Choctaw Indians

The tribe of Choctaw Indians was originally located in the southeastern part of the Mississippi, southwestern Alabama, Louisiana and Georgia. This name for this tribe of Indians is attributed to various sources, some of these are the Spanish word chato which means flat because the Choctaw used to flatten the foreheads of their male infants and Haccha, a name of the Pearl River with which these people were associated . These people believe that they originated from â€Å"Ninah Waya†, which is a sacred hill located near Nozapter, Mississippi.The name â€Å"Ninah Waya† means â€Å"Productive Mountain† and is often referred to as â€Å"The Mother Mound†. The â€Å"emergence myth† is a part of Choctaw history. These Indians are supposed to have belonged to the Muskhogean linguistic family. Initially they existed as very large groups, but were significantly reduced in numbers due to infected foreigners who spread a number of epidemic diseases amongst thes e hapless Indians. The other tribes in this linguistic family are Creeks, Chickasaws, Seminoles and Apalachi .In comparison to the Chickasaw and the Creek who were their age old enemies, the Choctaws were more democratic and less warlike. The Choctaws lived in wattle-and-daub homes. These homes had walls consisting of pole frames covered with mud and bark and a thatched roof. They were agrarian in general and in this aspect were unsurpassed in the entire Southeastern part of the U. S, and used simple tools to cultivate corn, beans, sweet potatoes, and tobacco.They were so proficient in this activity that they were in the enviable position of possessing surplus food which they bartered in order to obtain goods that they did not have. Moreover, they utilized blowguns, bows and arrows, spears and traps to hunt animals for food and pelts. Their trading capacity was so great that they traded on a very large scale with other tribes and in order to communicate with their customers they dev eloped a simple trade language. In order to transport merchandise and animals hunted by them they used dugout canoes.The Choctaws were fond of sport and it occupied an important part of their culture. Their variety of lacrosse, which was very popular amongst the eastern tribes was a very rough game played with a stick. This game was used to promote social gatherings, bring about settlement of disputes and to train the participants for warfare. The number of participants in this game would be in the hundreds and all sorts of violence like biting, belabouring and kicking were permitted. Not surprisingly, the participants would suffer serious and sometimes fatal injuries.The outcome of this game had so much importance attached to it that Choctaw priests used to offer prayers in order to have an effect on the result of the game . The Choctaws took to riding horses and using them as pack animals with the advent of the Europeans in the 16th century. They developed their own specialized ho rse breeds and raised cattle. The 18th and 19th centuries were witness to the forced migration of the Choctaws farther and farther west in order to circumvent clashes with the European settlers.Initially they allied with the French later on they worked as spies for the Americans in the American Revolution, which lasted from 1775 to 1783, and reported the activities of the British. In the War of 1812 they allied with the U. S and fought under General Andrew Jackson and they also fought against the Creek in the Creek War that lasted from 1813 to 1814. The universal belief was that the land occupied by the Indians had gold in it, accordingly President Jackson brought about legislation that required relocation of the Southeast Indian tribes to lands west of the Mississippi River.The first victims of this inhuman deed were the loyal Choctaws, who were made to shift their location to the Indian Territory, which is in Oklahoma under the Indian Removal Act of 1830. Accordingly, as per the p rovisions of the 1830, Treaty of Dancing Rabbit Creek the Choctaw nations was forcibly relocated to South-eastern Oklahoma. The years from 1831 to 1834 saw these hapless Choctaws being subjected to a series of forced marches westward, which proved fatal for many of their numbers who succumbed to disease, hunger, exposure and attacks by bandits.Around twenty thousand Choctaws were shifted and only seven thousand survived this arduous journey notorious as the â€Å"The Trail of Tears†. The greed of the settlers was gratified to some extent by the year 1842 as most of the Choctaw lands had become the property of the settlers. Oklahoma, was chosen by the Choctaws as their promised land, because it was for the most part empty and was considered to be useless for any other purpose. However, this place proved to be very fertile and was utilized by them as an agricultural haven. The surviving Choctaws built a new city based on their agricultural genius.In the Indian Territory the Cho ctaw, the Creek, Cherokee, Chickasaw, and Seminole were collectively known as the Five Civilized Tribes, because they had organized governments with written constitutions and due to the fact that they had established public schools and newspapers. The Choctaw joined forces with the Confederacy during the American Civil War, which lasted from 1861 to 1865. Due to the ever increasing influx of non-Indian settlers, the Choctaws were unable to retain their lands, even in Oklahoma, where they had been ruthlessly relocated.Ironically, Oklahoma is a term invented by the Choctaw leader Allen Wright to connote red people and was initially used to denote the western half of the Indian Territory. The number of persons who identified themselves as Choctaw in the U. S. census of 2000 was approximately 87,000 and a further 71,000 identified themselves as having Choctaw blood. Federal trust lands are held by the Choctaw Nation of Oklahoma in the vicinity of Durant. Furthermore, the Mississippi Ban d of Choctaw Indians’ reservation is located near the Pearl River.Some Choctaw groups reside in Louisiana and what should be of encouragement to these hapless people, there has been a revival of traditional customs and unity between these groups since the 1950s . Women have traditionally been objects of veneration in the Choctaw culture. This honour has been accorded to them due their being the head of every family household and due to their being the caretakers of children and elders in the family. In legends these tribes are considered to be vegetarians and one of the Cherokee legends describes this epoch as the beginning of equality and mutual helpfulness between humans, plants and animals.Initially all three lived in harmony, however, with the passage of time, man became destructive and started to kill and eat some of the animals and in retaliation some of the animals invented diseases to limit the human population. True generosity was exhibited by only the plants, which provided not only food to man, but also medicine to cure these diseases . The historical evolution of the Choctaw makes one aware of their efforts in respect of economic development and the strong Tribal government which has resulted from such development.In the past, the Choctaw people had undergone several hardships like health problems and reliance upon the federal government for the bare necessities of life. However, subsequent to the year 1945, the situation has improved drastically and the strong tribal governmental leadership and appropriate planning have made the Choctaw people self reliant. With the improvement in employment and educational opportunities, availability of better housing and healthcare facilities a resurgence of the Choctaw community and their cultural arts has transpired and this has brought about betterment in their standard of living.The language of the Choctaws and their native culture are no longer threatened with extinction as they had been saved and st rengthened due to their efforts. At present Choctaw community can be considered to be a successful community. This is due to the fact that they not only preserved their culture but did so in the face of great adversity. The Choctaw Indian Reservation is spread across 35,000 acres of Tribal lands, which are located in ten counties of the Mississippi. The federal government is responsible for safeguarding these lands.These sites are Pearl River, Red Water, Bogue Chitto, Standing Pine, Tucker, Conehatta and Bogue Homa. The Tribal government is headquartered in Pearl River and is the largest of these lands. The Choctaws enjoy several traditional cultural activities in addition to those provided by modern society. Their artistic output comprises of hand woven baskets made from Mississippi swamp cane, beadwork, etc. They are also famous for their dances, cooking and sewing traditional apparel. In the modern world they are active in almost all fields of scientific and commercial endeavour. In contrast to the past, when they had been relegated to the background, these people can be assumed to have become a part of the fast paced and exciting American way of life. These people are highly creative and gifted and some of their special events, which enable them to congregate as a Choctaw community in order to commemorate their tribal traditions, are the annual Choctaw Indian Fair held in the month of July in the Choctaw Indian Reservation and the spring festivals of the Choctaw communities . Works Cited Page Ferguson, Bob.Choctaw Chronology. Retrieved from http://www. choctaw. org/history/chronology. htm on October 6, 2006 Rita Laws, WAS THE AMERICAN ABORIGINAL DIET VEGETARIAN? , retrieved from www. animalvoices. org/aboriginal. htm. on 06. 10. 2006. Retrieved from http://www. choctaw. org/culture/welcome. htm on 06. 10. 2006. Team Sports. Choctaw. Retrieved from http://www. cradleboard. org/cnat/resource/choctaw. htm on October 8, 2006 Waldman, Carl. â€Å"Choctaw. † Microsoft ® Encarta ® 2006 [DVD]. Redmond, WA: Microsoft Corporation, 2005.

