Egypt and the IMF - An Economic Struggle for the Future of the New Middle East

By Younus Abdullah Muhammad

In the 2 years since the Arab Uprisings turned over the geopolitics of the Middle East, coherent outcomes have escaped concrete formulation. Debate amongst policymakers in the West tends to split analysis down traditional realist and liberal lines, but most insight has failed to acknowledge that political outcomes will ultimately be shaped by underlying economic decisions. Those decisions will have serious implications, not only for region, but for the future make-up of the global economy. Consequentially, the derivative political outcome may prove to determine whether the current unipolar order perpetuates or transitions into a balance of power system. In reality, the economic path chosen by Egyptians will largely determine the outcome of the Arab Spring and will resonate to affect the entire geopolitical order.

Egypt is the most influential country in the new Middle East. With the Arab world's most populous nation and a political-economy in rapid deterioration, meeting the aspirations that propelled initial uprisings will depend largely on the ultimate formation of economic structures in the country. A milestone related to Egypt's economic underbelly may have occurred recently. Almost 2 years after President Obama pledged $1 billion in debt relief and assistance, his newly appointed secretary of state, John Kerry pledged to release $250 million in aid contingent on President Morsi's pursuit of the conditionalities necessary to secure an IMF loan. The decisions, if fulfilled, would not only cement ties between the American hegemon and the Muslim Brotherhood but would sustain and extend Egypt's participation in an unstable and uncertain international financial order. There are substantial risks for both sides. In releasing aid now, the U.S. is essentially accepting a role for political Islam. In agreeing to IMF dictate, the Muslim Brotherhood-backed Morsi would essentially be accepting participation with an economic order many Egyptians view as contrary to their independent interests.  In reality, if economic principles endorsed by both Western and Islamic systems were advocated a great deal of cooperation and prosperity would ensue and an effective step toward an inevitable, multipolar order would be taken. 

Mr. Kerry's announcement was not met with much enthusiasm. His support was clearly contingent on President Morsi's backing of IMF conditionalites that would trim popular food and fuel subsidies that serve tens of millions of impoverished Egyptians. While he called the assistance, "a good faith effort to spur reform and help the Egyptian people," the crux of his message seemed to critics as a bit paternalistic, typical of a common view that the U.S. pursues its own interests while speaking rhetorically of humanitarianism.  "In light of Egypt's extreme needs and President Morsi's assurance that he plans to complete the IMF process, today I advised him that the U.S. will now provide the first $190 million of our pledged $450 million in budget support funds," Mr. Kerry stated. The decision also indicates that the U.S. has accepted a role for the Muslim Brotherhood in a New Middle East going forward.

As a result, the decision sparked the fury of Egypt's secularist opposition. They immediately signified an awareness of the implicit endorsement. Egyptian caricatures at protests portrayed Mr. Kerry wearing a beard and charged him with favoritism. Gameela Ismail, a leader of the National Salvation front explained, "You [the U.S.] have supported military rule, and now you are supporting a religious rule just because it serves your interests; President Morsi is taking us, with the support of the U.S., to another version of the Iranian State just because you want to implement your interests through the regime in Egypt."

But these criticisms are exaggerated and over-simplified, meant to appeal to populist anti-American and anti-Islamic sentiments on the Arab Street but void of nuance and actuality. Morsi has no intention of Iranian-style theocracy. And, in reality, secularists have no coherent economic vision. They too would undoubtedly covet IMF intervention were they in power. While western liberals may empathize with their social liberalism, they are not very popular in Egypt. They previously boycotted scheduled April parliamentary elections that were recently cancelled by the judiciary for fear that it may bring salafistes, not secularists, increased power. Public polling already shows overwhelming support for an end to the peace treaty with Israel. Additionally, favorable opinions of the U.S. in countries like Egypt have dropped considerably since the Arab Spring. The U.S. is acting in interests that want to prevent the rise of radicalism and that want to gain a foothold in the economy. With Arab economics in suspended disarray and the global economy still suffering instability, the hope is that IMF reform will prove mutually beneficial. That remains to be seen but the outcome will make or break the success of Arab revolutions.

Negotiations about IMF reform began shortly after the effective revolts in Tunisia and Egypt, two countries touted as success stories by the transnational lending institutions up until their economically-induced revolutions. The IMF offered a multi-billion dollar loan in June 2011, about a month after President Obama embraced the sentiments of the Arab Spring and pledged $1 billion in debt forgiveness. In that speech he emphasized a need for IMF-World Bank intervention but cited the fact they had overlooked corruption in the past. Additionally, his appointment of a academic, developmental specialist to head the World Bank since has strengthen the prospects for effective reform within the transnational lenders. Understandably, many remain skeptical.

The Supreme Council of Armed Forces (SCAF) that ruled Egypt through its democratic transition rejected the IMF loan, ostensibly because it resembled an assault on sovereignty but also because it threatened the military's dominant role over large sectors of the economy. A popular Egyptian Facebook page 'DropEgyptsDebt' stimulated effective Leftist opposition and Hamden Sabahi, who almost won the presidency, has touted a return to Nasserite, Arab socialism. President Morsi has endorsed IMF reforms. He classifies his economic platform as 'renaissance' and pledges to boost the private sector, limit the role of the state and attracts foreign direct investment (FDI). The question is how his platform will benefit the average Egyptian. IMF reform calls for raising taxes, repealing subsidies, fails to protect internal investment, open to foreign conglomerates and honors onerous debt. Such an agreement effectively resembles neocolonialism to many Egyptians and could provoke additional discontent.

It took until August, 2012 until a preliminary agreement was reached between President Morsi and IMF chief Christine Lagarde for a $4.8 billion loan. The proposed precursory conditionalities include higher taxes and a repeal of energy subsidies. In reality, servicing Egypt's $35 billion in debt to foreign banks already takes $3 billion per year in interest payments. That is more than the cumulative amount of subsidies. And because foreign lenders certainly knew that most of the money borrowed under Mubarak would assist the corrupt regime and embed authoritarianism. A recent delegation t Egypt of 50 American multinationals was led by Paul Hormats, a former Goldman Sachs executive. Banks like Goldman Sachs contributed greatly to the decline of the Egyptian economy under Mubarak, at least for the average Egyptian. A general critique of present IMF-World Bank practice is that it helps utilize the debt accumulated under dictatorship to enforce privatization and effectively limit true democratization. The $35 billion in private Egyptian debt certainly helped props up an economy that was guided by IMF-World Bank induced reform from the 1990's, reform that similarly served only the interests of indigenous and foreign elite. Many Egyptians fear that agenda will continue now, only substituting members of the Muslim Brotherhood for the Mubarak regime.

Because previous privatization schemes in Egypt relied on FDI and tourism, it will be very difficult, especially in lieu of foreseen Islamist governance, to sustain Egypt's present economic structure. It may also prove particularly difficult for average Egyptians to compete with large-scale foreign competitors. Thus many postulate that proposed reforms will hurt the poor and resistance is evident. Andres Bauer, IMF chief in the Middle East and North Africa, told the Wall Street Journal at the end of 2012 that, "the authorities intend to raise revenues through tax reforms, including by increasing the progressivity of income taxation and by broadening the general sales tax to become a full-fledged value-added tax." However, when President Morsi angered secularists and pushed through an Islamist constitution, weeks of public protest forced the Egyptian government to request a delay from the IMF. The actual cause of the prolongation however remained mostly unaddressed in the mainstream press. The actual cause of delay was to the public's vehement reaction to a sudden decree by Egypt's prime minister during the constitutional protests that immediately raised taxes on luxury goods like cigarettes and alcohol but also on necessities like oil, cement, fertilizer, water and electricity. Within hours, further outrage forced Morsi to withdraw the order by posting on Facebook that he, "does not accept that the Egyptian citizen carries an extra burden without consent." So much for the simple repeal of subsidies and increased taxation the IMF requires as a precondition for the loan.

Such taxes and subsidy repeal could mostly hurt the poor, would do little to create pathways to economic opportunity or to dismantle totalitarian structures of economic privilege surrounding an elite largely connected to the Egyptian military in receipt of over $1 billion in annual aid from Washington. In fact, the proposed approach is not only eerily similar to IMF structural adjustments under Mubarak but reminiscent of rapacious tax and privatization placed on Egypt during its colonial era when the poor were taxed to pay off usurious international loans and to fund the extravagant lifestyle of the Khedive (see Rosa Luxemburg’ s Accumulation of Capital). Secretary of State Kerry's announcement that the relatively meager financial assistance was conditional on President Morsi's endorsement of IMF conditionalities is certainly an effort to appeal to short-term economic unrest in order to induce the U.S.'s own preferred long-term economic outcome.

Back and forth negotiations occurring for almost two years represent one reason many Arabs suggest the U.S. backed the rise of the Muslim Brotherhood even before the Arab Spring. They trace the roots of that support to enforced parliamentary elections in 2005-06 and accompanying neoliberal reforms that brought prosperity to many Brotherhood members. Secularists of all ideological stripes see the release of aid now and an explicit endorsement and as an effort to replace the secular authoritarianism of Mubarak with an Islamist alternative. This is something leftist dissidents like Noam Chomsky have described as typical of a long history of U.S. efforts to "prevent democratization." He states support for Somoza's Nicaragua, the Shah's Iran, Marcos in the Philippines, Duvalier in Haiti, Chun in South Korea, Mobutu in the Congo, Ceausescu in Romania and Suharto in Indonesia as authoritarian regimes not unlike Mubarak the U.S. supported in the name of economic liberalization only to be abandoned at the moment populations removed them from power. Nearly every one of these countries was immediately subject to IMF-World Bank intervention (see Naomi Klein's Shock Doctrine).

Support for entrance into the West's economic agenda precedes any concern with democracy. As a result, in almost every instance, most of those countries retain democracy but still suffer from rapacious elites that control the economic arena, and thereby politics. The apriority assumption that that the benefits of free market doctrine led to effective democratic reform have allowed for a mostly unrecognized correlation between things like torture and IMF-World Bank intervention. What the 1993 Vienna Conference celebrating the Universal Declaration of Human Rights once explained as, “the alarming evidence of massive human rights violations in every part of the world as a result of the international financial institutions or the Washington Consensus," generally continues. Willing compliance with the neoliberal norms Thomas Friedman used to refer to as the 'golden straightjacket' guarantee that regimes will retain favorable coverage that touts the path to democratization in exchange for compliance in opening up the economies to foreign penetration and, as a consequence, political influence.

Far from conspiracy theory however, this necessitates awareness that economic interests and not concern for democracy drives behavior in the international arena. Those in the Arab world may recognize a western hand in their internal politics but they would do much better were they to understand they have the potential to effectively pursue their own interests. Were they to balance economic cooperation with the international community and a respect for sovereignty, they could induce an Arab block of rapid development while generating a general spread in the global balance of power.

All international politics represents a shadow cast by a transnational economics. In reality, a very real privileged global elite dictates much of policy. Rising inequality across the world is the rational consequence of such power imbalance, extended since the end of Cold War conflicts. While the U.S. hegemon struggles to maintain its relative dominance, most do not understand the effects its exorbitant economic privilege grant it in the international arena. While developing countries like Egypt are told to raise taxes, repeal subsidies and balance budgets to take on foreign loans, a U.S. economy carrying its own exorbitant debt and special-interest subsidies has used its status as the global reserve currency to print money, buy its own bonds, bailout a bankrupt financial system and exasperate enormous deficits. Similarly however, this series of bailouts, stimulus, low interest rates and the like have primarily benefited transnational elite's interests.

