UK To Issue West's 1st Islamic Bonds.

The British government on April 23 announced it was set to become the first Western state to issue Islamic bonds, seeking to meet what it believes is a significant demand for this financial product both inside and outside the UK. In what ministers believe will be an important gesture to Britain's Muslim community, the Treasury says it is paving the way for the launch of the first Shari'a compliant UK government bonds by 2008.

The move is unprecedented by any Western state. Shari'a compliant bonds have hitherto been issued by the governments of Pakistan and Malaysia and by corporate issuers around the world, but never by a Western state. The UK will not only be looking to issue these government bonds on wholesale financial markets. It will also be looking at using Shari'a compliant bonds to allow Muslims in Britain to invest in domestic National Savings products through banks and post offices.

The launch of Islamic bonds will help to bolster London's role as an international financial centre. The Treasury estimates that total Islamic finance assets worldwide, including private equity and bonds, exceed $250 bn. But London also believes its move will send a powerful message to the Muslim community, both in Britain and around the world, that the UK authorities are intent on engaging with them in ways that have not happened in the past.

UK officials held meetings with leading Muslim figures in the country - including the Muslim Council of Great Britain - at which the idea of launching Islamic bonds was discussed. Treasury officials on April 23 were quoted as saying: "We hope Muslim leaders will be impressed that we are now moving towards doing the technical work on this bond issue so quickly". (The reason for Islamic finance is that some Muslims believe the Qur'an prohibits certain practices that are central to Western commerce, such as the payment of interest and financial speculation).

The Hariri Court Case & Assad Position: As a UN's legal team last week completed its mission in Beirut and Damascus, the Alawite/Ba'thist dictatorship of Bashar al-Assad showed no sign of toning down its opposition to an international trial of those accused of involvement in the murder of former Lebanese PM Rafiq Hariri in 2005. The core of Assad's opposition to the proposed court is a claim that an international trial would undermine Syria's sovereignty. As head of state he is sworn to uphold the Syrian state's sovereign rights. The problem, however, is that UNSC Resolution 1644, setting up the international inquest into Hariri's murder, was issued under Chapter 7 of the UN Charter. Resolutions passed under Chapter 7 bypass the national sovereignty issue in the name of international law. Thus, if Assad continues his campaign to prevent the international inquest, he could find the state of Syria in direct defiance of the UN, a position which Iraq under Saddam's Sunni/Ba'thist dictatorship was in until March 2003.

Resolution 1644 includes adequate provisions for respecting and safeguarding Syrian sovereignty. All what is needed is for Damascus to co-operate with the UN in setting the precise modalities under which the inquest and the subsequent international trial would be conducted.

Syria's other argument is that, since it is prepared to try those of its nationals charged with involvement in Hariri's murder, there is no need for UN intervention. But that argument cannot hold. The Syrian regime's involvement in the murder now has become known worldwide.

In opposing the international tribunal, Assad is treading the path taken by Libyan ruler Col. Mu'ammar al-Qadhafi and the late Serbian dictator Slobodan Milosevic. For over a decade Qadhafi refused to co-operate with the international investigation into the destruction of the Pan-Am jet over Lockerbie in Scotland. The result was years of diplomatic and political isolation for his regime, translated into economic misery and social shame for his people. Having paid that price, Qadhafi ended up accepting what he had rejected for years, and that at a time he was obliged to take the worst deal on offer.

Milosevic and his immediate successors played a similar strategy in the name of nationalism. They kept their people in a state of denial about the atrocities the Serbian military had committed in Bosnia and Kosovo. Their argument was that, if crimes were committed, it was up to the Serbian judiciary to take action. In reality, however, the Serbian judiciary took no action until this month when it sentenced four officers to imprisonment on charges of murdering a number of Muslim youths in Bosnia in 1995. The Serbian defiance of the international community led it into a war it could not win. Milosevic was toppled and eventually taken to The Hague where he stood trial on a charge of crimes against humanity before he died of a heart attack.

Serbia's defiance has done great damage to that nation's economy, led to the secession of Montenegro from the rump Yugoslav Federation, and is setting the stage for secession by Kosovo. Serbia is not allowed even to apply for membership of the EU until it has abandoned its defiance on the issue of war criminals.

"By seeding a similar field", London-based Iranian journalist Amir Taheri wrote in Arab News of April 21, "Syria is already reaping a similar harvest. A vital agreement with the European Union, negotiated over years and designed to save the Syrian economy from slow death, has been put on hold. Diplomatic contacts with Syria have been curtailed to a minimum, leaving it increasingly dependent on the Islamic Republic of Iran. The Lebanese opposition, for its part, is trying to use the issue of the international tribunal as a means of furthering its own aims in the power struggle against Prime Minister Fouad Siniora's coalition government. The Lebanese branch of Hizbullah is determined not to let the UN set a precedent for intervening in the affairs of the region, a precedent that could later be used against the Islamic republic [of Iran]...". (The theocracy and Hizbullah are accused of having killed many Americans in the 1980s and 1990s - see news15-ArabSecurityQuartet-Hariri-Apr9-07).

Taheri added: "Hizbullah's position has nothing to do with Lebanon or the party's own genuine interest. Hizbullah...has embarked on a high-risk strategy just to please Syria and Iran, to the chagrin of a majority of Lebanese who are not necessarily anti-Hizbullah. For his part, ex-Gen. Michel Aoun, the Maronite [Christian] maverick who has joined Hizbullah in its fight against Lebanon's democratically elected government, opposes the UN role for even less laudable reasons. All that Aoun is interested in is to become president of Lebanon, regardless of how he gets there. His current calculation is that the pro-Syria camp in Beirut is still strong enough to choose Lebanon's next president. At the same time, however, he retains the option of betraying his Hizbullah and Syrian allies if they appear unable to get him into the presidential palace.

"A resolution passed under Chapter 7...cannot be put on the backburner. The international trials will take place, regardless of the Tehran-Damascus axis and the Aoun-Hizbullah alliance. The UN effort to find and punish Hariri's killers is part of a broader pattern of international justice which has already dealt with crimes in former Yugoslavia and Rwanda and is beginning to tackle crimes in the Darfur region of Sudan. It cannot be wished away simply because Tehran and Damascus oppose it. Wisdom dictates that those who were not involved in Hariri's murder help the international tribunal establish the truth about that most heinous crime".