Essay on Celebration of an Eid

People belonging to different castes creeds and countries celebrate different festivals. These festivals have both religious and psychological importance. On these occasions, people perform certain rites and thank God for the blessing that He bestows upon them. They gathers together at some place and offer prayers according to the teachings and dogmas of their religion. The rich give alms to the poor. Relatives, friends and neighbours pay specials visits to one another. They enjoy and rejoice in the same way and in the same manner. Thus such festivals bring all the members of society on one platform and remove all social indisciminations.Such festivals have also a psychological significance. We need some moments of rest after the day’s hectic activities. When routine work begins creating a sense of monotony and boredom in us, we desire to have some change in our life. This is necessary to purify us. So usually fairs are held on this occasion. People play different games. Picni c sports are thronged with people. Children celebrate the occasion with bangs and booms. Sometimes older people also join them. They dance and sing with the children. Dainty and delicious dishes are prepared at home. Sweets and cakes specially prepared for the occasion are sent to the near and dear ones.Houses are also decorated. So such festivals serve as an ‘overhaul’ of our mind, body and soul and bring about positive and constructive changes in our personality. Eid-ul-fitr is also such an occasion that is celebrated every year with full religious fervor. The Eid comes every year with the message of hope, love, equality and universal brotherhood. As it comes after the month of fasting, it has especial significance. It symbolizes man’s moral triumph over his animal instincts. The day begins with early rising, a bath, and wearing a new or at least the cleanest possible clothes and spraying perfume on oneself.It follows a donation of ‘fitrana’ to the deserving. Then every Muslim proceeds for prayers. There is considerable hustle and bustle in the prayer ground. To the gay colours of the children’s dresses are now added balloons and toys. â€Å"Khutba† follows the prayer. In this address the speaker throws light on the importance of fasting and the blessings of God that it brings. Rest of the day is spent in meeting friends and relatives and exchanging gifts with them. A part from the religious purpose, the occasion of Eid provides economic activity. There is a great shopping spree for ten days.Both the rich and the poor make purchases for the members of their families and especially for their children who also receive ‘Eidi’ form their elders on the Eid day. The shopkeepers reap a rich harvest of profits. With the approach of Ramazan and Eid prices shoot up. This trend must be checked. We must keep it in mind the spirit of such festivals. They are not meant for personal aggrandizement or personal gain s. The main purpose gains. The main purpose of these festivals is to bring hope and happiness in the life or those from whom fate has turned its face.

Classical Social Theory Essay Example | Topics and Well Written Essays - 2250 words

Classical Social Theory - Essay Example In Condorcet's historical account of the heroic march of human reason, it is invariably priestly deception and barbarity which threatens future progress or plunges mankind into lengthy periods of darkness and ignorance. Speaking for many of his philosophe peers, Condorcet depicts the Middle Ages as history's bleakest epoch: "Nothing could penetrate the profound darkness save a few shafts of talent, a few rays of kindness and magnanimity. Man's only achievements were theological day-dreaming and superstitious imposture, his only morality religious intolerance." The French enlightenment's special virulence toward the contemporary institutions of organized religion can be attributed to the uniquely powerful position of the French clergy as members of the ruling elite. The resolution of the Gallican controversy in 1682 cemented an especially close relationship between the clergy and the crown in France. Moreover, French religious dissenters and freethinkers confronted an especially hostile and oppressive environment in the aftermath of the Revocation of the Edict of Nantes, guaranteeing minimal toleration to Protestants, in 1685. This atmosphere of intolerance and rigid absolutism bred a particularly bitter anticlericalism; the perceived power machinations and profligacy of the clergy encouraged scathing denunciations of priestly hypocrisy and cynical manipulation. In relatively more tolerant Protestant England, such intense animosity was unlikely to arise. Nonetheless, the basic principles of enlightenment thought produced skeptical and crit ical accounts of revealed religion across national boundaries, and English deists were especially active in promulgating the foundation for a more rational, simplified, and less doctrinaire faith. Voltaire, Letters in England , trans. Leonard Tancock (New York: Penguin Books, 1980), 120. In his final letter from England, Voltaire systematically attempts to dismantle the claims of Blaise Pascal in the Pensees. Profoundly disturbed by the "hateful light" in which Pascal appears to depict man, Voltaire proposes to "champion humanity against this sublime misanthropist." Voltaire's crusade against Pascal's misanthropy neatly illustrates many of the central objections which enlightenment thinkers made against religion, and Christianity in particular. Voltaire, Letters in England , trans. Leonard Tancock (New York: Penguin Books, 1980), 120-122. Voltaire, a relative moderate on religious questions, does not actually seek to dismantle belief in God.' Rather, he takes exception to the misery, wickedness, and helplessness which Pascal, attributes to mankind's natural condition, as well as the social disarray which is held to follow from man's corruption. Claiming that Pascal "attributes to the essence of our nature what applies only to certain men," Voltaire does not accept that original sin is a permanent and irrevocable stain on all of humanity.' Rather, he insists that man has both good and bad impulses, and that we can use our reason to govern our passions so as to lead upright lives: "He [man] is, like everything else

Chiropractor Research Paper Example | Topics and Well Written Essays - 750 words

Chiropractor - Research Paper Example (Cited from BLS.gov) Chiropractors have a very routine job description which includes; performing a series f manual adjustments to the spine or other articulations of the body, in order to correct the musculoskeletal system, evaluating the functions of the neuromuscular skeletal system and the spine using systems of chiropractic diagnosis, diagnosing health problems by reviewing patients’ health and medical histories; questioning, observing and examine patients and interpreting x-rays. In addition, they are responsible for maintaining accurate case histories of patients’ medical histories, obtaining and recording patients’ medical histories. Furthermore, they are responsible for analyzing x-rays in order to locate the sources of patients’ difficulties and to rule out fractures or diseases as sources of problems, counseling patients about nutrition, exercise, sleeping habits, stress management and other matters and consult with and refer patients to appropr iate health practitioners when necessary. (Cited from Careerplanner.com) Students usually need two years of college before they can enroll in a chiropractic college, but some states and schools require four years. They should take courses in science and other subjects required by the chiropractic college that they want to attend. ... Chiropractors can practice only in States where they are licensed. Some States have agreements permitting chiropractors licensed in one State to obtain a license in another without further examination, provided that their educational, examination, and practice credentials meet State specifications. Most State licensing boards require at least 2 years of undergraduate education, but an increasing number are requiring a 4-year bachelor's degree. All boards require the completion of a 4-year program at an accredited chiropractic college leading to the Doctor of Chiropractic degree. For licensure, most State boards recognize either all or part of the four-part test administered by the National Board of Chiropractic Examiners. State examinations may supplement the National Board tests, depending on State requirements. All States except New Jersey require the completion of a specified number of hours of continuing education each year in order to maintain licensure. Chiropractic association s and accredited chiropractic programs and institutions offer continuing education programs. (Cited from BLS.gov) Median annual wages of salaried chiropractors were $66,490 in May 2008. The middle 50 percent earned between $45,540 and $96,700 a year. In 2009, the mean salary for chiropractors was $94,454 according to a survey conducted by Chiropractic Economics magazine. In chiropractic, as in other types of independent practice, earnings are relatively low in the beginning and increase as the practice grows. Geographic location and the characteristics and qualifications of the practitioner also may influence earnings. Salaried chiropractors

