TT Epaper
The Telegraph
Graphiti
 
CIMA Gallary

ANOTHER BOND

David Cameron’s announcement of his government’s intention to issue Islamic bonds has made news across the world. His countrymen took some time to listen to the message of Jesus Christ; but they have been Christian more or less since the 4th century. Angles, Saxons and Jutes tried to convert them back to pagan ways in the next century; but Pope Gregory took action and sent Saint Augustine at the end of the 6th century to save British souls. They were obedient for a millennium. But then, the passion of King Henry VIII for Anne Boleyn prevailed over his faith; rather than stay with his wife of 24 years, he chose to break with the father in Rome, and married the second of his six wives. His objection to the Roman church was personal; his daughter, Mary, saw it as a royal foible and stayed loyal to the original church. But her sister finally divorced the Catholic church and made herself religious head. From Elizabeth I to Elizabeth II, every British monarch has been the spiritual head of his or her country.

The prime minister to Elizabeth II now prepares to borrow money on terms indicated by the religion of Mohammad. The British have been good at worshipping in the temple of Mammon; those whose faith in him is strong enough would probably place him higher than the rest in the hierarchy of gods. His countrymen may worry about their fate in the next world; but they have chosen David Cameron to run their government, and he must worry about their fate in this world. They will always have a prime minister to look after their worldly affairs, but he has to worry about himself and his party too; after all, the British general elections are only two years away, and he is even younger than the governor of the Reserve Bank of India. He no doubt aspires to lead his country longer; and in these hard times, he can survive only if it prospers.

The more serious problem is that a sukuk bond gives its owner a right to a share of the borrower’s profits, and governments are conventionally not seen as profit-makers. Mr Cameron proposes to get around this problem by giving sukuk bondholders a share of the rents of some government-owned properties. If the British government were a heartless rentier, that would sound like a good bargain. But otherwise it does not sound very promising. Still, Mr Cameron has some good Muslim friends. He announced his bonds in the company of the prime minister of Malaysia; and then, some rich Arab sheikhs are also known to feel at home in England. It would be fascinating to watch the unveiling of Mr Cameron’s calculations.