economic theories. At the same time, a Savings Corporation for Muslim Pilgrims (Tabung Hajji) was founded in Malaysia to help accumulate funds for hajj in accordance with the Muslim laws. In 1965, a Cooperative Investment and Financial Corporation appeared in Karachi (Pakistan). Simultaneously, several similar institutions which can be described as savings investment structures rather than commercial banks appeared in Egypt. On the whole, however, the experiment failed; very soon most of the institutions which sprang up haphazardly at the grassroots level in all corners of the Muslim East folded.
The second wave of attempts at translating the Islamic economic ideas into practice under traditional (non-Muslim) economic conditions proved more successful. In 1975, the Dubai Islamic Bank began operating in the UAE, while the Organization of the Islamic Conference opened the Islamic Development Bank (IDB) with the intention of………………