Fareed Zakaria explained this imbalance in a recent Foreign Affairs article saying, "When Western governments and international organizations such as the International Monetary Fund (IMF) offer advice to developing countries on how to spur growth, they almost always advocate structural reforms that will open up sectors of their economies to competition, allow labor to move freely between jobs, eliminate wasteful and economically distorting government subsidies, and focus government spending on pro-growth investment. When facing their own problems, however, those same Western countries have been loath to follow their own advice."

Indeed, since the near collapse of 2008, U.S. Federal Reserve policy has pumped liquidity into an American economy everyone knows will continue to suffer from pernicious public and private debt. In reality, the insertion of liquidity (QE 1,2,3...) has exasperated income inequalities domestically; U.S. unemployment remains high and jobs are paying much less while statisticians under exaggerate core inflation. While such intervention has ostensibly been to help banks earn their way out of negative equity resulting from bad loans made during the real estate bubble, it has actually only shored up multinational firms and private, too-big-to-fail international lenders so that they can invest overseas and control the future of a globalized economic system where it is anticipated growth will have to come from the developing world.

The Fed's zero interest rates may have artificially inflated stock prices to all time highs but American multinationals that make up the stock indexes now make most of their money overseas and stimulus and cheap money have accumulated an approximate $1.7 trillion on corporate books corporations currently pay no taxes on because they are designated for eventual investment overseas. In fact, inflation induced by the Fed's QE2 policy sparked the initial protests of the Arab Spring which were largely a reaction to rising commodity prices. The primary reason the U.S. endorses Egypt's participation with the IMF today is the prospects it will facilitate an opening for foreign investors and put those dollars in circulation to preserve the currency's dominance. In a sense, the IMF's existence is to serve as a mechanism for inserting countries of the developing world in participation with an imbalanced system. This system has tended to favor repressive transnational (and mostly Western) capital to the powers, also typically abused, of sovereign governance.

The potential to alter some of that imbalance may lie in the Arab world. Having suffered first from colonialism and then from authoritarianism, the 30-plus countries that make up the modern Middle East have virtually undeveloped economies, rich human and cultural capital, natural resources and 350 million consumers. If the Arab League were a single country, its GDP would have been $1.9 trillion in 2010. And a recent 5-year study by the Institute for Liberty and Democracy found that, 82% of businesses and 92% of landholdings were unrecorded and thus unprotected by the rule of law." That led the study to estimate the size of Egypt's "extralegal" economy at $350 billion, six times the level of FDI in Egypt. Additionally, the 2002 UN Arab Developmental Report may have highlighted inequality, suppression of freedom and lack of intellectual and technological contribution but it also stressed that the region holds the lowest level of abject poverty, no doubt a consequence of culture, religion and the remnants of an Arab socialism that once made Egypt especially influential.

Global powers are obviously aware of this economic potential. European and South American countries, Russia, China, Turkey, Iran, and others have made significant proposals for major economic cooperation since the Arab Spring. The New York Times called a recent conference organized by the U.S. Chamber of Commerce in Cairo as, "one of the largest trade delegations ever." Nevertheless political gridlock and sustained violent contestation weakens the prospect for the stability that could allow for true sovereign economic development and, in turn, successful political outcomes.

Thus, the early struggle for democracy in the New Middle East may prove a contest of economic positions. At this time secularists have diverse and discombobulated platforms and Morsi's backing of the IMF agenda may backfire. As a consequence, the true beneficiaries may be the salafists and that might actually not be so bad, even as it pertains to U.S. interests. The salafists have criticized Morsi's use of international loans on the grounds that they are explicitly un-Islamic and bear interest. They recently published a list of Brotherhood who have been granted influential government positions and have cited gains made under previous neoliberal reform by key Brotherhood members. The salafists, Al-Noor party based its economic model on Brazil during the run up to their successful parliamentary elections. No doubt their reference to Brazil is a challenge to the military. Today Brazil is a rising economy and democracy but it was run by a right-wing military dictatorship from the Kennedy-era into the 1990's. That dictatorship conducted its coup and preserved its power with Washington's explicit backing on the grounds it "created a greatly improved climate for private investment."

But economic outcomes in the Arab Spring will be as much about what happens to the global economy outside the Islamic world as within it. If the global economy returns to recession and crisis in the medium term, Egypt will be jumping aboard a sinking ship. Because modern mixed economies are compatible with Islamic economics and a role for the Islamic sharia is evident in all polling of the Arab world's majority, Egyptians should encourage foreign investments and participation in the international order while developing a modern Islamic economic system. There is no doubt Egypt suffers from a lack of economic freedom. The 2013 Index of economic Freedom published by the Heritage Foundation documents totalitarian practices and an actual decline in economic freedom since the Arab Spring. Where IMF reform concentrates on repealing subsidies, it would do much more to enforce the repeal of regulation and legal mechanisms that privilege an Egyptian elite and to promote the break up statist monopolies in favor of Egyptian entrepreneurship granted protections form competition from foreign conglomerates. That would effectively address underlying Arab concerns while preventing similar outcomes in the past that enforced authoritarianism. It would also induce prosperous relations between Arab governments and Western nations who would garner leverage to guarantee pluralist politics and liberal reform that could achieved the expressed objective of economic penetration and foreign investment.

A modern Islamic economics is completely free market. Subsidies and price controls are clearly considered illegitimate in Islam but the poor still benefit because there must be a coincident equality in opportunity and protection under the law that crosses ethnicity, religion and gender. The embedded emphasis on charity, education and government investment in infrastructure, technology and etcetera can only ensue with a write-down on the onerous Egyptian and confiscation from those that benefited from past corruption. This alters the role of the state so that it may restructure international loans and build on the already existent social service networks that helped to bring Islamists to power. The IMF, like Washington, would have to be willing to cooperate with Islamist regimes but collaboration along economic lines with emphasis on cultural nuance could induce an era of prosperity and effective relations that could revamp the entire global economy.

Additionally, the expansion of a shariah-compliant financial industry over about a generation creates the potential for innovative products like sukook bonds that are attached to the underlying success of projects and thereby avoid the prohibition of interest, placing borrower and lender in shared profit-loss relationship. Other instruments like musharaka and mudaraba profit-sharing mechanisms set a basic structure for the sophistication of both capital markets and micro lending. The potential issuance of the gold dinar and silver dirham, required for zakat (charity) payment, provide a hedge against inflation and devaluation from central banks trying to print their way toward recovery. There are many methods for the issuance of a region-wide currency. In fact, there is much in the Islamic order that would benefit the Arab block and would help to alter IMF reform so that it effectively eases the need for austerity and transition to free market practice. True Islamic economic reform could open up the Egyptian economy in a manner that benefited the average Egyptian. For many reasons, it would be in the interests of all Egyptian politicians to recognize the Islamist majority, discuss the benefits with secularist skeptics and consider negotiations with the IMF and other foreign investors as a mechanism for dispelling the myths around the negative effects of Islamization and, at the same time, Arab concerns about Western conspiracy and loss of sovereignty.

Additionally, a truly "New" Middle East will only prove successful if it can promote regional cooperation. The Oxford Centre for Islamic Studies recently categorized the Arab world's economic plight as due to "market fragmentations" - a consequence of centralized privilege and authoritarian economic networks. The institution documented that red tape, poor infrastructure and other barriers add 15% to the cost of Egyptian clothes and 10% to goods shipped in the region. It is actually more expensive to ship goods between two Middle Eastern ports than to send them from the region to America. If the rise of Islamist governance from Syria in the East to Morocco in the West can produce Arab cooperation and alter these trends, the entire region would become part of the global supply chain and its location, common language and connection to other majority Muslim societies would formulate the rise of a regional block no less magnificent than the rise of China or India.

And so, while participation with the international community is beneficial and necessary, it is also important to recognize the dangers implicit in allowing economic policy to be dictated from afar. An important example which would probably gain the appall of many ultraconservatives is the rise of modern India. India remained nonaligned throughout the cold war. Like Egypt, its roots are in British imperialism and an anti-colonial struggle. It attained independence from a puppet regime backed by the British in 1947 and while Pakistan remains in despotism and debt largely as a result of its reliance on Washington's transnational institutions, India took an independent path in its rise as a growing democratic power. Historians like to credit liberal ideas inherited from the era of colonialism as influencing India's rise but a new book Righteous Republic by Ananya Vajpyi documents that India's nationalist leaders drew their ideas from the indigenous Hindic texts in recreating their country. Many of these traditional ideas were also compatible with contemporary Western liberal principles. The Muslim majority in the Middle East today would do a great deal of good were it to learn from the Indian experience. India today is not perfect but continues to evolve and few doubt its role as an influential international power. All of this is to suggest that the economic platform of the New Middle East must properly be viewed as needing to balance between participation with contemporary norms and the populist currents that demand freedom and justice and that have propelled the Arab uprisings.

The modern economic paradigm is the cause of exasperating discrepancies in income levels across the globalized world and the fundamental reality is that democracy has become increasingly subverted by an elitist interpretation of free market doctrine. Because the protests that sparked the Arab Spring were as much about economic opportunity as politics, a clear economic platform would go much further in redirecting sustained tensions into productive activity than any political appeasement. The Arabs demand freedom and, while underdeveloped, a truly Islamic economics is the best hope. It incorporates the best of free market doctrine while its prohibitions of interest and blind speculation have the potential to create an Islamic version of contemporary calls for a more conscious capitalism. In a world shifting from one of unipolarity to a balance of power system, the Arab world must utilize its common culture, language and religion to formulate a sovereign block that can contribute to altering the international arena.

That also means that antagonist anti-Americanism and radical populism will do little good. However Egyptians and Arabs generally, should look at the facts and be weary of participation with transnational institutions like the IMF. A rich history documents its subversion of democracy through primary support of a free market doctrine that has tended to preserve authoritarian political structures. As Dr. Henry Kissinger put in his book Diplomacy, which John Kerry quoted from extensively in his secretarial confirmation speech, "For the greatest part of humanity and the longest periods of history, empire has been the typical mode of government? Empires have no interest in operating within an international system; they aspire to be the international system. Empires have no need for a balance of power. That is how the U.S. has conducted its foreign policy in the Americas, and China through most of its history in Asia." Today's imperial institutions serve the interests of global capital that trumps the powers of social protection typically attributed to the nation state system.

The Muslim world is all too familiar with the process. It was born with the collapse of an Islamic caliphate that once united the region, was carved by the betrayal of the secretive Sykes-Pichot accords, creating nations led by secularists loyal to colonial powers. Support for authoritarianism and efforts to prevent sovereign development have been commonplace since but so too has a general internal backwardation. Understandably, anti-Americanism is rampant, but it is most important to recognize that the U.S. operates not primarily on humanitarian concerns but in the pursuit of its own interests. The U.S. economy is the most powerful and dynamic in the world and its democracy one of the most developed. Its not that it seeks to support corrupt dictatorship but it is undeniable that has often been an unintended consequence. Today, the U.S. government is just as controlled by corporatist and transnational, foreign interests as are the countries of the Middle East. Effective economic reform and cooperation could contribute greatly to rising demands for reform in the international arena and even help prevent a return to global recession.

