Could religious principles help minimise the effects of the world financial crises?
Sitting in front of a borrowed computer in the media centre at the recent World Economic Forum on East Asia 2013 in Myanmar’s capital city of Nay Pyi Taw, Phra Maha Nopadol Saisuta draws plenty of attention, much of it confused.
Clad in the saffron robes synonymous with the Buddhist clergy, the monk doesn’t quite blend in with the dozens of journalists covering the Forum. Yet, just like those journalists, he’s there to find out what is happening around the globe. That knowledge, he confides, can only benefit his work as the deputy dean of Thailand’s Faculty of Buddhism at Mahachulalongkornrajavidyalaya University.
A regular religious representative of Thailand at overseas events, Phra Maha Nopadol carefully studies which of the forum’s sessions will be of most use to him and is among the journalists chasing for photos of Aung San Suu Kyi as she leaves a meeting room.
“It’s a misperception that monks should not be associated with the external world outside the temple and that religion is quite apart from other things in the world. Because of that misperception, people disassociate the economy from religion. That’s at the root of the financial crisis,” says Phra Maha Nopadol who was only Buddhist monk present at the gathering of global political and business leaders.
During the forum, he attended a private workshop on how to apply religious teachings to creating peaceful workplaces, pointing out to participants that Thailand has some two million Myanmar workers and that in his view they should feel grateful to their bosses and receive ethical treatment in return.
Monks, he explains, can serve as the media in disseminating messages. With Buddhism now practised all over the world and monks commanding public respect, it’s relatively easy to convey the importance of being a good citizen at the community, country and world level.
The monk’s thoughts are also resonating in the West, where the culture of greed that caused the 2008 financial crisis in the US continues unabated.
At Deutsche Welle Global Media Forum 2013 in Bonn, Germany, a workshop looked at how religion can be used to control greed and ensure better living conditions for global citizens. The speakers represented both the Christian and Muslim world.
“The crisis we face today serves as an important wake-up call for us to examine the financial system and ponder what the financial and economic system is for,” says Athena Peralta, consultant to the poverty, wealth and ecology project of the Manila-based World Council of Churches.
In 2008, financial institutions in the US reported huge losses from both the overvaluation of bundled sub-prime
mortgages and questionable trading practices, leading to what is referred to as the Hamburger crisis. As the fall out spread, several countries in Europe reacted by launching stimulus packages, which had the effect of pushing their national debts to peak levels. These ever-increasing debts, combined with an oversized banking sector, in turn pushed some of the countries in the Eurozone to the brink of financial collapse. Five years later, Greece, Spain, Portugal, Cyprus, Ireland and Italy are still facing severe problems.
Peralta believes that religion can play an important role in finding and addressing the root of the crisis in a world where all human beings should act for the common good. All religions, Buddhism among them, highlight the human responsibility to the impoverished, she point out.
Ranjeet Guptara, a research associate at University of Cambridge, views economics and religion as comparable. Religious people look up to God, he says, while those in the financial world worship the dollar and euro as their God.
He believes that if those who play in the financial marketplace were to pay attention to the Bible, the world would be a more liveable place. The Bible, he points out, contains some valuable economic justice.
For example, the Good Book states that the planet is God’s, meaning that man is just the caretaker. The Bible tells us not to steal, which is equivalent to the notion that all must respect the property rights. Followers of Christ are also told to look after the poor.
Omar Salah from Tilburg University in the Netherlands, says the principles of Islamic financing, with its strict regulations, may be an answer to controlling greed. These include the freedom to produce and create wealth, while abiding by moral rules and norms of behaviour. Islamic financial institutions are required to create real economic value. As such, they are required to trade only in tangible assets. Profits for Islamic banks are through dividends, requiring the banks to forge equity financing rather than directly lend money for interest income.
“Islamic finance is not the solution but it is good in the sense that it deals directly with tangible assets. It can mitigate the crisis. Lending money is a charitable act. If you lend money, it means you help your fellow men,” he says.
“The recent financial crisis has arisen from trade on claims. Banks made mortgage loans just to grow their portfolios and to benefit from the securitisation of the mortgage loans.
While Peralta is pleased at the burgeoning CSR programmes and green consciousness in the world, she points out global ethics are also vital. For better control of financial institutions, common values should be emphasised to achieve mutual benefits and sustainability as well as penalise the greedy. Churches themselves must protect their own integrity, by adopting a moral way of controlling their investment.
There must be a solution to address a larger system, she insists. All countries are now improving access to funding for women in rural areas. That helps to some extent. But these women who borrow to fund their organic farms may see their outputs beaten by cheaper products from other countries, as a result of a free trade agreement. The benefits of the funding will thus be nil, she adds, adding that she supports an integrated system to ensure sustainable growth. For example, taxes on capital flows, which cause volatility in many countries.
“Efforts must be integrated in a coherent way. We must confront greed in a sustainable way,” she says.
Phra Maha Nopadol agrees. “Businesses will thrive if they produce quality products. If consumers are happy and they reap reasonable profits, their businesses will gain recognition and win friends. Exchange programmes can be established with partners and together, they prosper in a happy way,” says the monk.