Young scholars can lead growth

Fifteen years ago, New York native Taha Abdul-Basser had a set plan for his future. The Harvard student was double majoring in pre-med and comparative religions with the expectation that he would serve society as a doctor.

But his life took a different turn as Abdul-Basser, already a student of traditional Islamic disciplines, became involved with Harvard University's Islamic Finance Project as a researcher and found his new calling: Shariah.

"I always had an interest in traditional Islamic religious sciences with my early education coming from my father," said Abdul-Basser. "But I really stumbled across the opportunity to apply Islamic ethics to contemporary life."

At 35, Abdul-Basser is now a respected and in-demand Shariah advisor in the global Islamic finance industry and positioned to benefit from an acute shortage of qualified professionals in the sector.

Reflecting the change in times, many current scholars, including Abdul-Basser, now prefer to call themselves Shariah advisors or technicians to suggest that their duties are more professional rather than simply clerical. Professionally, it can be a lucrative endeavour. Scholars working on Islamic finance deals are paid consulting fees, depending not only on the services provided but also the seniority and fame of the scholar.

There's no shortage of positions, with every Islamic finance company having a Shariah board that monitors compliance, and ad hoc boards often set up for individual deals.

While there is no benchmark for fees, a renowned chairman of a Shariah board, for instance, could earn $50,000 (Dh183,644) to $100,000 per board as a result of retainer fees, fees for issuing edicts, audit fees and documentation fees. Junior scholars make significantly less. Abdul-Basser, who works full-time as Harvard's Muslim chaplain, sits on five international Shariah boards and served on six others that are no longer active. Juniors such as Abdul-Basser undergo an informal apprenticeship with senior scholars and move up the ranks as their expertise grows.

"It"s a process that never ends," he said. "The primary difference between the first and next generation of scholars is that institutions exist now, so the upcoming experts can be more focused on applying their expertise in Shariah to financial techniques, rather than institution building."

 

Top scholars dominate

There is currently no standard global training process or certification for a student of Shariah to become a scholar. Shariah scholars can come from a small village madrassa in South Asia or have an advanced degree in religion from Cairo's venerated Al Azhar University.

And well-rounded Shariah advisors are scarce. Islamic finance experts say that the first generation of scholars may have laid down the foundation to help establish the business, but many still lack the business acumen, technology and language skills necessary to help the industry evolve.

"Many of them are too set in their ways to take the steps needed to help the industry move forward," said one Gulf-based Islamic banker, who asked to remain anonymous.

"And the ones that have the skills are stretched way too thin. It's up to the next generation to help Islamic finance reach its potential."

The same scholars are repeatedly seen at the helm of Shariah boards.

"There are about 15 highly qualified internationally recognised scholars who are financially savvy and who understand modern finance," said Harris Irfan, head of Islamic products at Barclays Capital. "It's very difficult to get time with those 15 as they sit on dozens of boards and are in demand."

Out of the 132 scholars active within the Gulf Co-operation Council, the same top 10 scholars make up almost half of all Shariah board positions, said consulting firm Funds at Work.

 

Skills and knowledge

Scholars must think internationally, by improving their English skills and knowledge of Western business practices in order to be successful.

To that end, the Islamic Finance Council in the UK has developed the Scholar Professional Development Programme to train Shariah scholars in Islamic finance tenets, said Omar Shaikh, executive board member of the council. "It's extremely unrealistic for Shariah scholars to give opinions on such a diverse space in finance without being up to speed with understanding the language of the finance professional," he said.

While not offering a master's degree or specific certification, the programme provides 21 hours or roughly three days of workshops designed to teach financial basics for mid-level and new scholars that may not be as familiar with Islamic finance. The programme has already conducted training in the UK, Malaysia and Bahrain.

Shaikh said the next generation of scholars will be asked to do more than simply approve deals and financial structures. But Abdul-Basser said it was important for upcoming scholars to hold on to their roots and the teaching of their mentors even as the industry evolves. (Reuters)