Secularists, Muslim Brotherhood and Salafist leaders would do a great deal of good were they to realize this and not repeat past mistakes that used anti-Americanism to generate political allegiance. Were such developments to induce a model for regional reform and international cooperation, the Muslim world will play a significant role in the emerging balance of power system. If things continue toward division and disputation, the region will remain insignificant and the powerful will continue to divide its wealth and prosper from exploiting its strategic resources and location.

So too, American society suffers from a decline in infrastructure, unequal distribution of wealth, the harmful effects of borrowing and interest, over a decade of senseless war in the Muslim world and a xenophobic population ignorant of international affairs. The development of an Islamic economic block would even indirectly contribute to healing those problems. Recall that Americans first in Wisconsin, then with the Occupy Movement attempted to emulate the spirit of the Arab Spring. People everywhere are inspired by social struggle that represents true justice and progress. While in Egypt, Secretary Kerry asserted that, "the best way to ensure human rights and strong checks and balances in any democracy... is that there is the broadest possible political and economic cooperation." However, that is a principle that underlies the rhetoric of all regimes whether they be communist, capitalist or Islamic. The proof, for the new democracies of the Middle East and the U.S. hegemon that suggests it backs them will be not in the rhetoric but in in the substance of policy and practice.

Younus Abdullah Muhammad is a Muslim American and master in International Relations. He is the founder of IslamPolicy.com but is presently incarcerated in the U.S. Federal Prison System. He can be contacted by emailing islampolicy@gmail.com

RECOGNIZING THE ROUTE TO ISLAMIC REVIVAL:  REFLECTIONS TWO YEARS AFTER THE ARAB SPRING

By Younus Abdullah Muhammad

It has now been two years since Tunisian street vendor Mohammad Bouazizi audaciously set himself on fire on December 17, 2010 and sparked the ongoing Arab uprisings. There is no doubt the act was a product of much more than Tunisian governmental oppression. True elaboration about cause requires a multidimensional analysis considering local, regional and global socio-religious, political and economic variables. But as we near the two-year anniversary of the Arab Spring perhaps the most apparent awareness we need to explore is the prevalence of a clash of civilizations, typically proposed as occurring between Western secular and Middle-Eastern Islamic worlds, now manifest internal to the lands that were once Darussalam.

After over a decade of war, a global recession, an Arab Spring and other variables of instability a tendency to interpret events through a cognitive cultural bias that favors such a bifurcated worldview is playing out in the Muslim world itself. For many reasons that is not unexpected but that perspective clouds the prospects of peace. Many practicing Muslims resent the West and reduce internal anger and frustration to external manipulation. For secularists, this view attributes stagnation and decline to a barbarian civilization and fears a rising Islamic influence. These simplistic perspectives help propel perpetual conflict. Two years into an Arab Spring we are now witnessing the manifestation of this divide as secularists and Islamists vie for influence in an altering Middle-Eastern order.

But such conflict need not cause pessimism. An enhanced ability to conversate about Islam, its role in society, its value as an all-encompassing ideology applied in the modern world and especially its role in the political spectrum presents an opportunity to advance an evolving Islamic revival. However true revival is not possible under the clash of civilizations paradigm which only destroys and cannot develop. The Islamic tradition renders all explanations that blame the West for decline inoperable; the Quran says, "Allah will never change the blessing He has bestowed on a a people until they change what is in their ownselves. (8:53)" Concentrating on an internal cause of decline leads to the realization that the eternal principles of the Islamic tradition pose pathways to much-needed enhancement in the principles and practices of governance and in all institutions of society generally. Allah says, "Only in the remembrance of Allah do the hearts find rest. (13:47)" For all the material fruits of the secular age, it is important to recognize widespread misery and corruption. Governance in Islam is a means to an objective dedicated to facilitating the worship of Allah so that hearts find rest. Therefore, as we approach the two-year anniversary of the Arab Spring, it is important to consider that the mounting animosity and conflict can only be remedied by true and proper adherence to a faith so many claim but so few truly comprehend.

The division between secularism and Islam is evident across the Muslim world. That reality is highlighted by the unfolding conflict in Egypt over the formation of a new constitution, expected to enhance Islamic influence on governance. Muslim Brotherhood-backed President Morsi's decree to temporarily bar a secular judiciary from challenging his presidential order has united an anti-Islamist opposition of Mubarak loyalists and liberals and exacerbated the faultiness that mark most Muslim-majority countries. However, where western powers once backed Arab authoritarianism for fear that Islamic democracy meant, "One man, one vote, one time," protesters seem to unwittingly support the same sentiment and reject the majority-rule basis of democracy. It is awkward that the liberals that sparked the protests in Tahrir Square are essentially expressing a preference for a Mubarak-appointed corrupt and obstructionist judiciary and are ignoring a constitution that is in so many ways superior to the previous order. It recognizes full rights of woman, sets term limits, provides a flexible definition of shariah in a Muslim majority country, and paves the way for general democratic and economic reform.  Morsi has carefully navigated his position up unto this point and a constitutional referendum is still set for December 14, but ongoing turmoil will fuel criticism which Morsi explained away in a recent Time Magazine interview by saying, "We're suffering, but always a new birth is not easy, especially if it’s the birth of a nation." Still, the observer cannot miss a widespread irrationality that provokes a stew of misinformation, conspiracy theory and rage and points to the very real potential for self-inflicted destruction of the gains afforded by the Arab Spring.

That danger is evident everywhere. In the North African countries of Morocco, Algeria, Tunisia and Libya, all former homes of European colonialism, similar ideological friction has been exposed. in Morocco, where protests were small and largely led by secularists, the popular King Muhammad VI granted constitutional and parliamentary reform that ushered in an Islamist majority and provoked fear of eventual takeover. In Tunisia, democratic elections produced a victory for the moderate Islamist Ennadha party who has thus far worked alongside its secularist competitors at political reform. Muslim intellectual Tariq Ramadan says that Tunisia, "appears to be best situated to bring about a genuine change of regime, to overcome the false debates over the nature of the state and to avoid the secular-Islamist polarization." However, a rising salafist influence there cannot be missed and the organization of less-moderate Islamist movements to demonstrate for things like the veiling of woman at university to protests over the anti-Muhammad video in September have provoked widespread conversation in Tunisia with many calling for the banning of Islamist movements altogether and many criticizing Ennadha as a secular party in disguise. In Libya, the divide between secularists and Islamists was highlighted in the aftermath of the violent attacks against the U.S. Consulate in Benghazi, but in reality Libya is the only country of the Arab Spring where elections produced a secular parliamentary majority. That outcome has a lot to do with Western influence; we now know that Libya's National Transitional Council promised France 35 percent of Libyan oil exports before NATO intervention and Economist Magazine recently predicted Libyan economic growth at 12.2 percent in 2013, by far the highest in the Middle East. That will lead to foreign investment and guarantee external influence on political outcomes, but the violence of radical's at the U.S. consulate hints at a possible correlation between jihadism and levels of western influence in the post-Arab Spring order. Islamists have also utilized a newfound freedom of expression to insert their alternative voice. It is noteworthy that recently deceased Al-Qaedist Abu Yahya al Libi's brother ran unsuccessfully for parliament and that the group blamed for killing the U.S. ambassador had its headquarters burnt to the ground by secularists.

In the Levant the divide is evident as well. In Palestine, the Gaza Strip is controlled by Hamas, the West Bank by Mahmoud Abbas and the Palestinian Authority. That divide was an outcome of near civil war in 2007 and with new elections on the horizon, the Palestinian struggle for statehood has taken two twists: Hamas seeks to benefit from Muslim Brotherhood support and recently gained in stature after enduring Israeli militarism while Mahmoud Abbas gained "nonmember observer status" at the U.N. General Assembly with a favorable vote of 138-9. Both "victories" are largely symbolic, as U.S. ambassador to the united Nations Susan Rice explained, "no resolution can create a state where none exists," and with no viable or contingent Palestinian state foreseeable (Israel immediately announced new settlement construction in the West Bank) it is likely that the futility of both party's efforts will only drive further internal divide. In Syria, the Sunni-majority is united against Assad but divided along Islamic and secularist lines as well. A reported rise in jihadism and a U.S. refusal to intervene continues to accelerate an Islamist identity amidst the resistance. With the elections over and reports of Assad's planned use of chemical weapons, it appears the global community is ready to intervene but the role of Islam in any future Syrian government is sure to propel future conflict and for jihadists, Syria represents and opportunity to reclaim the appeal of calls to jihad as a primary means of social alteration. In Lebanon, the crisis in Syria is exacerbating sectarian and secular-Sunni tensions and in Jordan protests against King Abdullah II in Amman over IMF-induced fuel subsidy cuts and political injustices have been led by the Islamic Action Front, a Muslim Brotherhood offshoot. The U.S., Israel and the Gulf monarchies remain in support of the Jordanian regime but stalled reforms and deteriorating economic conditions only fuel the flames of frustration and may produce eventual outcomes similar to those in the lands of the Arab Spring.

The oil-rich Gulf monarchies were able to increase spending and placate demands during the Arab protests but a newfound passion for opposition is evident across the region as well. Women demanding reform in Saudi Arabia have utilized YouTube clips to criticize archaic laws for example and the rise of the Muslim Brotherhood across the Arab world has the House of Saud fearing revolution while the Islamic scholars they employ recognize that new salafist ideology to the North poses a challenge to the apolitical monopoly they hold on creed. A political awakening amongst dissidents in Bahrain, Kuwait, the U.A.E., Qatar, Yemen and others is inducing critical thought and there is the prospect of a return to an Islamic Sahwa (awakening) of sorts which resulted in the 1990's from Arab opposition to the first Gulf War and could result as a consequence of Arab opposition to dictatorial rule today. While the threat of secularism is limited by the proximity to Mecca and Medina and the widespread wealth and ideological influence over Islamic voices everywhere, developments in the Gulf will likely contribute to shaping both opposition to secularism and support for strict-conservatism over Muslim Brotherhood-like moderation across the Muslim world.

Outside the Arab world, the divide is evident as well. In Afghanistan, the Taliban are set to declare victory in the graveyard of empires in 2014 and that effect on Pakistan may create reestablished safe havens for jihadi groups that drive Islamic identity and put a lot of tension on secularist regimes everywhere.  Recent reports from the law schools at Stanford and NYU document that Pakistan drone attacks cause abundant collateral damage and propel anti-western sentiment that pushes support for Islam in the political sphere.

Similarly, in Africa, where drone attacks are expected to increase, the efforts of Islamic groups from Sudan, Eritrea and Somalia in the east and Nigeria in the west are visible across the continent and Islamic influence is highlighted by the control of Northern Mali by the Al-Qaeda linked, Ansar al-Dine. Interestingly, Secretary of State Hillary Clinton recently called on Algeria's secular leaders to contribute to an Africa-led military intervention the West is organizing to retake the militant stronghold. She cited Algeria's, "unique capabilities that no one else in the region has," a clear reference to the expertise of Algerian secularists from having thrown our democracy when Algerian Islamists were elected in 1991 and subsequently embroiling the country in a bloody civil war that took over 100,000 lives. Of course, that previous result has a lot to do with the West's reluctant acceptance of Islamic democracy, but it is certainly not impossible to imagine a similar scenario of civil strife between secularists and Islamists in any of the lands of the Arab Spring as history unfolds.