Detecting Plagiarism Essay Example | Topics and Well Written Essays - 250 words

Detecting Plagiarism - Essay Example In my view the student cannot provide an explanation for such an act and he would have to be reported to the university officials for this act. In that particular course he would be given a zero with a warning that if such a case occurs again he would never be able to give the course again. In an attempt to inform the student about plagiarism I would provide him with all the information revolving around the aspects of plagiarism. I would tell him that plagiarism is a dishonest act because it does not let an individual think but rather takes away his abilities to think. The person who copies does not even know what he is doing because of this act. It does not show the instructor the capabilities that one student possesses. The student can be told as to how is he being dishonest to his fellow students who are giving their full when it comes to completing assignments. The student would be informed about all the aspects which revolve around academic dishonesty so that such an act is not repeated. The student would be told about copyright infringement, falsehood and assistance without the permission of the instructor. All these are acts of dishonesty which are an attempt to change the course of assignments. If these acts of dishonesty are not recognized the student following them can gain higher marks than his peers who have worked hard with the truth. Hence it can be said that these acts of dishonesty are unjust to

The Last Temptation of Christ Essay Example | Topics and Well Written Essays - 1000 words

The Last Temptation of Christ - Essay Example The plot of the movie revolves around the life of Jesus Christ, who moves through his life, fearful of the cross that he is destined to bear. He is given solace and encouragement by his friend and disciple, Judas Iscariot who finally betrays him at his own request. Jesus is constantly fearful and at one point in the movie, he terms fear to be the driving force of the actions that he performs or refuses to perform. Jesus’s social role is talked of in the movie, but as pointed out by the film critic Roger Ebert, the movie is more about the â€Å"inner struggle† that Christ goes through rather than his position as an individual in the society (Ebert). While on the cross, Jesus is tempted to accept the offer of the devil in the guise of a guardian angel. He relents, but the viewer later gets to know that the entire passage was a hallucination, a temptation that Christ is able to overcome as he dies on the cross for the sake of mankind. The social mores of this age are portr ayed accurately in the film. However, the director, Martin Scorsese deviates from the historical accuracies where it suits his artistic purpose. The Jesus that we see in the movie is in keeping with the tradition of the Anglo-Saxon Jesus. This can be seen as an attempt on the part of the director to cast Christ in the mould of a modernist hero who grapples with his own subjectivity. On a close analysis of the movie influences of characters from modernist fiction can be found. Even though one may be able to believe that the other characters are of Israeli origin, it is difficult to believe that of Willem Dafoe. The racial belonging of the other characters too is historically accurate and they infuse a sense of authenticity to the proceedings of the movie. The practice of stoning prostitutes that is depicted in the movie too is an accurate depiction of history. This practiced was consistent with the manner in which gender operated in ancient Rome (the Roman Empire). In these societies , there existed the hypocrisy of the practice of visiting prostitutes who were at the same time, vilified and cast in a bad light. Their occupation was frowned upon; however, as is seen from the number of clients that Mary Magdalene has in the scene where Jesus goes to visit her, their existence was known to everybody. Codes of sexuality in the movie are also accurately shown and Mary Magdalene is able to lead a normal family life only after she is married in a traditional manner to Jesus. One of the most controversial scenes of the movie is the one where Jesus and Mary Magdalene are making love. This, according to the social mores of the period in which this movie is set in, would be completely acceptable, since it is post-marital. This only heightens the level of the hypocrisy that is indulged in by the people of this society when they visit a prostitute. The social position of inferiority that was assigned to women is also obvious from such a depiction. This is again, a historica lly accurate description. The position of women in ancient Rome was not a very high or respectable one. This was especially true in the case of the classes of people who did not belong to the ruling classes. This is the class that Jesus belonged to and this is again obvious from the social customs that he believes in and practices throughout the movie. The historical accuracy that is maintained in these situations enables the viewer of this movie to identify with Christ as a human and not

Women and the glass ceiling in corporate America Annotated Bibliography

Women and the glass ceiling in corporate America - Annotated Bibliography Example The gender representation at the governmental level is an interesting topic as it is indicative of a more nationwide trend and less culturally dependent and/or bound than the ways that the glass ceiling might be exhibited within the private sector; a sector more bound by group dynamics and cultures than that of the governmental sector. Examination of such a determinant is necessary and important as it gives key insights into the broad/over-arching definitions of the glass ceiling as is evidenced through a large cross-section of our current society/government. This particular article discusses the key aspects of the â€Å"glass ceiling† that has kept women from being promoted to positions of upper management and other key roles within firms. Furthermore, the researchers found what they referred to as a glass cliff exists for the women who are able to eventually break through the glass ceiling. The glass cliff refers to the fact that oftentimes women are given key leadership rol es due to the fact that key shareholders wish to rapidly shake up the management/leadership process. As such, it is oftentimes the case that these positions are awarded to women as a means of providing a sudden change of direction that the CEO or other leadership figure hopes will change the fortune of the company. When this does not occur or does not occur at the rate that the aforementioned key shareholder(s) desire, the woman is then dropped for a successive candidate.This particular study discusses the means by which women in different levels of state. and federal government advance based upon the career paths they have chosen. This study has been included within the research due to the fact that it is one of the few demonstrable proofs that exists with reference to the fact that certain factors (to include economics) can have a profound effect on the level to which the glass ceiling is implemented. Furthermore, as the reader can quickly note, not all fields exhibit the glass ce iling to the same extent as any other. However, it can be fairly safely assumed that the existence of the glass ceiling is nearly uniform in its existence throughout the workforce. Haslam, S., Ryan, M. K., Kulich, C., Trojanowski, G., & Atkins, C. (2010). Investing with Prejudice: the Relationship Between Women's Presence on Company Boards and Objective and Subjective Measures of Company Performance. British Journal Of Management, 21(2), 484-497. doi:10.1111/j.1467-8551.2009.00670.x The authors of this particular article seek to examine a swath of 100 companies within a specific time period (2001-2005). As such, the researchers hope to answer key questions concerning perception of net

Techniques for data analysis Essay Example | Topics and Well Written Essays - 4000 words

