An Interview with Walid Hejazi
Islamic Finance refers to banking and monetary practices adhering to Islamic or Sharia law. As such, it bans interest payments, certain market speculations, and investment in products not believed to be ‘halal‘ – such as gambling, pornography, alcohol, and pork.
It is practiced by the bulk of the Muslim world, worth well over $1 trillion dollars in assets, was largely untouched by the Financial Crisis of 2008, yet remains conspicuously absent from many major Canadian banking institutions. The market is however, in flux; it’s changing. Adapting to the new globalised world thanks to the efforts of many, amongst whom is Walid Hejazi, an Associate Professor at University of Toronto’s Rotman School of Management, and the first person to bring Islamic Finance into the Canadian university curriculum in any official manner.
I sat down with the Associate Professor to get a better idea of his motivations in spearheading a campaign to develop Islamic Finance in Canada through his classes at Rotman. Born in Windsor, Ontario to Lebanese parents, Hejazi has been working to develop the inclusiveness of Canadian society by introducing students to Islamic Finance and financial markets in the Middle East.
Crediting his parents emphasis on studying hard, his own love for learning and studying, and the academic freedom of being a professor as the reasons he got into the field, Hejazi has been teaching at the University of Toronto for over 20 years, and credits himself to be one of the happiest people there.
“If you love your job, you never work a day in your life,” starts Hejazi, “….and I completely love my job.”
Prior to his Islamic Finance course, there were no courses with any significant focus on Islamic Finance or business in the Middle East. The focus was almost entirely on traditional brick markets. Noticing the gap, Hejazi took the initiative to start an Islamic Finance course. Starting with 20 students in it’s first year, the programme (now in it’s fourth year) is comprised of 40 students (with a 20 student wait list) – the majority of whom are not Muslims “which to me is important,” says Hejazi, “…it shouldn’t be just about getting Muslims to learn more about the Muslim world.”
The course is not about religion, it’s about business and ethical finance, pillared by Islamic tenets. Discussions about business opportunities in the Middle East provide a platform that allows Muslims to engage others and create dialogues on the Muslim world, allowing them to see opportunities for growth in the Muslim world. And while some students discuss ideas regarding the Middle East’s markets, others are able to witness them first-hand through Hejazi’s Middle East study tours.
In a project benchmarking the Muslim world against the rest of the world, Hejazi and his students discovered that though 20% of the world’s population are Muslim, only 10% of the world’s GDP is in Muslim countries, implying that the average Muslim only earns half the average income when compared to the rest of the world.
Though the Islamic Finance course has been making quick progress and has only received praise since its inception, it was not without its initial challenges. Though there were many that felt that a course so closely tied with a religion should be kept separate from the school, Hejazi credits the Dean of the Business School for having exactly the right kind of mindset; to being open to a new idea and trusting Hejazi to run with it. Of course, this begs the question:
What exactly is the status of Islamic Finance in Canada?
Hejazi states that, “one of the challenges for the growth of Islamic Finance is something called regulatory clarity. What do I mean by that? ‘Is the government behind it or not?’” Minister John Baird has stated that Islamic Finance is welcome in Canada. And it is certainly present.
Aside from Hejazi’s educational component, there are many Sharia-compliant financial solutions being offered across Canada. However, the truth remains that Canada lags behind several other countries (such as, the US, the UK, France and Australia) in terms of the depth of Islamic Finance available; as mentioned at the beginning of this article, Sharia-compliant solutions are not available at many major Canadian banking institutions.
Detractors of Islamic Finance will point to the issues at UM Financial, a de facto test case for Islamic Finance in Canada. The insolvency of the Islamic mortgage lender has been cited as an example of the inability of Islamic Finance to operate in Canada. Hejazi however states the lesson from UM Financial is not to push Islamic Finance away but rather to bring it into the mainstream in order to ensure that mortgages are well managed and regulated, and secondly to bring Muslims out of the periphery and into the mainstream.
Speaking in regard to the importance of Sharia-compliant solutions to Muslims on a spiritual level, Hejazi says “If they have a mortgage that’s sharia-compliant, they feel pure” however, if the company offering the mortgage collapses, and the consumer is forced to get a conventional interest-based mortgage “….then all of a sudden, their home is no longer blessed in their mind.”
Outside of his work on Islamic Finance, Hejazi is deeply involved in researching foreign investment in Canada as well as Canadian investments abroad, having testified five times before the Parliamentary Committee in Ottawa on this topic. His belief that foreign investment and international trade is a way to enhance prosperity and reduce poverty has taken him from the Middle East to the Cayman Islands in order to examine policies that may prevent economies from becoming more lucrative.
Another interesting research project of Hejazi’s is exploring the obstacles that women face in their careers. As women move through their careers, they may face challenges and experiences that men may not, such as pregnancy and child-rearing. He is hoping to develop a better understanding of different issues by also examining and conducting research on minority communities — as it would be interesting to see whether or not the obstacles they face, real or perceived, are similar to those of the mainstream.
It was an interesting 45 minutes, and there’s certainly a lot to take away from my conversation with Hejazi, but let’s leave it at this – Islamic Finance, though present, has a long way to go before it may be established in Canada. It’s through the efforts of pioneers in the educational fields like Walid Hejazi, and his equivalents in the financial, regulatory, and media spheres of society, will we see the development needed to have Sharia-compliant solutions as a viable mainstream option.