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Arabic Asset Management

081125_low   People living in Arab countries reportedly do not use interest-earning bank accounts. How do they manage their asset without fixed deposits?

  Serving as an alternative, there is something called the Islamic Banking in the region, which is a system that serves as a go-between for personal investments. The bank and individual investor agree to invest in some project and receive an “advantage” which is not identified as “interest”. The advantage usually ranges from 5% to 10%. However, they sometimes may not receive any advantages. Even though they will not receive any advantages for some years, they can maintain a relationship of mutual trust. This is the style of Arabic business.

  Another way of asset management is the possession of gold. Thanks to the increase in the price of gold, acknowledgement of “gold as fortune” is now widely prevalent. Some say  “possession of gold is the best way of asset management because it makes men happy by getting lots of money, and at the same time makes women happy by receiving gold”.

  In Amman, there exists a long street of gold shops (suku) which get very crowded during the weekends. The designs of gold items seem to be different from Japanese tastes, which are mostly big ornaments or heavy chains.

November 27, 2008 in Iraq |