For Muslims living in the West, the secular-Islamic divide is evident as well. Residing inside developed democracies gives credence to the value of evolved democratic political processes but Islamic identity is also ascendant in the Western world. And the tectonic shifts occurring in the Arab world will certainly influence the ideology of Western Muslims, but it is also likely that Western Muslims, especially the Arab Diaspora will generate counterinfluence as well. So far, it seems that influence will largely coincide with the secularist camp but one must not ignore growing conservative Muslim prestige, especially in Europe. It is likely that many of the arguments playing out in the Islamic world will stimulate debate amongst Muslims in the West, and that the outcome of those debates will contribute to an enhanced role for Islam everywhere. It truly seems as though we are entering an era the prophet Muhammad (saws) mentioned when he said, "The matter (Islam) will keep spreading as far as the night and day reach until Allah will not leave a house made of mud or hair, but will make this religion enter it, while bringing honor to one who accepts it and humiliation to the rejecter. Honor with which Allah elevates Islam and disgrace with which Allah humiliates disbelief."

No doubt the divide between secularists and Islamists is, at least partially, a consequence of Western efforts to influence the region going back well over 100 years, but it makes absolutely no sense to reduce the behavior and identity of tens of millions of people to nonsensical conspiracy theory or to blame Muslim Brotherhood inspired political parties for excessive moderation and refusal to implement total shariah law. While convenient for placing one's self outside the Muslim Ummah, in self-righteous indignation, these perspectives document a hopeless nature and inability to understand the importance of autonomy and self-determination, an important but mostly lacking component of the Quranic call. They also document a failure to understand the role ideas play in shaping constantly evolving societies. Rather than simply discussing faulty ideologies from outside Islamic societies, it is all the more important that those understanding the need for tassfiya (purification of the Islamic sources) and tarbiya (development of institutions and reliance, etc.) now exercise that methodology and calmly, rationally and patiently utilize the present confusion and opening to highlight the importance of grounding Islamic society on the Sunnah and Quran.

That means it is imperative that Muslims already grounded in the Quran and Sunnah not primarily concern themselves with the clash of civilization, secular-Islamic divide. Instead, they must call away from the belief that change in Islam is induced by the state. The Islamic tradition actually holds each citizen as an ambassador for the religion and the state as a reflection of the ummah's collective consciousness. The Prophet (saws) said, "As you are so are the rulers above you," so proper conceptions hold government as a product of the people and a reflection of the principles and practices that the people apply.

It is true that every 100 years the Islamic tradition holds that Allah sends a reviver (mujadid), but it is also true that Muslims in the past have not simply sate around waiting for the Mahdi as many do today. Al-Hasan reported that Allah's Messenger (saws) also said, "If death comes to anyone when he is seeking knowledge with the purpose of reviving Islam, there will be only one degree between him and the Prophets in Paradise. (Darimi)" Revival is a task for all.

Most scholars hold Umar bin Abdul Aziz (717-720c.e.) as the first reviver, for his was a political revival based on returning the reference point of all affairs to the Quran and Sunnah, codifying the corpus of hadith by preserving it in writing and thereby promoting society's epistemological reference to the text and traditions, but his alterations were grounded in a basic respect for justice and rationality as well. For example, he abolished the collection of jizya (poll tax) for converts which led to unprecedented conversions during his reign and when an advisor expressed concern about the subsequent loss of state revenue, the caliph simply explained that the Prophet (saws) was sent as a mercy for mankind and not as a tax collector.

Those enhancements induced a broader call for Islamic renaissance and were a product of his following the true methodology of the Khulafah Rashideen (rightly guided caliphs). Subsequent reforms would survive the Ummayyad dynasty and inspire social, political and economic alteration under the ensuing Abbasid era. The preservation of the Islamic foundation occurring under Umar bin Abdul Aziz led to the next era of revival under the great imams (al-muhadithoon) and inspire the codification of usool-al-fiqh, especially in Imam Shafi's Risala.  It is said that by the time Imam Shafi (150-204 A.H.), a Quraishi descendant, was brought in front of Abbasi caliph Haroon ar-Rasheed under charge of treason, they not only held conversation about Quran and Sunnah (for Shafi "Kitab wal Hikma" (62:2-4)) but discussed Greek logic and other sciences. For the scrutinous one navigating that early history, a struggle to preserve the root tradition while still appreciating the cumulative value of human civilization becomes evident and that is what is lacking in today's narrow-minded secular, Islamic debate, an ability to separate the religious from the economic, technological or political and in areas where such separation is not only applicable according to Islamic law but fundamental in preserving the wellbeing of those that adhere to the deen of Islam.

This brand of extremist literalism hearkens back to the root cause of civil disorder in Islamic history, to when the Khawarij judged Ali's decision to arbitrate with the Muawwiyyan camp as referring to men and not the Quran. Ali's response was that, "We have not given men the authority; we have made the Quran the authority. But this Quran is a writing set down between 2 covers. It does not speak. It needs men to interpret it" (see Tabari's Tarikh).  The society established by the Prophet (saws) always took an understanding of legislation that held consideration for the cumulative history before it. Islam is a continuation of the Prophetic message, as old as history itself. And much of what was established in it drew from an already existent society. The Prophet Muhammad (saws) did not reject the value of other civilizations. He took military strategy from the Persians by way of Salman al-Farsi at the Battle of Khandaq. Consequently Umar bin Al-Khattab (raa) adopted bayt-al-maal, a state treasury of sorts, which was a Roman concoction. There are actually innumerable examples of civilizational collaboration. But Islam's historical influence on the West is evident as well.

While Western civilization is thought to be an offshoot of Greek society, a more realistic assessment considers that Arab preservation, translation and advanced articulation of the Greek works made such influence possible.  Recognizing this makes one all the more cognizant of the reality that the European Renaissance stemmed not from European interaction with the philosophy of Ancient Greece but its interaction with the societies of Islam. Commerce in the Mediterranean and contact with Islamic Spain are the true sources for much of what we call Western civilization and enlightenment. Still, it is unfortunate that many "Islamists" today point to these past glories while refusing to acknowledge any benefits from the secular age. Such ignorance helps propel the clash of civilizations theory we see perpetuating and helps prevent advancement in the Muslim world.

Today there are many proponents of British imperialist Rudyard Kipling's classic claim that, "East is East and West is West and never the twain shall meet."  That voice is echoed by many Muslim ideologues. Popular and moderate Islamic scholar Yousef al-Qaradawi for example told his audience at a Friday sermon in Qatar in October 2010 that he affirmed Kipling's views after reflecting on the history of Western influence in the Middle East. That position is in line with Osama bin laden's assertion to Al-Jazeerah's Tayseer Alouni in an interview after 9-11 that the "texts of Islam confirm a perpetual clash of civilizations." But this perspective is true only in a limited sense and stems from an inability to separate religious doctrine (ibada) and its primary concern with the life after death from the affairs of the world (adat). This distinction was made in the last phase of the development of usool-al-fiqh and ijtihaad before the ummah's intellectual decline and by scholars like Imam Shatibi and Ibn Taymia. But the divide between religious/political realms is evident even in the earliest works on Islamic law formation. Imam Malik for example explained ijtihad, "The rule is that you examine the given case in the light of the shariah. If it is correct according to the shariah then consider its consequences in the context of the conditions of its time and its people. If by its mention your mind does not recall any evil, then submit it to reason. If you feel that it will be accepted by reasonable people, then you may give your opinion in general terms if the case relates to a matter that is generally acceptable. If it cannot be generalized then give specific opinion. If the case in question does not accept this process, then it is better to keep silent. That would be more in conformity with the welfare of the people, legal as well as rational."

The Prophet Muhammad (saws) and his companions (raa) were never blinded by such bifurcation with regard to the affairs of the world. A hadith in Saheeh Muslim, for example, reports that a Quraishi importer said in the company of Amr ibn Al-Aas (raa) that, " I heard the Messenger of Allah say the hour will not arrive until the Romans will be the most amongst the people." Amr said to him, "Watch what you say!" So he said, "I am saying what I heard the messenger of Allah say." So Amr replied, "If you say that, then there are indeed four qualities in them: they are the most judicious during a tribulation, the quickest to recover after a calamity, the quickest to attack after a retreat, the best of them to the poor, orphan and the weak and the forth is nice and beautiful: among people, they are the best in preventing the oppression of rulers."  That compliment and the ability to distinguish is also evident in a narration that reports Umar ibn Al-Khattab (raa) was once angered when he saw the Prophet sleeping on a straw mat while thinking of the Roman Caesar reclining in his palace.

The Prophet Muhammad (saws) consoled him by asking, "Oh Umar are you still in doubt about Allah's promise?" drawing his primary focus on the world to come but also distinguishing between the affairs of religion and state. Today many Islamists claim that secularism is refuted by the Islamic doctrine's comprehensive inclusion of political and economic affairs and the command to rule by revelation, but they largely ignore many important principles and developments that have been actualized only in the secular age are supported by the texts as well and therefore could be applauded. For many, establishing the Islamic state represents an end in and of itself that must reject all of Western influence. In reality it is only a beginning, as is evident from the Prophet's (saws) own gradualism in the first Islamic State in Medina. It is this misunderstanding that drives the tendency to explain internal decline on conspiracies hatched from afar and that prevents Muslims from embarking on a true path toward political revival.

An inability to consider the cumulative nature of human civilization and to rather divide the Orient and Occident has helped to make the originally unpopular theory of a clash of civilizations a self-fulfilling prophecy of sorts. And it is not merely the perspective held by Islamists, critical theorists and intellectuals such as Edward Said (Orientalism) have gone to great lengths in identifying the means and mechanisms the West has used to objectify and stereotype the Muslim world, thus confirming the perceived divide between the West and the lands of Islam. But the outcome of the present struggle in the Muslim world will depend on an ability to inculcate the beneficial aspects of socio-political, economic advancement promulgated primarily by the West over the past few centuries, while at the same time retaining autonomous identity and stressing a reliance on the constant principles of the Islamic tradition. If that realization is made, the Islamic world could one day find itself producing the type of critique of Western society that could inspire the next great civilizational leap, a return to organization that considers obedience to divine legislation a path to progressive change and not a justification for domination or an opiate of the masses.

Muslims must recognize that connections like these will not come from the state however. The Islamists crafting Egypt's new constitution recently saw fit to include and article that holds the state responsible for "ensuring public morality." It should be easy to understand why citizens of the Arab world would fear the potential manipulation of this clause for abuse of authority.  This is an indication that a state's legislation must consider the condition of a society. And a closer analysis of the history of Islam would reveal that preservation of the sunnah and referral to the tradition has never actually been a top-down endeavor.  All six of the Saheeh books of hadith were undertaken by the initiative of their authors. None of them were commissioned by any authority, whether of government or statist ulama. The general acceptance by the community of believers preceded the canonization of such works with respect to formulating practical law. The general sentiment propagated in the Muslim world today however is that all change in Islam comes from elite on top of the citizens. There is nothing wrong with calls to end such religious manipulation and justification for authoritarianism.

This is an important identification because today statist-traditionalists like those propagating so-called salafiyya in the Kingdom of Saudi Arabia also assure the state itself is responsible for reform and preserving Islamic conduct. That misconstruction, while actually seeking to preserve elite domination, power and prestige, is the source of backwardation. Practicing Muslim citizens everywhere must obey the state only when it conforms to the religion and they must first exist in a condition that necessitates Islamic governance; they must cultivate the need for a modern codification of Islamic law that separates from the adulteration of texts as mechanisms of justifying illegitimate power and control. Only that awareness can generate an understanding of shariah's timeless applicability in principle and its flexibility in application so as to serve as a progressive source of divine order. We Muslims should be working to propagate this true creed while realizing that getting caught up in divisive, self-righteous debate is unnecessary.