Techniques for data analysis - Essay Example Investment bank regulation differs in different nations. World trade is conducted within the balance of exchange rates. â€Å"Exchange rates play a vital role in a country's trade, which is critical to most free market economies in the world (Investopedia, 2010). The higher the value of Figure 1 Investment Banking the currency, the higher the cost of a country’s exports and the lower the cost of imports (Investopedia, 2010). Conversely, as a country’s currency decreases in value, the asking price for its exports also decreases. 1.1 Kingdom Holding Company; Saudi Arabia The financial history of Saudi Arabia is an interesting topic. Historians agree that the currency of the Mecca was adopted by Saudi Arabia by 1935. In 1926, the Saudi Hollandi Bank was formed as a part of the Netherlands Trading Company and acted as the money center for Saudi Arabia. In 1952, the Saudi Arabian Monetary Agency was formed and became the ‘treasury’ for Saudi Arabia. The halala appeared in in the late 1960s and developed as a denomination in ghirsh or riyal. The ABN is the holder for many Middle Eastern financial agencies including Riyadh, Jubail, Makkah, and Hofuf. In 1980, The Kingdom Holding Company (KHC) was created to obtain profits through investments in several different financial sectors. Headquartered in the Kingdom Centre of Riyadh, Saudi Arabia, KHC is owned and managed by Prince Al-Waleed bin Tala. KHC is a publicly traded investment company listed on the Tadawul Stock Exchange. This paper is a study of four recent events of the Kingdom Holding Company as well as an analysis of the company’s financial data. According to the company website, the Kingdom Holding Company has a primary interest in ‘high performance global brands and strategic regional interests’ (KHC, 2013). The many financial investments of KHC include 360buy, Twitter, and Four Seasons. The four investment events to be analyzed in this study are: a) January 08, 2011 - The Signing of a contract that initiates the construction of the Jeddah Tower Project with Bin Laden Group for 4.6 billion Saudi Arabian Riyals b) September 29, 2011 - After several negotiations to acquire a part of Zain Groups with telecommunications company Batelco, the Kingdom Batelco Consortium announced that it will not proceed with making a binding offer to acquire Zain Groups 25% stake in Zain KSA. c) December 19, 2011 - HRH Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, and Kingdom Holding Company announced a combined investment of $300 Million in Twitter for more than 3% share of the company. d) February 29, 2012 - Kingdom Holding Company announced the purchase of ‘Kingdom Oasis’ The purpose of the study is to find relationship between the events and abnormalities in the rates. Exchange rate values are a reflection of the mentality of the government, the investors, and the commonwealth of a country. Any indicators, variables or determinants of exchange rate movements can be linked to at least one, if not all three of these groups. Exchange rate volatility is expensive because fluctuations suggest instability. It suggests impending inflation or a rise in interest rates. Whether either of the events will actually happen does not matter. Just thinking they will is sufficient to stop investors from investing and consumers to stop spending. Inflation, interest rates

Reading Books Essay Example for Free

Reading Books Essay Reading a book is one of the best forms of entertainment a person can have. Books can take you places to a time and lifestyle that you will never visit or experience. I remember the old show called â€Å"Reading Rainbow† and it lyrics were gave a very interesting take on books they went like this: â€Å"I can twice as high take a look, it’s in a book A Reading Rainbow, I can go anywhere, Friends to know and ways to grow, Reading Rainbow, I can be anything take a look it’s in a book. † Those lyrics are so true. Reading a book you can read about how life was in the 1700’s up until our generation today. I could be a detective who solves a famous mystery or I could be the killer trying to get away. I can learn to speak another language. There are so many things and topics in reading a book that can change your appearance, your political viewpoints, and change your attitude. Some say that books might become obsolete because movies are made from these books and you can watch the movies in two hours. Watching the movies a person feels that you can get the plot and conclusion of the book in two hours. This is true but for example if it is true life story the movie are going to change some parts of the books to make it more enjoyable, whereas the book is going to give you every detail the author wants you to have. Books gives people a conversation piece just like a movie but the only difference is books can join the world. Movies can’t be seen in some countries but a book can be read. So like the Reading Rainbow says â€Å"take a look it’s in a book†. So in conclusion reading a book is the best form of entertainment. Stephanie C. Williams November 20, 2010

Analysis on Guy de Maupassant’s The Necklace Essay Example for Free

Analysis on Guy de Maupassant’s The Necklace Essay There is a great deal in keeping and evoking good and rational values. This is the chief lesson of that famous short story titled ‘The Necklace’ written by Guy de Maupassant (1) in the late Eighteenth Century. This short story tells about the proud-turned-tragic life of Madame Mathilde Loisel who dreams of an aristocratic status in life so that she would be able to experience the patrician lifestyle of some of her Parisian female friends. The life of Madame Mathilde Loisel shares a moral story that one has to have the right and proper moral values in order not to be blinded by empty materialism and pompous luxurious lifestyle. This means that there are more valuable intangible things in life that cannot be acquired by money; they can only be obtained by having rational insights and principles in life. These precious things are our human values. Human values cannot be measured by any material or monetary estimation, nor can they be taken away so easily like any commodities in the market. This means that if one possessed the right and rational values, he/she cannot be deceived by any fine and worldly things. But this does not mean that one has to denounce materialism totally. Â  The Necklace (Maupassant 5) centers on the covetous life of Madame Mathilde Loisel who is not satisfied with her middleclass position in life. Her secret sorrow is her not having all the material lavishness she desires around her. She hates the impoverished people who worked their bodies like animal just to eat three times a day. Most of the time, she spends the day thinking herself as a wealthy chatelaine who basks in the praises and admiration of people around her. She wants to be the center of attraction, and the only way to achieve this is to have expensive and luxurious garments and jewelry. Â  Madame Mathilde Loisel’s husband, Monsieur, cannot satisfy her desire in life since the latter’s salary as a clerk in the Ministry of Public Instruction is not enough to even buy her an expensive evening dress for a ballroom party. The night that changed her life forever comes when her husband receives an invitation to an official social gathering at the Ministry. Stricken by her desire to be the center of attraction at the said party, Madame Loisel is troubled because she has no appropriate elegant outfit and ornaments for the party. Luckily, her husband buys her a new dress taken from his own savings, while she borrows a stunning diamond necklace from her friend, Madame Jeanne Forestier. That night, Madame Loisel catches the attention of all the guests and even high-ranking officials because of her beauty. She enjoys the fleeting moment as the center of attraction at the dance party. However, her tragedy begins upon realizing that her diamond necklace is missing. They try to look for the missing necklace but to no avail. Â  Because of her lingering pride, the Loisel couple decides to purchase a matching diamond necklace as replacement for the lost necklace of her friend. The new diamond necklace that worth thirty-four thousand francs costs Madame Loisel her entire inheritance and the couple also incur huge debts. As a result, Monsieur and Madame Loisel have to work extra jobs in order to make both ends meet. After ten years, Madame Loisel is now older, shabbier, and less refined from a decade of physical work. Still proud and appearing tough, Madame Loisel still has the audacity to her old associates that she had once lost a diamond necklace. In the end, she is deeply depressed when she is informed by Madame Forestier that the long lost necklace is just a replication costing not more than five hundred francs. Had it not been for her covetousness and immodest desire for finer things, Madame Loisel would not have suffered her sorry fate. Her story is never new to people during her time, much more to people in this contemporary era. Today most people live beyond their means just to please others, or just to show others that they can afford to buy trendy stuff and hi-tech gadgets like cell phones and gaming gizmos. This only means that one has to have the rational and proper values so as not to be blinded by things of material value. These values may include industry, patience, humility, discipline, contentment, respect for others, and sense of self. People like Madame Loisel lack most of these good, rational qualities. If Madame Loisel only had the right values, she would have been content of what she has. But make no mistake, it is not wrong to desire for material things as long as you have the capacity to obtain them. To a person with proper values, he/she will have to work first before coveting for material objects around him/her. Â  One has to be patient in his/her work. If one wants a particular product displayed in a fashion boutique, he/she has to work hard for it. Having the right values, a person cannot be easily swayed by the tempting material luxuries around him— what he will do is to take it as an inspiration to improve his status in life. Reference: De Maupassant, Guy. The Necklace. Dramatic Publishing,

