By Adam B. Elhiraika
Abstract: "This paper examines the causes and policy implications of the 1997-98 financial crises in East Asia from an Islamic perspective. The paper suggests that the crises may be better understood as consequences of internal contradictions in the interest-based financial system as regards risk and return sharing between financiers and entrepreneurs. The analysis challenges orthodox policy prescriptions and concludes that the Islamic principle of partnership in finance, which calls for profit and loss sharing and emphasizes the need for project finance, seems to provide the ingredients for the long-sought solutions."
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