Islamic finance Essay Example | Topics and Well Written Essays - 3000 words

Islamic finance - Essay Example In this regard, the Islamic financial system with the assistance of macroeconomic models is able to conduct their operations effective in the Islamic economy. Islamic financial system came into existence in the mid-1980s wherein this system was practiced mostly in the Muslim communities that eventually nurtured trade and commercial activities in numerous nations. Islamic merchants became the brokers of trade related activities in Spanish and Mediterranean regions, which helped in promoting Islamic finance amid European financiers and capitalists. In the modern day context, Islamic finance has made a huge impact in various parts of the world, as it has been promptly growing in the financial sector. Islamic finance is not just limited to Islamic nations, but it has spread to other nations wherein the Muslim community is quite large. It has been identified that there are over 100 financial institutions using Islamic finance and the system is presently practiced in more than 45 nations. Industries using Islamic finance have witnessed a growth rate of 15% in their annual turnover from the estimation of the last five years financial performance s. Accordingly, it has been witnessed that the market’s annual turnover has grown to about 70 billion USD as compared to 5 billion USD in the year 1985. It has been further estimated that markets, which use Islamic finance will witness a growth of 100 billion USD by next century. In reality, Islamic finance commenced successfully from the time when the Islamic nations obtained surplus profit in their oil exporting businesses. It will be worth mentioning that anatomic and macroeconomic reforms in the financial system, privatisation of industries, assimilation of the financial markets and liberalisation of capital have cemented the growth of the Islamic financial system (Iqbal, 1997). The paper is primarily intended to summarise the chapter ‘The Financial System and Monetary Policy in an Islamic

Chinas increasing presence in sub-Saharan Africa Literature review

Chinas increasing presence in sub-Saharan Africa - Literature review Example Kaplinsky, McCormick, and Morris (2007, p.3) note that China is one of the fastest growing economies in the world. The speedy development has particularly been experienced over the last few decades. The growth has been attributed to the economic restricting coupled with improved efficiency (Adisu, Sharkey, and Okoroafo 2010). Data shows that China was the third largest economy in the world in 2004, but at the same time ranked 129th in terms of per capita because it is the most populous country in the world with over a billion people according to the World Development Indicators (Bloomberg 2010). The Central bank of China projected that the economy of the country was to grow by 9.2% in 2006 (Trofimov 2007). However, as at the second quarter of 2006, the Chinese economy had grown by 11.3%, which was the highest in the world in 2006 according to De Lorenzo (2007). The growth in Chinese economy is also attributed to its active role in the global economy, particularly in Sub-Saharan countries where China has invested heavily over the last few decades. As at 2006, the Chinese economy was projected to overtake the U.K. and become the fourth largest in the world. China obtains more than 28% of its gas and oil from sub-Saharan Africa, which among the highest inn the world according to Ajakaiye (2006, p.11-13). Sautman and Hairong (2007, p.16-18) note that the growth of trade between China and Sub-Saharan Africa (SSA) has improved significantly over the last few decades. In this regard, the data available shows that in 2003, the transaction between China and SAA was valued at $18.5 billion, which was a significant improvement in comparison to the 2002, which registered $12.39 billion. (Swartz and Hall 2010). Presently China ranks among the top trading partners with SSA with Gabon being the second largest client after the U.S. Some of the SSA where Chinese investments are highly noticeable includes Kenya, Benin, Nigeria, Angola, South Africa, and Tanzania, Algeria and South Africa just to name but a few (Taylor 2006, P. 937-939). The Chinese companies, particularly the Building and Public Works (BPW) are competing actively against other companies in Africa (Muekalia 2004). This is evident from the Chinese increase in infrastructural projects, a field that many experts say China has high expe rtise as noted by Zafar (2007). China’s motives for its presence in Africa Oil deposits are arguably one of the reasons why China has had a lot of interest in investing in SSA. Kaplinsky, McCormick and Morris (2007, p.14) reveal that the government of China has all a long been very anxious regarding the country’s energy dependency. For instance, Kaplinsky, McCormick and Morris (2007) note that China was the eighth leading oil importer in 2000 and rose to fourth in 2006. China’s oil import was projected to increase to the extent that it was likely to overtake countries like Japan and Japan by 2010 (Fine, and Jomo 2005, p.76). ORAM (2005) cites that the dependency on oil imports present a major challenge to the international duty china intends to undertake. A report shows that Indonesia, Iran, and Oman, for a long time, have been the principle suppliers of oil to China (Anshan 2007, P.70). However, some of the oil producing countries that China has depended on is undergoing depletion such as the Indonesian oil reserves. Further, the U.S. has been able to consolidate its control over Middle East Oil except Iran since its intervention in Iraq (Wang and Bio-Tchane 2008). In addition, the oil deposits in