Tourism Development In Rome Tourism Essay

Tourism Development In Rome Tourism Essay The food; the original Italian cuisine, the weather, the habits, the Italian temperament of the people in Rome, represents a big part of the Italian culture. However, the city is a live market and sells from each attractions souvenirs, guided tours to the city or specific tour experiences, local products, to the airlines, the 100.000 beds ( from hostels to villas) and restaurants and bars a tourist would visit in order to feel like a local Roman. Furthermore, Rome first became a major artistic center during ancient Rome, due to the evolvement in architecture, painting, sculpture and mosaic work. Also, the city was influenced and inspired by the baroque, and Rome became the home of famous figures of the time; artists and architects, such as Bernini, Caravaggio, Carracci etc. This fact attracts people interested in art for the galleries and the museums. Metal-work, coin die and gem engraving, ivory carvings, figurine glass, pottery, and book illustrations are considered to be minor for ms of Roman artwork. Rome hosts the Cinecittà   Studios, the largest film and television production company in the Italian cinema, where a large number of the biggest Italian box office hits are filmed. Nowadays, many tourists visit the Dolce Vita city in order to see where some remarkably artistic jewels were filmed. Tourism Development in Rome The citys utter aim is to conserve the right balance between development and conservation. The effect of this planning approach is that focusing on enhancing Romes status of by governmental action for the tourism resources only, which may lead to new imbalances in the current level and potential of development of the urban/metropolitan region of Rome. The city has always been an important destination for international cultural and religious tourist flows, and for many decades such role has been almost unintentional as did not require specific planning measures given the importance of the amenities provided. In recent years, local government investments have promoted a tourism offer which is still strongly linked to the historical artistic value of the city center, also in the attempt to lengthen the average tourism stay. (as seen to Appendix 2) During the last decade there is a rapid development in the city tourism with a growth rate more than double, in contrast with the mass tourism. The city-breaks trips are already a fact in the international tourism. The city-break trips consists one of the most important tourism moves of the European metropolitan destinations, especially on weekends. The noticeable increase in the city tourism is related with the changes in lifestyle. Today people work harder, with larger working mobility in contrast to the past. They have less vacation days and the demand is focusing on more and short trips. In the same time, new growth perspectives were created by the abrupt development of low-budget airlines (Easyjet, Ryanair) More than 50% of those trips are by air and the 40% with really cheap flights. Moreover, the city-breaks are not affected by seasonality, which is a major problem for tourism. Rome was always a destination that attracted peoples attention. During the centuries Rome has been an Empire center, a religious focal point, a major archaeological hub and an artistic limelight. However, the popularity of the city had its shifts because of the social, financial or political circumstances. Eventually, all destinations enter the market maturity leading to a decline in tourists. The managers and the policy makers in order to prevent the tourist decline have to reposition the destination appeal. Nonetheless, Rome is not a mature destination. No matter how many shifts Rome had, it cannot be considered as a mature destination. In 2007, Rome was the 11th-most-visited city in the world, most visited in the European Union, and the most popular tourist attraction in Italy. Its historic center is listed by UNESCO as a World Heritage Site. Monuments and museums such as the Vatican Museums and the Colosseum are amongst the worlds 50 most visited tourist destinations (the Vatican Museums receiving 4.2 million tourists every year) (see Appendix 3). In 1960 Rome hosted the Summer Olympics. The city also played host to the Eurovision Song Contest in 1991 and the MTV Europe Music Awards in 2004. Rome has been ranked currently by the Global Cities Index (GaWC in 2010) as a beta+ world city, with a score of 2.56 in the 28th position, falling down from its alpha- status in 2008 and being the highest-ranking city in Italy. Furthermore, Rome was in 2008, also ranked 15th out of all the cities of the world for global importance, mainly for cultural experience. Rome is also widely acknowledged as a world fashion capital. It has been ranked the worlds 4th most important center for fashion in the world (Capital, 2009) after Milan, New York and Paris. International and luxury fashion houses are headquartered or were founded in the city. However, Rome with a new branding marketing tries to be an emerging destination and to provide to the tourists something new. It is a de stination widely known for its history, the culture, the cuisine and the attractions. The difference between mature and emerging tourism; is that Rome reached the peak of its status and even if there were some years that the tourism income and arrival numbers were diminished, the image policy and the brand marketing strategy made Rome competitive again to its rivals; Paris and London. Rome attracts more tourists than any other Italian city. Type of Tourists It is supported that 12 million of tourists visit Rome. The most usual type of visitors Rome has is: anyone studying art history, architecture or archaeology in Italy or member countries for city-break trips. Also, sometimes school groups, art experts and collectors and fashion icons visit the city for educational, business reasons or shopping. Rome as one of the most romantic and picturesque city worldwide, attracts many couples, too, just like the religious tourism, due to the Vatican, the Catholic Church center. It is a destination that lures people of all generations and, social levels to the world famous Romes attractions. Apart from traditional tourism, Rome is also currently living a productive moment on the economic and social scale, and has operations that are typical of global cities, in that it can also attract tourism flows that are not essentially for holidays. According to a research (ESPON, 2006), Rome is classified as a metropolitan growth destination; a city for the mass tourism, competitive, and is connected with the ranks to the two European competitors of London and Paris. The Tourism Department of Rome and Lazio together with APTRL, the operating institution responsible for the actual promotion of the region, will attend the ATM with the tourist board for Italy at Arabian Travel Market. Furthermore, in 2008 the Italian government started The Second Tourist Centre project, in order to revolutionize the appeal and promotion campaign of the Rome area. The Capital will be able to diversify and boost its appeal. Through its Second Centre the Capital is aiming to propel the historic core of the city and to carve out a major role also in those corners of the market which had been rarely appreciated, such as, for example, trade fairs, tourism conferences, sports and recreational activities, archaeological sites, natural reserves, ports and airports. In these areas, they are focusing on the facilities. A variety of structures (theme parks and congress halls) will improve the image of the city looking to the needs and demands of every kind of traveler, from leisure-seekers to businessmen. It is a new-look Capital, offering a much broader range of entertainment and cultural attractions. Stakeholders and the Tourist System. Stakeholders are essential to a tourist destination, since they can influence the growth of an area. Stakeholders can be categorized in: the public sector, the private sector, voluntary sector, community and tourists. For the case of Rome, numerous stakeholders are associated some of them forming partnerships, but all working towards the development and rehabilitation of Rome. Tourists Tourists are the basic stakeholders of Rome and of every tourist destination, without whom there is no tourism industry and general no tourism. They expend millions of euros every year by visiting Rome and have an impact on the town, for example by reducing unemployment using the local people. Tourists impact to the towns development is significant; their needs and demands can create trends and affect the international tourism market. ENIT: National Agency of Tourism (ENIT: Agenzia Nazionale del Turismo) Enit was established by the government and has already almost one hundred year old activity of promoting Italy as a tourist destination. ENIT has institutional autonomy with regards to management, accounting and organization, under the direction of the Minister of Tourism. ENIT is responsible for promoting Italy and each region, like Rome, as a tourist destination. It promotes the various touristic aspects of Italy as a whole and sets up the promotional strategies on a national and international level, with the aim of informing countries abroad of what Italy has to offer as a tourist destination, so motivating tourism in Italy. Enit provides consultation and assistance to the Italian State, the Italian Regions and to other public organizations with regards to tourist promotion of products, allowing them to tailor commercial strategies that allow Italy to present itself in an effective manner on the foreign markets. It organizes consultancy services, assistance and collaboration in fa vor of public and private bodies, by including regional offices and agencies, to promote and to better develop the hospitality sector, as well as providing information to tourists. (Turismo, 2005) Enit is an important help for Romes promotion, but the help would be more significant if it was specialize only in Lazios region. Rome.info Rome.info is an independent, non-commercial website designed to obtain visitors and new arrivals to Rome with essential information about Rome and its surroundings. (Rome.info, 2009) Turismo Roma Turismo Roma is Romes tourist portal. The Offices responsibilities are to be responsible for the management of tourist welcome services. It organizes the promotion of events in Italy and abroad. It raises Romes profile in Italy and abroad. It participates in Italian and international tourist fairs and coordinates of projects aimed at increasing the arrivals of tourism during low seasons. Also, Turismo Roma is responsible for tourist publications to promote travelogue on the subject of the citys historical and cultural legacy and the coordination of Second Tourist Polo (Centre) projects. (Roma, 2008) Recommedations The city of Rome aspires to increase the number of travelers with a Second District of attractions in the Eternal City. These attractions are irrelevant with the churches and archeological sites in order to attract new visitors and those who have already visit Rome but would only make another visit to experience something completely new. Mauro Cutrufo, Romes Vice mayor, claimed that Rome has made an increase of 1 million visits from 2009 and is expected to be doubled in 2011. Rome succeeded to attract the Chinese market by a astonishing 400. Nevertheless, Rome is not pleased with the 14 million tourists Rome had in 2010 and try to compete Paris and Londons activity and arrivals. Besides the big targets of a Formula 1 race in Rome by 2013 and the Olympic Games of 2020, Rome aims to a recreation with green parks, new golf clubs, expanded congress and fair events, and new facilities to improve the yachting and sailing due to revive alternative tourism. Those projects are in the most advanced stage and Rome is awaiting to their results. (Rome, 2011) Word Count 2645 Executive Summary This portfolio provides a designation and analysis of the current tourism development in Rome, the originating markets and type of visitors as well as the stakeholders and the way they Influence Romes growth. This paper approaches the subject through demonstrating and analyzing statistics and tables about the visitor flow in Rome through the years. All these can be found in the appendices.