This is similar to an awareness the late Syed Qutb (ra) expressed in a series of tracts entitled, "Why did they execute me?" In them he discussed western conspiracy and the efforts of the Muslim Brotherhood then to, "demand shariah law," while "occupying themselves much of the time with localized and limited political movements." As an alternative he stressed, "the societies themselves as a whole have become far removed from understanding the Islamic aqeedah and from concern and respect for it and from Islamic manners, therefore the Islamic movements must begin with this fundamental matter and that is to revive the meaning of the Islamic aqeedah in the hearts and minds, and to educate and cultivate those who accept this call and the correct understanding with correct Islamic education and cultivation (tarbiyya) and not to waste time in current political events, and not attempting to bring about the obligatory Islamic system by seizing power before the Islamic basis is found in the societies." Still, he did not call for some return to a pristine and unadulterated anti-Western civilizational clash as many confused critics would have it. Instead, he stated emphatically in Milestones that, "It is necessary for the new leadership to preserve and develop the material fruits of the creative genius of Europe, and also to provide mankind with such high ideals and values as have so far remained undiscovered by mankind, and which will also acquaint humanity with a way of life which is harmonious with human nature, which is positive and constructive, and which is practicable."

The reality today remains similar, albeit with significant gains. Still, Muslim Brotherhood-backed groups are ascendant and cater to localized political issues in the name of pragmatism while the West conspires to promote a "democracy" that might preserve its neoliberal economic interests, the transnational might of its oppressive corporations and the machinations of its neocolonialist order. The concentration and obligation of all Muslims in the coming stage must be to help revive the Islamic tradition and referral to the Quran and Sunnah in personal affairs while calling upon others to do the same and formulating an appreciation and respect for many of the practices and principles that have underwritten human development for several centuries. Absent these identifications all "Islamist" development will turn into racial, nationalist or authoritarian fraud.

What we are witnessing is the fault lines and limitations of efforts at revival due to a lacking understanding of what exactly it means to refer to the Quran, Sunnah and methodology of the Salaf. However, where these limitations are utilized to preserve an even more sinister adulteration of the shariah by so-called salafis allied with the chief hypocrites that run the House of Saudi Arabia, the sincere one will recognize that a tectonic shift has occurred and will remain optimistic. Today there is a potential for a quantitative paradigm/ phase shift  in the Islamic Awakening. The potential is attached to the root of Islam and is the source of every 100 year regeneration. It is evident in the Prophet's migration as a minority in Mecca to majority in Medina and also in the rapid expansion of Islam from Spain to China during subsequent generations. The Islamic ideology induces exponential growth because the momentum utilized to suppress it actually provides the counter momentum for its eventual progress. Muslims today stand on the precipice of such a pendulum shift. Therefore there should be little concern with the secular-Islamist divide.

One of the surprising events of the past two years was the election of the newly elected salafist Al-Nour party in Egypt to 25 percent of the parliamentary seats in elections. The secular judiciary disbanded the parliament but such success highlights the underbelly of support for traditionalist Islam in Muslim societies and their platform is quite distinct from the Saudi-funded salafism that many conspiracy theorists claimed funded them. Muhammad Nour, spokesperson for the party, explained their success in an interview saying, "The liberal media is focused on us. They did our media campaigning for free... when they try their best to smear us, and then the people see what we do on the ground; the people understand that there is something wrong with the media not with us." However, the ideological, political and even material divides in the evolving Muslim world are an exact representation of the confusion and disorder of the collective Muslim ummah. As the Prophet described, "The believers in their mutual love are like one body where when the eye is in pain, the entire body is in pain and when the head aches the whole body suffers." However, we must also remember the Prophet's concern for the whole of humanity. In another hadith he (saws) said, "The hearts of all men are between two of the Compassionates’ fingers, as if they were one heart which He turns about as he wills." Then Allah's Messenger said, "O Allah who turns the hearts, turn our hearts to Your obedience (Muslim)."

To promote such conceptions, brothers and sisters should start creating networks that can enhance better understanding of current developments through a balanced Islamic lens and that might translate, discuss, and promote advanced ideologies, policies and perspectives in order to expand the foundation.  Communicating in lieu of the recent removal of additional barriers while overriding simplistic calls to a clash of civilization would contribute to promoting truly transformational change in accordance with what Allah and His Messenger established. For what Imam Malik said rings resonantly clear today that, "The last of the ummah will not be rectified except by that which rectified the first of it." However, what rectified the first of the ummah was not an affinity for theological disputation as much as a broader call for belief in Allah and its consequential social reform. That reform was instituted by the cultivation of self-first, followed by an influence of the reformed self on others and then the development of the ummah's collective consciousness so that the Islamic state will become a function of necessity and not the objective of idealistic desire.

Indeed for those conscious of inculcating the aforementioned principles, there is room for optimism. Somewhere between conspiracy theory and self-righteous conservatism lie the proper understanding of the interplay between Islam and the state, Muslims and the West and a balance between today's polarizing views. As Ibn Qayyim al-Jawzi (ra) explained that this understanding will grant those upon the proper methodology, "an ability to see the obscurity that others suffer, while they cannot see the splendor that you enjoy." he (ra) explains that truly grasping the message of the sahaba makes you, "excuse the ignorant as much as you can, while enjoining and advising them to do good with all your power. Then you look at them with two eyes: With one eye you recognize Allah's commands and prohibitions. Based on this you advise and warn them, befriend or disown them, giving them their rights and requiring yours. While with the other eye, you recognize Allah's decree and measure. Based on this you sympathize with them, ask forgiveness for them and seek excuses for them in matters that do not involve violation of Allah's commands and his Sharia (rulings). Thus, you engulf them with kindness, compassion and forgiveness, heeding to Allah's command to 'Show forgiveness, enjoin what is good, and turn away from the ignorant' (7:199)."

In the coming period we need to balance these two perspectives for that is the way of justice and truth and actual way of overcoming polarizing and self-defeating views. Let us look for the good in each other and truly desire for others what we want for ourselves, a life of peace, prosperity and security conducive to the Quran and Sunnah and common to the ambitions of all.  Let us not find fault in what others are not doing so much as we ask what exactly it is that we are doing, on a day to day basis for the religion of Islam. Let us see through the two eyes prescribed by Ibn Qayyim, for those eyes craft the lens of the sahaba, the martyrs and the mutaqeen. Surely that is the siratal mustaqeem, wake up ya muslimeen!

Current Mideast Crisis Presents Opportunity for Peace

By Younus Abdullah Muhammad

M.I.T. professor and social critic Noam Chomsky explains, in the preface to his alternative classic Fateful Triangle: the United States, Israel and the Palestinians (1999), that when he is forced to title public speeches, sometimes years in advance, he can always resort to a default entry he says, "always works."  That title: "The Current Crisis in the Middle East" constantly retains its relevancy. And so few have been surprised by the recent escalation of conflict between Israelis and Palestinians over the last few days, as militant rockets rained on Israel and Israel retaliated with disproportionate vengeance.

However, as Israel reservists and IDF soldiers mobilize on the Gazan border posturing for full-fledged war, it would do us all well to recognize that today's current crisis in the Middle East represents both the potential spark that could kindle world war and, at the same time, an opportunity to usher in fundamental alterations that could put the region on a pathway to peace.

There is very little likelihood of turning crisis into opportunity however. In order for the international community to capitalize on recent turmoil and deescalate conflict, the United States would have to alter what has been its absolute preconceived pro-Israeli stance. As U.S. politicians stress Israel's rights to self-defense and the mainstream American media continues its typically bias coverage portraying an Israeli state fighting for survival, there is a tendency to view any resolution to the ongoing conflict as necessarily coming solely from the people of the region themselves. And so politicians and pundits have resorted to pressuring Egypt's new Islamic government to exert pressure on Hamas and threatening to cut U.S. aid to Egypt as a means of inducing truce. But such pressure, even if successful, can only provide a temporary fix. The United States would do better to seek a permanent or at least long term solution which would have come from the U.S. itself. The U.S. should call for immediate comprehensive negotiations around a two-state solution.

In actuality, the international community has supported a two-state settlement along recognized pre-June 1967 borders with "minor and mutual modifications" since the Arab States first proposed it to the U.N. Security Council in January of 1976. Contrary to popular opinion, Israel opposed the first resolution and the U.S. vetoed it to make it disappear. The actual historical record documents an array of resolutions and negotiations since, all of which have been consistently rejected by a U.S.- Israeli alliance that excludes any potential foundation of a viable and contingent Palestinian nation. Recent developments suggest it is time to alter that stance. The outcome of the unfolding crisis has serious implications for future region-wide conflict. Hamas claims it simply seeks to end Israel's siege on Gaza and Israel claims it seeks only to defend itself, both assertions are in fact reductionist and refuse to account for contextual animosities that could fuel full-fledged war.

In fact, Israel fears the rise of the Arab world surrounding it and is threatened by a resilient Hamas regime. Since its legitimate election in 2006, Israel and the U.S. have been doing everything possible to undermine a functioning Hamas government. Many of these efforts have drawn enhanced advocacy and intervention from countries like Turkey, Iran, Qatar a newly Islamist Egypt and others. By making Gaza essentially the world's largest open-air prison, Israel has not only exasperated much of the Arab and Muslim world's animosity but has confirmed claims that a U.S. hegemony partial to Israel seeks democracy and the rule of law only when it coincides with its broader self-interests. In fact, it is erroneous to begin the narrative of today's conflict with the reassertion of Hamas rocket fire into Israel. The history of repression since Hamas's election in 2006 has born witness to a disproportionate level of Israeli violence and a refusal to entertain any political resolution as long as it included the elected party. Any further oppression and especially reoccupation of Gaza would almost certainly fan the flames of regional war.

Hamas has been emboldened by the Arab Spring and expects support for its objectives. However, it is unfortunate that they have placed thousands of citizens lives on the line in a clear endorsement of violence as a means of ending Israeli oppressions. While understandable, its efforts are much more a political ploy intended to delegitimize Palestinian President Mahmud Abbas, Hamas's chief political rival, who is pursuing a veto at the UN General Assembly to grant Palestine observer-state status.

The movement has certainly been inspired by the rise of the Muslim Brotherhood in Egypt and the recent visit and developmental aid promised by the Emir of Qatar. But their joining in on rocket attacks is clearly intended to appease jihadist criticisms and divert Palestinian desires to solicit truly democratic gains from the Arab Spring. Where Hamas once prevented attacks and preserved a ceasefire while seeking a political means to ending the embargo, their recent reliance on violence risks the enhanced international support that Palestinians have generated over recent years. These self-serving efforts could also backfire and lead to Gaza's reoccupation or propel a war with mass Palestinian casualties.

Hamas obviously seeks to pressure Egyptian President Mohammed Morsi to make a ceasefire contingent on Israel's ending the blockade. That outcome would prove a major victory for the movement. In fact, Morsi did send his prime minister to embed in the Gazan Strip as a sign of solidarity, but it is extremely dangerous to risk the reoccupation of Gaza and the lives of innocent Palestinians.  The balance of power is clearly in Israel's favor. The Palestinian rocket that killed three Israelis in Kiryat Malachi may represent the deadliest rocket strike ever on Israel from Gaza but in retaliation over 100 Palestinians have already died with many hundreds more severely injured. Additionally, many of the rockets fired from Gaza have been shot down by Israel's new, U.S.-funded Iron Dome defense system. There is nothing similar in the Gaza Strip.

