Candice Vermeulen MWF 10:00am

How to Do Business in Islamic Countries

According to Hayes and Vogel, business people, particularly Westerners who work in the Persian Gulf and other Islamic regions such as Asia and North Africa, need to:

Understand and appreciate the extent to which religion and Islamic law are intertwined and permeate all levels of society, including commerce, to greater and lesser degrees depending on the country. "This law is seen as deriving from direct, divine command. o Executives who understand the basic tenets of the Islamic religion as it relates to commerce will have an easier time abroad, they said. According to Hayes, the following principles of comportment are expected among businesspeople:

Contracts should be fair to all parties. Partnership is preferred over hierarchical claims. Speculation is prohibited. "They don't like gambling," said Hayes. For instance, if you invested in an Islamic mutual fund, among those industries which would be barred from representation as funds would be the gambling industry. But gambling also relates to futures; it relates to currency hedging; so it's a major situation that you have to be aware of.

Interest is prohibited. This is the probably the thing that is most often identified with Islamic finance. Back in the time of the prophet Mohammed, some of the most rapacious individuals were the moneylenders; and so as a response to the things that these moneylenders did which were so reprehensible, part of the religious belief is that you do not charge interest or accept interest. Now, of course, that isn't always practiced, but it is the theory.

Compassion is required when a business is in trouble. In any country that has Islamic influences in its legal structure, if somebody is in bankruptcy or if somebody is experiencing financial reversals, you can't put pressure on them, because that is not an appropriate thing to do when somebody is down. You don't kick them when they're down.

They don't like gambling. ... But gambling also relates to futures; it relates to currency hedging; so it's a major situation you have to be aware of. Samuel L. Hayes III

Like religious people everywhere, Vogel said, not all Muslims follow the faith in every respect. Some do deal in futures, for instance. "What Frank and I found after working with religious mullahs for most of the 1990sand Frank a lot longer than thatis that it's a process of education," Hayes told the group. "When they get to understand what's involved in an international transaction, they are more willing to interpret an option, for instance, as not being speculative.