Cuban Reform Essay -- International Government

Since the Cuban revolution, Cuba has been characterized as having a powerful centralized government and as being socialist in nature. Fidel Castro maintained leadership of Cuba from 1959 until 2008 and guarded Cuba away from capitalistic ideology. Throughout his presidency, he was able to curtail the establishment of privatization and economic liberalization. For instance, as late as 2006 the public sector made up 78% of the economy and the private sector only made up 22% of the economy (Oxfam). However, with the election of Raul Castro in 2008 by the National Assembly, there seems to be a shift in ideology that is less antagonistic toward decentralizing power, privatization, and economic liberalization. Raul Castro has brought reforms to Cuba that limit the power of government, weakens the influence of communist hardliners, and boost the ability of the Cuban people to participate in the economy without government supervision. All in all, Raul Castro is preparing Cuba for a period in which the Cuban Communist Party is becoming more moderate and market-oriented practices are being sought after and implemented. One of the biggest reforms in Cuba has been the implementation of term limits on political offices. They were first proposed at the Communist Party national conference in 2011, in which Raul Castro urged the adoption of ten-year terms, including a two five-year term limit for the presidency (Bo). The proposal of term limits manifested itself from Castro’s plan to feed democracy into Cuban politics. He believes that the term limits will allow new ideas into government as a result of more people participating in Cuba’s political system over a shorter period of time. The proposal’s popularity proved itself when it w... ...food production and the benefits of localizing it. Neill, Morgan. "Raul Castro Pushes Change for Cubans." CNN. Cable News Network, 26 Apr. a Talks about the profits made by private farmers after they were given land for food growing. Robles, Frances. "Cubans Who Work More Will Get Higher Salaries." MiamiHerald. Miami Herald, 11 June 2008. Web. 01 Apr. 2012. Explains the changes from flat rate wages to wages that respond to work ethic and position. "Social Policy at the Crossroads." Oxfamamerica. Oxfam, 05 Mar. 2009. Web. 02 Apr. 2012. Gives the statistic of the amount of food Cuba imports. Sullivan, Mark. "Cuba: Issues for the 112th Congress." Congressional Reasearch Service. Federation of American Scientists, 24 Feb. 2012. Web. 15 Apr. 2012. Report that informs of the economic changes undergoing Cuba since Raul Castro’s presidency, financial statistics. Cuban Reform Essay -- International Government Since the Cuban revolution, Cuba has been characterized as having a powerful centralized government and as being socialist in nature. Fidel Castro maintained leadership of Cuba from 1959 until 2008 and guarded Cuba away from capitalistic ideology. Throughout his presidency, he was able to curtail the establishment of privatization and economic liberalization. For instance, as late as 2006 the public sector made up 78% of the economy and the private sector only made up 22% of the economy (Oxfam). However, with the election of Raul Castro in 2008 by the National Assembly, there seems to be a shift in ideology that is less antagonistic toward decentralizing power, privatization, and economic liberalization. Raul Castro has brought reforms to Cuba that limit the power of government, weakens the influence of communist hardliners, and boost the ability of the Cuban people to participate in the economy without government supervision. All in all, Raul Castro is preparing Cuba for a period in which the Cuban Communist Party is becoming more moderate and market-oriented practices are being sought after and implemented. One of the biggest reforms in Cuba has been the implementation of term limits on political offices. They were first proposed at the Communist Party national conference in 2011, in which Raul Castro urged the adoption of ten-year terms, including a two five-year term limit for the presidency (Bo). The proposal of term limits manifested itself from Castro’s plan to feed democracy into Cuban politics. He believes that the term limits will allow new ideas into government as a result of more people participating in Cuba’s political system over a shorter period of time. The proposal’s popularity proved itself when it w... ...food production and the benefits of localizing it. Neill, Morgan. "Raul Castro Pushes Change for Cubans." CNN. Cable News Network, 26 Apr. a Talks about the profits made by private farmers after they were given land for food growing. Robles, Frances. "Cubans Who Work More Will Get Higher Salaries." MiamiHerald. Miami Herald, 11 June 2008. Web. 01 Apr. 2012. Explains the changes from flat rate wages to wages that respond to work ethic and position. "Social Policy at the Crossroads." Oxfamamerica. Oxfam, 05 Mar. 2009. Web. 02 Apr. 2012. Gives the statistic of the amount of food Cuba imports. Sullivan, Mark. "Cuba: Issues for the 112th Congress." Congressional Reasearch Service. Federation of American Scientists, 24 Feb. 2012. Web. 15 Apr. 2012. Report that informs of the economic changes undergoing Cuba since Raul Castro’s presidency, financial statistics.

The Growth of Marietta in Barbara Kingsolvers The Bean Trees Essay

The Growth of Marietta in The Bean Trees Barbara Kingsolver, in the novel The Bean Trees, portrays the story of a young woman, Marietta Greer, learning about love, responsibility, friendship and the human condition. All of us can relate to the struggles of every day life; however, it is when we must deal with issues that we would rather run from that show our true character. Sooner or later, we all have to confront issues that life bestows on us. Â   Marietta embarks on her journey west in a 1955 Volkswagen with a pledge to get away from Kentucky. She fulfills a promise she has made when she changes her name to "Taylor" after passing through a town named Taylorville. While traveling in Oklahoma, she acquires a three year old she names "Turtle." It is when Taylor's car breaks down in Tucson that she and Turtle begin their new life together. Through their travels, they meet up with people who draw them in and provide love and support. Their new friends, Lou Ann, who becomes their roommate, and Mattie, Taylor's new boss, convince Taylor to return to Oklahoma to find Turtle...