Hamas may be depending on a response from the Arab world but any retaliation would jeopardize Egyptian legitimacy and be at the expense of rising international support for the Palestinian cause. As expected, Britain and the U.S. have already stressed Hamas's responsibility. Israeli attacks during Operation Cast Lead in 2008 were prompted by the rocket-fire of independent militants disconnected from the Hamas regime. The fact that Hamas is participating in this wave of attacks directly only gives Israel a means to declare self-defense under international law.

President Obama has stressed Israel's right to defend itself. Just days after his reelection, it is probable that the Israel-Palestinian issue will play a predominant role in his second term. When he was first elected in 2008, Saudi foreign minister Prince Turki al-Faisal penned an op-ed in the Financial Times that stressed the need to concentrate on negotiating a two-state settlement or, he warned, the entire region could go up in flames. Obama neglected the warning and now, four years later, the Saudi prince's admonishment indeed came to fruition, awkwardly however the flames of the Arab Spring have yet to reach either Israel or Palestine. But it could easily be argued that Obama's support for Arab authoritarianism and his preservation of an absolutely pro-Israeli status quo paved the way for revolutions that ushered in Islamist political parties and that placed Hamas in today's more complicated and advantageous negotiating position. It would do a great deal of good if the Obama administration were to revisit Prince Turki's admonition, for these sparks of conflict in Gaza, if followed by Israeli occupation stand the chance of igniting World War III.

On September 27th, Benjamin Netanyahu drew his "red line" at the U.N. general assembly seeking international support for an attack on Iran and pressuring the U.S. to back such warmongering.  Since then, the Iranian currency has plunged in free fall which threatens the ruling regime.  In Israel, Benjamin Netanyahu's Likud party recently approved joining forces for upcoming parliamentary elections with party of ultraconservative Avigor Lieberman, a definite warmonger who flatly rejects all negotiations with Palestinians. War in Gaza would present an opportunity for the troubled Iranian regime and an Israeli regime seeking reelection and international support for an attack on Iranian nuclear facilities. Iran could view assistance of Palestinians as a way of warding off dwindling Arab support. The Assad regime in Syria could see involvement as a last chance prospect for its preservation. Hezbollah, Turkish or Egyptian involvement could enhance their reputations. Israel could view retaliation in Gaza as a means of reclaiming legitimacy after the damage caused to its reputation after Operation Cast Lead. Rising salafi jihadist eminence in the Sinai and Arab world could seed even more militancy. An array of unintended consequences could spark full-fledged war.

The U.S can stop the nonsense immediately by realizing the necessity of an immediate and sincere push for negotiated peace. The Obama administration should broker immediate negotiations bringing in representatives from the entire region. The should realize that a two-state settlement along slightly modified pre-1967 borders is the viable option and should mandate it with certain conditions for all parties involved. Firstly, Hamas and the general government in Palestine should be forced to hold an immediate referendum to determine the question of Israeli recognition. They have long since claimed that they would recognize Israel's existence if the Palestinian population supported such a move. Thereafter, they should be pressured to accept an unconditional ceasefire in exchange for an end to the Israeli siege. The U.S. should also make its aid to Egypt contingent on its adoption of a constitution that preserves rights for women and minorities, peace with its regional neighbors and that opens up its economy to further trade with Israeli firms. And the U.S. should make its military aid to Israel contingent on its acceptance and adherence to the two-state solution. The Saudis, Iranians, Turks and others should be included and the negotiations should involve international observers from across the globe. Such an outcome is the only viable alternative to eventual all-out war.

Such an outcome would also induce a political, economic boom leading to an era of development never before seen in the modern Middle East. Such a development could also mark the onset of a progressive era in American politics, restoring its international reputation, especially in the Muslim world while rallying domestic support for Obama's stated objectives at home as well. Accounting for the altering global political and economic dynamic actually allows for the recognition that the necessary global political will exists to make a two-state solution possible; at least if negotiations begin now.

The U.S. was not always so rejectionist. In the wake of World War I President Woodrow Wilson, author of the doctrine referred to as Wilsonian idealism, organized an American survey of the Middle East. As scholar Ilan Pappe puts it Wilson, "wished to exploit the results of the war by disintegrating the big colonial empires in the name of the right to independence and self-determination." "In the Wilsonian vision, the Arab peoples, too, were entitled to the national liberations denied them during four hundred years of Ottoman rule." The survey would be called the King-Crane Commission, after academic Henry King and Charles Crane, a Chicago businessman. The commission polled the Arab world and found that Arabs were deeply opposed to the establishment of a Jewish state in Palestine and that such a development would produce long-term conflict and resentment.  They considered Arab animosities and the report concluded, "with a deep sense of sympathy for the Jewish cause, the Commissioners feel bound to recommend that only a greatly reduced Zionist program be attempted... this would have to mean that Jewish immigration should be definitely limited, and that the project for making Palestine distinctly a Jewish commonwealth should be given up." That report would not have a heavy influence on U.S. policy, but it did induce a balanced "Arabist" legacy that continued to play a major role in the State Department's formulation of Mideast policy, that is up until the American Jewish community founded the AIPAC lobby in order to delegitimize all Arabist influence.

That was during the Eisenhower administration. Today the effects of the Arab Spring have enhanced sympathy for Palestinian plight and ongoing turmoil in the Middle East that serves as a drag on a struggling global economy have paved the way for a resurrection in "Arabist" sentiment amongst academics, policymakers and the general population.

It is time for a more balanced U.S. approach the Israeli-Palestinian question and a truly transformational alteration in policy dealing with the region as a whole. The unfolding debacle sets the stage for such development. If handled diplomatically and with consideration to all parties involved, the U.S. could exploit the present crisis and craft an opportunity to assert long-lasting peace. Mandating a settlement along the lines of the pre-1967 borders with adjustments and minor land swaps to accommodate the biggest Jewish settlement in the West Bank could initiate the birth of a truly New Middle East and pave the way for unprecedented development that promotes both economic wellbeing and self-determination for the region's citizens as a whole.

On the eve of Barack Obama's first term, Israel launched its attack on Gaza and Obama remained silent. Now, on the eve of his second term, with failed promises of transformational change behind him, there is a risk that the Obama administration will utilize Egypt only to broker a temporary ceasefire. Such a move may reduce conflict but would exasperate the variables that would ultimately lead to regional war. Instead, all parties should be discussing long-term settlement.

Senator John McCain has already suggested that a high profile figure like Bill Clinton be sent to the region to referee negotiations but the Clintons represent a continuation of the pro-Israeli status quo and the PLA he once negotiated with at Camp David has been largely sidelined by the rise of Hamas highlighted by Shaikh Hamd bin Khalifah al-Tani's visit to Gaza to see Ismail Haniyah, prime minister of Gaza, but not including Mahmud Abbas who has been marginalized due to a betrayal of the Palestinian cause.  Only a truly transformation in U.S. policy persuasion can help to craft the kind of balanced and aggressive stance needed to facilitate a movement toward real negotiated peace. It would be much better to recognize the importance and necessity of assuming this stance now rather than waiting to rebuild a new Middle east from the ashes of World War III.

The Obama administration failed to get serious about a long-term resolution during its first term. As a result, the region underwent tectonic shifts that have radically altered the perspectives of all negotiating parties. This most recent episode has presented the result of these altered realities for the first time in real terms. While it is improbable the Obama administration will take such a bold and truly progressive stance, it is important to contemplate the possible consequences of an inability to broker Mideast peace. In a recent Washington Post editorial Dr. Henry Kissinger explained that religious division, the persistent threat of conflict and sustained misdevelopment in the Middle East pose not only a threat to countries in the region but to the Post-Westphalian nation state system itself. As Dr. Kissinger described it, the Sykes-Picot nation state system in the Middle East was drawn on lines completely foreign to indigenous identity.  He rightfully foretold of a potential breakdown that now emboldens the voices of violence when he explained that, "the more sweeping the destruction of the existing order, the more difficult the establishment of domestic authority is likely to prove and the more likely to resort to force or the imposition of a universal ideology." "The more fragmented a society grows, the greater the temptation to foster unity by appeals to a vision of a merged nationalism and Islamism targeting western values."  Sustaining the typical rejectionist and unconditional pro-Israeli U.S. position could foment such an evolution which certainly opposes the stated objective of preserving the interests of both Israel and the U.S.

Now is the time for true alteration. All parties involved have no choice but to accept such propositions.  An altered policy perspective based on the advocacy of a two-state solution along prre-1967 borders would lead to the reassertion of an Arabist counter to pro-Israeli stance of most influential U.S. policymakers.  This paves the way, not only for something that could look like a new King-Crane Commission but for comprehensive development that could include something like a Marshall Plan for the New Middle East. As the tension heightened over the weekend, President Obama was in Myanmar trying to complete his "Asian Pivot" away from the Mideast, but he would be better to redirect Air Force One to Cairo and in order to present a second inaugural speech in the Muslim world. However, this effort should stand in contradistinction to his merely rhetorical performance there on June 4, 2009. Instead, he should repeat his remark that it is easy, "to point fingers... but if we see this conflict only from one side or the other, then we will be blind to the truth: the only resolution is for the aspirations of both sides to be met through two states, where Israelis and Palestinians each live in peace and security," but this time he should follow the rhetoric up with concrete action. Such proclamations and implementation would almost document the President's common claim that America is "the one indispensable nation."  The other alternatives, whether they spark war tomorrow or some time down the road, could prove that all nations are indispensible, especially a Palestinian one the U.S. continues to refuse exists.

The Gold Dinar, the Silver Dirham and a Resurgent Political Islam-

Part III

By Younes Abdullah Muhammad

Part III : Financial Imperialism: Dynamics of the International Economy, the Arab Spring and Neoliberal Globalization

Please see Part 1 and Part 2 of this ongoing essay.

When you judge between men, you judge with justice. Verily, how excellent is the teaching which He (Allāh) gives you! Truly, Allāh is Ever All-Hearer, All-Seer. O you who believe! Obey Allāh and obey the Messenger (Muhammad SAW), and those of you (Muslims) who are in authority. (And) if you differ in anything amongst yourselves, refer it to Allāh and His Messenger (SAW), if you believe in Allāh and in the Last Day. (An-Nisa 4:58-59)

“If Justice has been abolished what is empire but a fancy name for larceny” [grande latrocinium] - Augustine

The Anglo-American Empire's push through president Richard Nixon to abolish the dollar’s redeemability for gold in 1971 created an international paper money (fiat) system dominated by the dollar bill. That system, which continues unto today, granted the United States control over the global economy through a monopoly of paper money. Today the political world may be blanketed by nation states but, in actuality the international cabal of independent central banks has placed control of National currencies, and thereby large portions of National economies, in the hands of self-serving elite. The schema helps subvert the nation states unique ability to provide for the general welfare and thereby subjects it ;s citizens to the appeasement of global financial institutions that control the flow of international capital.

Today's international monetary system is completely antithetical to Islam. As the Noble Scholar Ibn Taymia (RA) put it, Islamic Economics can be reduced to two primary prohibitions: interest (riba) and excessive speculations (gharar). The contemporary economic arena is driven by interest rates and speculation on real economic activity. Such a system allows financial elite to extract taxes on all real, physical economic development and allocate resources to serve its own imperialist objectives.

The rampant inflation and inherent instability of the completely fiat international monetary order make it possible to preserve traditional colonialist inequalities but impossible to craft an economic order around the socially beneficent tenets that prohibit interest and rampant speculation. Contrary to the free market risk and reward that marks both a capitalist and Islamic economy, the international economic arena today would best be classified as a casino for finance capitalism, for it allocates risk onto the poor and extracts all rewards on behalf of global elite.

The processes that occurred from the period of 1971 unto the Financial Crisis of 2007-08 bear witness to the inherent instability of a paper-money order. We are constantly reminded of its successes but the fact remains that we live in a world of drastic inequality. The average American income is 50 times an Afghan’s and 100 times a Zimbabwean. Over a billion people on the planet remain in destitute poverty. The success of a few depends on the oppression of the masses. The financial order is like a parasite. However parasitical entities depend on an ability to feed off a host and the empire has lost much of its potential for expansion.

All economic systems depend on market expansion for maintenance. However avenues of growth have grown more difficult. Traditional mechanism of expansion: increased trade, domestic development and colonization have all been hindered. The average western consumer is indebted and can no longer pull the global economy. Increased demand from a global elite continues to cause resentment of the west and social upheaval and protest is rampant, as evident in the Arab Spring and mounting protests in Europe over ansterity. Thus contemporary dollar-based neocolonialism, enforced by its transnational institutions like the IMF and World Bank, has enveloped every region of the world, but the world is drifting toward multipolarity. The economic path taken in North Africa and the Middle East will determine the future make-up of globalization. Inserting these Muslim nations into the dollar scheme would feed the parasite for at least a generation.

Negotiations with new “Islamist” regimes in Tunisia, Egypt and Libya already document a willingness to participate in dollar-dominated globalization despite alternatives afforded by recent BRICS (Brazil, Russia, India, China, South Africa) efforts to trade and lend in non-dollar denominations an enhanced Chinese rise in the region and socialist alternatives formulating for Latin America and Iran. The vice president of the Muslim Brotherhood in Egypt recently told Thomas Friedman, “it is no longer a choice whether one can be for or against globalization.” Such sentiment was heralded by Friedman himself in his book the Lexus and the Olive Tree (1999) where he stated, “the hidden hand of the market will never work without the hidden fist, McDonald's cannot flourish  without McDonnel Dougles the builder of the F-15. And the hidden fist that keeps the world safe for Silicon Valley's technologies is called the Unites States Army, Air Force, Navy, and Marines.

Directly thereafter, Egypt signed onto a $30 billion dollar IMF loan agreeing to open up its economy to foreign corporations. The move was unopposed by the Muslim Brotherhood who will be forced to govern (at least parliamentary) while paying 15% on Egyptian debt. As long as IMF conditionalities set structures in compliance with US norms, there will be no revolution. The goal is to preserve the economic order so politicians can do nothing. As Dr. Henry Kissinger recently explained, “The more sweeping the destruction of the existing order, the more difficult establishment of domestic authority is likely to prove and the more likely the resort to force or the imposition of a universal ideology. The more fragmented a society grows, the greater the temptation to foster unity by appeals to a vision of a merged Nationalism and Islamism targeting Western values”. To foster its own maintenance of the Arab Spring, the West must prevent the destruction of an order that makes the military a US client, the Egyptian Central Bank participants change to in the dollar scheme and preserves Neoliberal advancement implemented under Mubarak. Otherwise, the Anglo-American empire may lose control, first of the area around the Mediterranean and ultimately the dictatorships that preserve the petrodollar system itself.

The oil embargo of 1973 sparked the first US recession of the past World War II era, but rather than bankrupt the financial system, it set up a new monetarist order completely different than what was agreed to at Bretton Woods. It simultaneously initiated a petrodollar standard, ended the dollars redeemability for gold and made possible the push towards globalization. It was orchestrated by conglomerate corporations, international banks and factions of government and was the brain child of high imperial minds like Henry Kissinger and Alan Greenspan. In truth, it also prepared the way for finance capital’s sequestration of the nation state.

The 1973 recession proved disastrous for most Americans but was revolutionary for international financiers. It was a coup against truly liberal factions of the US government as much as an effort to project US power through the world. In 1970 US officials from the Secretaries of State, treasury, interior and Defense all signed off on an economic forecast that claimed, “the standard price of foreign crude oil by 1980 may well decline and will in any event not experience a substantial increase,” By 1980 prices had gone up tenfold.

1974 Senate hearings in the Subcommittee on Multinational Corporations entitled “The International Petroleum Cartel, the Iranian Consortium and US National Security,” revealed that the US government was using the major international oil companies to advance the “national interest,” The oil companies, then dubbed the Seven Sisters, were dominant stakeholders in Mideast production and thereby highly influential in the OPEC Cartel. The 1973 embargo and price hikes produced massive profits for the multinational firms even as smaller domestic firms were bankrupt. However, the primary beneficiary was not the oil companies but the international bankers on Wall Street and the City of London.

 As price hikes led to billions in surplus dollars collecting in the coffers of Arab regimes, the banks sought to guarantee that these dollars were not used in sovereign development. King Faisal was assassinated and alternatives set up a Saudi pledge to return all reserves to New York for deposit in western financial firms. These deposits would allow banks the resources to finance the immense deficits projected indefinitely for countries in the West that were Net-Oil importers. Since then, the “Too Big to Fail” banks have concentrated on financing massive government deficits that extract large portions of tax revenue to pay down interest (riba).

The scheme helps position finance above allegedly sovereign governments, has expanded to direct global capital flows and prepared the way for the type of financialization that led to the crisis in 2007-08. A 2006 New York Federal Reserve Study concluded, “Petrodollar investments are finding their way back to the United States.” “In particular, the increase in net financial inflows to the United States since 2002 has roughly matched the increase in Net outflows from Oil exporters.” This relationship suggests that petrodollar purchases on non-US assets continue to generate offsetting flows to the financial markets despite current account deficits in Europe and the United States continuing to rise exorbitantly (which also benefits banks) and boosting debt. Thus the purchase of OPEC oil in dollar denominated terms is the lubricant of both financial and industrial globalization, which in turn transfers all real powers of planning from governments and onto the halls of Wall Street and the City of London.

The post-Bretton Woods fiat monetary system turned the international economy into a global casino of financial products like the derivatives trade that is now larger than the entire global economy many times over. With all currencies disconnected from gold and floating relative to each other, speculators can control sovereign nations. In 1971 the US was indebted and the rest of the world was solvent. Today almost every country is indebted to transnational financiers.

Contrary to popular opinion, the post-1971 order has not benefited the average American. Removing the gold standard provoked inflationary pressure that was battled by Paul Volcker's Federal Reserve with high interest rates that lasted a decade. Such policy decimated all internal American investment and paved the way for the disintegration of a previously unrivaled US manufacturing prowess while simultaneously giving birth to today's rampant income inequalities. High interest rates crushed consumption, and sent factories overseas to the Asian economies where labor could be exploited. The growth of multinational firms was exorbitant but the end of the gold reserve system coincided as well with the disintegration of an American middle class that marked a standard developing or reconstructing sovereign nations aspired to in the immediate decades after World War II. It is also nostalgia for such an economy that empowers America’s propaganda unto today.

As high interest rates fought inflation and helped prevent dollar collapse, high-paying manufacturing jobs were replaced by low-quality government and service sector positions. Postgraduate engineering degrees decreased and by the 1990's business (MBA) and economic graduates outnumbered engineers 3 to 1. Federal government policy catered to the rich and aided an international elite in exploiting the global population. The US government cut corporate taxes  which placed a heavier portion of the tax burden on individual income. Capital gains taxes were slashed and rising debt allocated a higher percentage of government revenue to interest on the deficit.

In the 1980's salaries for those earning $20-50,000 increased by 44% while those earning $200,000 to a million went up 697%. Heightened financialization and global commerce allowed multinationals and global financial institutions to play one country off another as free trade agreements like NAFTA exploited labor and wrecked worker rights in the developed world. These conditions birthed globalization which pulled millions out of poverty in countries like India and China but redefined the nation’s previously empowered middle class. The outcome could have been entirely different.

This parasitical system could not have expanded without petrodollar backing. One of the unforeseen consequences of the '73 oil embargo , subsequent near systemic collapse of 1975, the assassination of King Faisal and Saudi support (see Part 2) was the Iranian Revolution of 1978 and the fall of the Shah, up unto that point a loyal western-imposed dictator.

In 1975, with rising oil costs and inflation wreaking havoc on western economies, the Saudis agreed to drastic production increases to bring prices under control. The Shah in Iran resisted and posited that lower prices would prevent him from funding his government budget. He was correct, as the lower price of oil spurred conditions that sparked the revolution. The puppet shah of Iran was overthrown and an independent Khomeini regime came to power. Once again, the dollar system faced collapse. In January of 1980 fear that the petrodollar sheme would be ended or that an oil-rich hegemon would ascend in the Muslim world drew the value of the dollar against gold to a level of $1050/ounce. OPEC Nations managed to preserve the petrodollar but the scenario documented the fragility of the petrodollar scheme.

The Federal Reserve fought inflationary pressures with high interest rates through the 1980's and into the 90's. The decade long Iran-Iraq war helped prevent the advancement of a Mideastern hegemon that could rival the now essential western alliance with the House of Saud. The global economy transformed during the period; the developing world’s pronounced independence from colonial powers proved cosmetic. The economic relationships of colonization were maintained through World Bank and IMF structural reforms that aided and abetted the rise of the multinational corporations and the further financialization of international capital markets.

The “new American economy of the 1990's” was based on advances in technology, the rise of the internet and the deregulation of finance. Low interest rates at the Federal Reserve boosted consumption and pushed capital into the stock market but the gains of real wealth rested in the hands of the few. Average wages throughout the 1990's had not risen above 1973 levels. Instead, much of American GDP growth was due to the low cost of borrowing and borne with the burden of debt. Consumers were funding growth by borrowing against their houses and with credit cards assuming that prices always rose and that low interest rates were permanent. Everyone was shopping. Alan Greenspan (the Maestro) was a National hero, but 1990's growth was attained only through enormous (but undiscussed) increases in private debt. In 2000-01 the Dot Com bubble exploded, stocks retreated and the economy slid into recession.  President Bush came to office, he was forced to initiate the first round of what has been a series of stimulus package  policies to prevent economic contraction; the consequences of these interventions have pushed the American deficit to enormous levels.

The attacks on September 11, 2001, largely a reaction to US-led globalization, induced another recession and sent the US Military off to expensive global wars continuing unto today. Chairman Greenspan convinced a startled American public that maintenance of low interest rates wouldn't lead to inflation and Americans were told to shop to show support for the wars. Bush cut taxes on the wealthiest Americans; ran massive budget deficits due to military expenditure and increased spending inducing public debt to spiral as well. In 2007, the last year of a failed Bush Presidency, the US was still embroiled in two costly overseas wars and was several trillion dollars in federal debt. Then the unthinkable happened.

Global instability and the depreciating dollar caused gas prices to rise. The increased price of gasoline functioned like a hidden tax on consumers, home payments went by unpaid, a mortgage crisis erupted, the exotic financial products tied to the subprime crisis went sour, exposure to banks across the world was high, the US economy fell into recession, major banks failed, the Bush administration allowed Lehman Brothers to go bankrupt and the monetary house of cards unwound around the world. Policy since has sought to reflate the financial system. Over the past few years the Federal Reserve issued more than $15 trillion in guaranteed loans and asset relief programs, bailouts and stimulus have exasperated debt, interest rates remain at near zero percent for the Federal Reserves primary lenders and short term collapse was prevented by creating a stew of long term liabilities. One of those unforeseen liabilities was the Arab Spring.