Ethics and Legal Issues

Kent has to deal with some ethical and possibly legal issues in the marketing of his game â€Å"Lucky†. Ethically he has to figure out if it is acceptable to market a game that focuses on nudity, violence, and gambling. As far as legal issues, is it legal to market these things in foreign countries and even online. If they can market this game in other countries they will have to change portions of the game for each of the countries that Brad has looked into targeting. Kent has basically two options. Discontinue the development of the game due to moral and ethical issues. Or he could go along with what Brad has suggested and market foreign countries. The question here seems to be is it worth the trouble it could bring to market nudity, violence, and gambling? Or should they just go in a different direction that would be less of a moral and ethical issue. Sex, violence, and gambling are basically everywhere these days. There are ads on television all the time that use sex to sell anything from beer to cars. Movies these days play off all three of these. Video games for kids these days promote violence all the time. Just look at Las Vegas, they openly market sex on the street as you walk down the road. And clearly it is know for gambling. Casinos are starting to pop up everywhere these days, not to mention that almost every state has a lottery. It is all accepted, but some people find it unacceptable, especially if they have young children. Marketing sex, violence, and gambling in other countries is acceptable if it is a part of their culture. But then again it comes down to a moral issue for the people or company that is involved.

Swot Analysis of Carnival Cruiselines

Strategic management is important to the success and expansion in most businesses. What is Strategic management? It is the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives (slide 1-4, chapter one of The Nature of Strategic management). Why would this information be vital to Carnival Cruise? The annual revenue for just the U. S economy was 37. 85 billion dollars and the annual increase for the company is 7. 4% (Cruise Ship Industry Statistics).That is a huge profit margin and is vital reason why the cruise industry takes strategic management so seriously. Strategic management also helps companies figure out how to create better and more profitable business strategic plans. This helps Carnival Cruise make tough decisions biased among many decisions. Let’s start with Strategy formulation. It starts with the company having a vision and mission statement. It also helps identify the strength s, weaknesses, opportunities, and threats (SWOT) (slide 1-8, chapter one of The Nature of Strategic management).Why does a successful company need this? It helps determine what ventures to leave behind or enter. It helps reduce wasting resources and helps improve how companies operate. It also can prevent hostile takeovers and guide paths in international markets or expanded operations to diversify. Strategy implementation also called the action stage going to help Carnival develop annual objectives, policies, motivation tactics, and allocate resources (slide 1-10, chapter one of The Nature of Strategic management). Strategy implementation is very important stage. Only 19. 9% of the U. S. opulation has taken a cruise and of that 19. 9% the average age of a passenger is 50+ years old (Cruise Ship Industry Statistics). To maintain a high profit margin a company needs to find ways to save on expanses and entice new customers. It is especially important in today’s economy because many people are saving and not spending on luxury items. Strategy evaluation is how companies can review external and internal factors that are the bases for current strategies, measuring performance, and taking corrective actions (slide 1-11, chapter one of The Nature of Strategic management).Carnival Cruise understands this and uses it to gain a competitive advantage. Let’s start with the company’s vision statement. â€Å"To consistently provide quality cruise vacations that exceed the expectations of our guests† (Carnival Team). This helps a company figure out what path it wants to take. Many companies view this as the first step in strategic planning (slide 1-16, chapter one of The Nature of Strategic management). Vision statements are underestimated in many businesses. It can help draw the team together and provide a universal goal.Carnival Cruise’s vision statement is short, sweet and direct to all who read it. A mission statement provides identifi cation for many companies and answers the question of, â€Å"what does our business portray or do? † Carnival’s mission statement is, â€Å"Our mission is to take the world on vacation and deliver exceptional experiences through many of the world’s best-known cruise brands that cater to a variety of different geographic regions and lifestyles, all at an outstanding value unrivaled on land or at sea. † They have one of the better mission statements compared to other competitors.It lets all know who the customers are (everyone in the world are customers), what products are offered (vacations), and what markets (different geographic regions) and technology (best-known cruise brands). It does all this while identifying Carnival’s philosophy and self-concept. The mission statement does not cover survival growth, public image or concern for employees. Leaving these areas out of their mission is hurting the company especially concern for survival and grow th. There are many individuals that want to go on a cruise but choose not to.Not being concerned with survival and growth limits future customers. The mission statement wants to be a value unrivaled on land or sea but does not want to bring in new customers. Having an amazing deal but not tempting new customers really does no good. It will bring returning customers back but it needs to work on bringing in new financial opportunities.Carnival Cruises can prove they understand the importance of Vision and Mission statements because of their success record. It is important for the company to really change with the times and entice passengers to partake on one of their cruises. 36 million Americans have an intention to cruise in the next three years (Cruise Lines International Association). The average money spent per person per week on a cruise is $1,770. 00 (Cruise Ship Industry Statistics). Carnival can really increase their profit margin and gain loyal and satisfied customers just b y individuals that are already planning on taking a cruise.Those customers just need to choose which cruise they want to take. In order to have a happy and returning customer, Carnival Cruise needs to create their shared vision. This helps employees understand a mission and create opportunity and challenges within their work. Vision and mission statements should create an â€Å"emotional bond† and â€Å"sense of mission† between the organization and its employees (slide 2-11, chapter two of The Business Vision and Mission). A mission statement does not suppress management and employee creativity, but creates a guideline by identifying a generalization of the company’s mission.A SWOT (Strengths-Weaknesses-Opportunities-Threats) is also a very important concept for Carnival cruise. According to the â€Å"2011 Cruise Market Profile Study conducted by TNS; Carnival had a 94% satisfactory rating among its customers and 82% of the ship passengers feel that a cruise i s the best way to sample destinations (Cruise Line International Association). In order to keep up a positive customer image is to understand the strengths and weaknesses of a company. Here is an example of Carnival’s SWOT: (Carnival Cruises SWOT Company Profile)Strengths Carnival is one of the world's largest cruise operators, has a large fleet capacity and operates 11 of the most recognizable cruise brand names.Their portfolio of brand names appeals to almost every niche market, from budget minded, contemporary to luxury cruises.They are such a large company that they have significant cost advantages over most of their competitors.Carnival is one of the profitable cruising companies. The company's average net income (FY2005 to FY2009) amounted to 18. 1% compared to the industry standard of 6. 3%.Carnival aggressively and effectively invests in print and television media. Their promotions target the lifestyles of each group of customers.   Carnival are â€Å"Fun Shipsâ₠¬  Holland America, a premium cruise, is promoted through the tagline â€Å"a signature of excellence† Seabourn, projects itself as â€Å"intimate luxury† while the Ocean Village projects as â€Å"the cruise for people who don't do cruises†.Carnival has a 47% market share in the UK, 68% in Italy, 51% in Germany and 45% in France.Weaknesses The net profit was $1,790 million in FY2009, a decrease of 23. 2% as compared to 2008.Carnival derives a majority of its revenue (nearly 52%) from US customers. In 2009 the revenue from the North American market registered a double digit decline.   The over-dependence on the US market makes Carnival vulnerable to the economic fluctuations of the American economy and this company is dependent on customers’ disposable income.Another weakness is that Carnival reports their financial statements in dollars. About half of their revenue is generated in a non-US currency, but is reported in terms of US dollars. The value of the dollar against Euro appreciated from 1. 60 in January 2010 to 1. 53 by April 2010 against the Pound. If the dollar strengthens it would record a lower revenue than is actually earned.In the middle of economic uncertainty Carnival has 13 ships under construction as of November 2009, and the estimated cost of all this growth is around $8. 2 billion. It is difficult at best to justify such a huge cash outflow in the middle of economic instability. This may result in consequences like huge debt burden on the balance sheet and reduced profitability.Opportunities The cruise industry has grown considerably in the past 10 years but still occupies a very small proportion of the global vacation market. Cruise lines accounted for only 4. % of the $542. 2 billion worth of the travel industry in 2009. While the revenue for cruises has declined in the US, it is growing in Europe and Asia, leading to more opportunities for Carnival to expand in these regions.They are planning to increase berth capacity for the European market 37% by 2012.Customers in Asia are now looking for luxurious cruises as a vacation option. Disposable income of the Chinese consumer has grown annually by 10% a year. The total number of passengers sourced from China increased approximately 74% in 2009 so the Costa Classica was launched specifically for this market.They are also planning to introduce the larger cruise liner Costa Romantica in 2010.Trends have shifted in the cruising industry towards the 45-60 year old age group. As this age group grows in population, Carnival can take advantage of the economies of scale and offer them the best prices.In July 2009, Carnival announced the union of Costa Europa with Thomson Cruises, a British Travel Company, under a 10-year bareboat charter beginning in April 2010. ThreatsCarnival has been taking advantage of special tax loopholes to avoid paying US corporation taxes. In 2009 the US government decided to look at closing those loopholes. If these loophol es are closed, it could affect their financial statements and fiscal bottom line in the future.The U. S. Environmental Protection Agency has changed laws to reduce the sulfur content (emission) in fuel oil used aboard ships. This increases the demand for lower sulfur fuel, which raises the prices of the fuel. Carnival may have to deal with a significant increase in fuel prices.In 2009, Carnival experienced bad press when three passengers fell off ships in a three week period. There were a total of 22 incidents of passengers falling overboard in 2009. As of December 2009, Carnival was not required to report such incidents. Such events reflect negatively on the company and the industry.In December 2008, passengers on the Carnival owned Oceania cruise ship were attacked by Somali pirates. The ship sped away and no one was injured, but the threat of terrorism and pirates overtaking cruise ships is a concern for companies in this industry, and also negatively affect consumers’ per ceptions of cruising. The SWOT of a company is extremely important. It helps identify the strategic-management model. What is a strategic management model?It helps identify better strategies through the use of a more systematic, logical, and rational approach to strategic choice (slide 1-28, chapter one of The Nature of Strategic management). This all leads to a higher financial profit and happier customers for Carnival. Strategic planning is beneficial in so many ways. It helps improve communication, understanding and improving commitment. This all leads to a stronger company with a larger financial backing and loyal customers. Knowledge is power and it creates a high-performing firm or in this case a cruise company.