On November 5, 2010 Ben Bernake announced plans for a second round of quantitative easing (QE2), one of the monetary mechanisms used  to rejuvenate the American economy. It is a fraudulent process where the central bank purchases massive amounts of long-term bonds from its own country's treasury and seeks thereby to drive down borrowing costs while generating stimulus through the issuance of dollar bills.

The effects of QE2 caused global concern for inflation. Stock markets, oil, gold and staple commodity prices rose immediately. The central banks of Egypt and Tunisia met in emergency as the policy depreciated the dollar’s value against their currencies and they prepared for the consequences of increased speculative inflows. The long-term policy of zero percent interest rates alongside public and private debt and slow domestic growth had already spurred a 14% increase in Egypt's dollar reserves in 2010. In fact, the policy was not intended to stimulate the domestic American economy but rather to provide liquidity (dollars) for investment to the developing world. It is an example of the enormous privilege granted by the dollar’s reserve currency role in that the US is able to export its inflation to the rest of the globe.

In reality QE2 gave insolvent financial institutions free money and the consequential flows to developing Nations put upward pressure on interest rates and prices around the world. The effect was deliberate. The halls of high finance recognize that any return to growth in the global economy will occur in developing economies; and monetarist policies grant banks a privilege known as the carry trade (borrow at almost 0% in the US and invest at high rates overseas). Multinational corporations can also exploit the policy and use borrowed money to purchase real assets in economies that were opened up during globalization's prosperous years, but rising prices of stable food products as a result of the QE2 policy sparked protests and temporarily hindered efforts to return to the imperialist norm.

 The Arab Spring was at least partially, a byproduct of the burst of inflation induced by QE2. On December 17, 2010 Mohammed Bouazizi lit himself on fire in Tunisia; Algerian youth took to the streets in January over sugar price increases and months later Egyptians emulated Tunisians. The rest is history but few connect the cause of revolt to the policies of the Federal Reserve.

The Fed, for its part, expressed little remorse for inflation that wreaks havoc on the more than a billion people living on less than $1.25 per day. During the initial stages of the Arab Spring, the Fed Chairman of the St. Louis branch was asked on a CNBC talk show, “the question is at what cost and did it (QE2) lead to these skyrocketing commodity prices for things like grain and things like copper and part of the reason we have seen so much unrest in the Middle East? “He replied that “those countries choose to make a flexible exchange rate and that is up to them.” and mentioned that the Federal Reserves mandate forces it to be concerned only with the American Economy and its interests despite evidences that the Fed's policies impact the economies of the entire planet.

The lack of concern continues. In-spite of the Arab Spring Monetary stimulus measures persist in causing the same issues today. US expansionary monetary policy continues to appreciate currencies in developing countries; this gives an advantage to US exports by making them cheaper than domestic goods. It deepens trade balances and increases external debt in places like Latin America, Southeast Asia, Africa and the non-oil producing countries of the Middle East. The cost of the stimulus has pushed US debt above 100% GDP, and at $16 trillion, but the global economy still stands on the brink of return to recession.

The Anglo-American empire uses its dollar privilege to prevent the development of a multipolar world. The movement of the Muslim world away from that system would pave the way for real change. The IMF predicted 3% growth for the global economy in 2012, but the institution still admitted that the global economy is “still deeply into the danger zone” and emphasized that where they once loaned to developing nations, Greece, Portugal and Ireland are now on its books. Standard and Poors rating agency lowered the triple-A rating of several European nations including France to start the year and the US is mired in political loggerheads during a hostile election season. Ben Bernake announced plans to continue a zero-interest rate policy through 2014, meaning there will be plenty of dollar capital flowing overseas. A great deal of that move is intended for the relatively unexploited markets of a new Middle East. Intrusion and growth in Libya, Egypt, Tunisia, Syria and others provide an opportunity for expansion.

It is impossible to know what will happen however, the chief operating officers of PIMCO, Sami El-Arian and Bill Gross have described the present fiat system as “paranormal” and “bimodal.” Bill Gross has remarked that the recent rise in the American dollar relative to other currencies makes it “the cleanest dirty shirt.” PIMCO is the largest private holder of American bonds and El-Arian describes the “paranormality” of the dollar-based system by explaining that central banks can no longer deliver economic outcomes that affect the real economy; the results are “bimodal” because at once the international financial system faces potential deflationary and inflationary disorder. He explains “its like if I tell you your plane may leave at 5:30PM but its a bimodal distribution, it may leave at 10AM or 10PM.”

George Soros recently described that the choice between central bank bailouts and forced austerity in troubled nations was allowing “mutually enforcing” economic concerns to create potentially disturbing social and political forces, all of which could trigger systemic change. Uncertainty is not relegated to the Arab Spring but in an interconnected world of globalization, the paths taken by new “Islamist” regimes will reverberate to Europe and the US.

Still everyone is talking of reform and ignoring the inherent injustice of the dollar-based world order. The potential for systemic change exists but the void created by the Arab Spring has documented support for Islam in politics whilst ignoring that the true fruits of independence could only occur in the realm of economic sovereignty. The spiders web, as Allah informs us, is the frailest of houses and breaking the web of international control could occur with an attack on the oppressive nature of an alternative present economic relationships and the development of a just economic model founded on the tenets of Islam.

Contemporary issues such as the power of the corporation, wealth inequality, government bailouts for the financial industry and the role of currency in an economy predominate progressive thought. The Islamic shariah addresses all these issues, yet there is little development of a new progressive Islamic economics that can engage in the growing quest for a more just economic order. The Islamist regimes would do a great deal of good if they pursued these measures. A conversation about the dinar and dirham is a conversation that leads to a broader awareness of the reality that there is an economic system in Islam.

There is a great body of work that enforces the tenets of the Islamic system. Despite centuries of intellectual backwardation in the Muslim world, progressive economics has an immaculate array of compatibility with the Islamic model. In his seminal work  Economics and the Public Purpose (1974), the great liberal economist John Kenneth Galbraithe identified that the rise of large corporations was not only “the outgrowth of the Neoclassical word of monopoly and oligopoly” but that the result empowered self-serving firms with enormous influence over both the state and the smaller entrepreneurial system. Instead of one dominant economic techno-structure, Galbraithe addressed the reality that corporations operated under a planning system that subdued the interests of states and small firms.  People under such a system, existed in a contrarian competitive free market that was relegated to the corporate command control and thus were confirmed to self-exploitation. The two drastically different economics caused the increasing discrepancy in wealth distribution of Western Nations in the 1970's, but the key was that the same process was being replicated internationally. As Galbraithe described it:

“This defines the nature of imperialism in the third world. It is an extension of the relationship between the planning and the market systems in the advanced country. As with the market system in the developed country, abundant supply, slight or no control over prices, a labor supply that leads itself to exploitation all mean intrinsically adverse terms of trade. The result is the same tendency to income inequality between developed and undeveloped countries as exists within the industrial country between the planning and market systems.”

Galbraithe would have accepted the proposition that the system has expanded its search and grown entrenched and institutionalized today. The growth of transnational financial institutions like the IMF and World Bank leverage debt to create such unequal distributions, and institutions like the World Trade Organization (WTO) cement the rights of corporations to exert planned control by granting them rights over nations.  As markets  grow through trade, colonization and domestic expansion, an international network of global control forces developing nations to accept the dictates of the planning system while at the same time calling the process liberalization. As economist Michael Hudson puts it, the system, “shifts planning power into the hands of high finance on the claim that it is more efficient than public regulation. Government planning and taxation is accused of being 'the road to serfdom' as if 'free markets' controlled by bankers given leeway to act recklessly is not planned by special interests in ways that are oligarchic, not democratic.”

Anglo-American globalization is merely institutionalized finance imperialism, no different than the way a parasite controls its host but today the process of parasitic growth has grown to stagnation and may depend on exploiting American the  new markets in the Muslim World for its maintenance.

Participation in this international economy would incapacitate the political junctions of new Islamist regimes. This Anglo-America network could care less about the conservative social stances of Islamic governments , they are concerned only with economic participation and with decreasing demand, rising debt and coming austerity in western nations, an ability to exploit the Arab Spring will cause opposition to any call for the dinar and dirham and any alternative economic relations.

The Muslim World may be the final frontier for an actually imperialist globalization and it appears that the West has willing accomplaces in the New Islamist regimes. The World Economic Forum met in early 2012 to discuss the way to advance the globalization movement. However, in place of crony capitalists like Mubarek and Ben Ali were new representatives of the “ Arab revolution sharing the same economic aspirations.” Abdul Moneim Abdul Fateh, a former member of the Muslim Brotherhood then running for president of Egypt took the stage with Tunisian Islamist Rasheed Ghanouchi; the leader of Al-Nadha party. Both took time to applaud reforms and announce their country’s willingness to participate in the global system, borrow from transnational lenders, and attract foreign investment. They are part of the West's ongoing efforts to craft and nurture a “Moderate” Muslim movement willing to continue colonialism in the Middle East.  Such circumstances will probably cultivate the fulfillment of the Prophet Muhammad's claim that, “Iraq will be prevented from its dirham and its measurement; Sham will be prevented from its dinar and measurement; Egypt will be prevented from its dinar and its measurement. You will have returned from whence you began. “It is the monetary system the West seeks to preserve in the wake of the Arab Spring. A re-issuance of the Islamic dinar and dirham would prohibit the dollar’s dominance and pave the way for an economic order based on horizontal profit sharing, absence of interest and prevention of rampant speculation. While this call is not pragmatic at this juncture, one can be assured that economists and others across the world are preparing for the potential collapse of the dollar-based fiat system. In another hadith after mentioning Roman preventing of the dinar and dirham the Prophet said, “In the last of my Nation there will be a Caliph who will throw handfuls of money without keeping account.” It is impossible to throw handfuls of paper currency and so the Prophet (saws) made distinction between the two economic systems as well here. A crucial distinction exists in the distinction between commodity and fiat (paper) currencies. Today's global inequalities are largely a consequence of the international monetary order and the imperialist processes it perpetuates.

The objective of the US Federal Reserve’s sustained zero interest  rate policy through 2014 is to provide interest free loans, but not to individuals and small companies in America suffering from a staggering domestic economy. Instead, the free money is issued to international financial institutions that will use that money to seek control over emerging markets. The new economies of the Arab Spring offer the best means of reflating the parasitical nature of globalization.

The Islamic Shariah offers a comprehensive and progressive alternative based on tenets that even strict secularists are beginning to advocate. The Islamic system promotes interest and speculation free quity sharing and horizontal relationships that preserves the value of the free market but prevents the abuses of oligopoly and monopoly perpetrated by central banks, financial institutions and multinational corporations today. The shariah offers a vast amount of economic material that has been largely unexplored in the industrial age. Its core principle outlined in the Quran is to prevent severe inequality. Allah describes the system’s objective:

...in order that it may not become a fortune used by the rich among you. And whatsoever the Messenger (Muhammad SAW) gives you, take it, and whatsoever he forbids you, abstain (from it)... (Al-Hashr 59:7)

An economy based on the Islamic tenets must be built in an environment that is inflation free. Issuance of the dinar and dirham makes that possible. In part 4 we will inshaAllah discuss the distinction in Islam between fiat currencies, the gold dinar and the silver dirham.

Wa Allah Alam !