Prospects of Islamic Banking

Texts Articles Cases Internet References 3 Acknowledgment I would like to forward my utmost gratitude to a number of people, for their generous co-operation and assistance, in the course of preparing this monograph. Mr Howard Johnson for reviewing my thesis plan, Professor Bob Lee for his invaluable insight on Chapters 1-5 and finally Dr PaulBridges and Dr Simon Norton for their enlightening views on several issues. I dedicate my efforts to ‘Bhaijan’, who has always been the inspiration and my guide throughout my life. 4 Preface At present times, it would not be inappropriate to state that Muslims the world over face the dilemma that their religion, Islam, prohibits interest in stringent terms and aims at establishing an economy that is not only free from all forms and kinds of interest, but also from anything that bears any resemblance to it.The modern economy is heavily based and reliant on interest and it is hard to envisage any set of economic relations where interes t does not play a part, whether directly or indirectly. Resolving the above-mentioned contradiction seems to be a challenge that Muslim intellectuals, bankers, industrialists, businessmen, policy-makers and ordinary consumers face. In a nutshell, this monograph seeks to provide an analysis of the workings and practices of Islamic banking industry and the products it offers; covering legal, political, social and economic issues as they relate to it.Chapter 1 commences by providing a rationale to the Islamic banking and outlining its historical journey, and ends with a discussion on the riba and its prohibition in Islam. Chapter 2 deals with the modes of Islamic finance, which certainly requires a detailed study, as it is these products that form the cornerstone of the entire Islamic banking industry. Shariah precepts are also introduced at this stage (and are discussed throughout this monograph), as they aid the process of comprehension. This chapter would also serve to introduce a d iscussion on Islamic Project Finance, dealt within the following chapter.Chapter 3 deals with Islamic Project Finance in practice, focussing on the legal and other economic issues as they relate to Shariah-Related Documentation, Construction and Lease Financing and Islamic Bonds. Chapter 4 consists of two case-studies, highlighting the Common law developments in Shariah law, as it relates to the Islamic banking industry. Two recent judgments (one from UK and another from Pakistan) are specifically perused, reflecting the stance that the judiciary in the two countries have adopted towards Islamic precepts, its interpretation and application.Chapter 5 raises issues relating to structuring and offering of Shariah-Compliant investment products. In particular, focussing on the role of financial institutions, fund promoters and Shariah advisors. The chapter concludes by providing a comparative analysis on the legal issues linked to the marketing of Islamic investment products in different jurisdictions. Chapter 6 provides an insight to the regulatory and supervisory practices of Islamic banking in various countries.Obstacles faced by the Islamic banking industry in their progress as regards their set up in interest-based banking jurisdictions is further addressed, which is supplemented by a case study on the regulatory issues of Islamic banks in India. 5 Chapter 7 is meant to be general, and briefly discusses the lessons that Conventional and Islamic banks can learn from each other, addressing issues such as the effect of technology transfer and the Bank-Client relationship, which would ultimately lead to the progress of one another. Chapter 8 concludes this monograph. It ascertains the merits of introducing Islamic banking globally.Reforms and suggestions for the Islamic banks are also appended to this chapter, together with a few conclusive remarks on the subject. It is aspired that this work will be a positive contribution on the subject of Islamic banking and it s practices. Suggestions and criticisms are solely intended to enhance the progress of this relatively nascent banking industry, which has undoubtedly shown major signs of progress. 6 Glossary of Arabic Terms This section explains some of the Arabic words and terms, most of them appearing in this study, whereas others might relate to them and would thus be of interest to the reader.Allah is Arabic for God. Fatawa (singular. Fatwa) are legal decisions or opinions rendered by a qualified religious leader (mufti). Fiqh is Islamic Jurisprudence, the science of religious law, which is the interpretation of the sacred Law, Shariah. Gharar is uncertainty, speculation. Hadith (plural. ahadith) is the technical term for the source related to the Sunna; the sayings- and doings- of the Prophet Mohammed (pbuh), his traditions. Halal means permitted according to the Shariah. Haram means forbidden according to the Shariah. Jualah is the stipulated price (commission) for performing any service.May sir mean gambling, from a pre-Islamic game of hazard. Muslim is on who professes the faith of Islam or is born to a Muslim family. Qard Hasan is a benevolent loan (interest-free). Qiyas means analogical deduction. Quran is the Holy book, the revealed word of God, followed by all Muslims. Riba is literally excess or increase, and covers both interest and usury. Shariah is Islamic religious law derived from the Holy Quran and the Sunna Shirka (or Sharika) is a society or partnership. Surah is a chapter of the Holy Quran. Takaful refers to mutual support, which is the basis of the concept of insurance or solidarity among Muslims.Umma means the community; the body of Muslims. Waqf is a trust or pious foundation. Zakat is a religious levy or almsgiving as required in the Holy Quran and is one of the Islam’s five pillars. (Courtesy: Lewis & Algaoud, Islamic Banking, Edward Elgar, 2001, Glossary, x, xi. ) 7 Chapter 1 Introduction and the Basis of Islamic Banking A. Rationale from an Islamic perspective It is argued by proponents of the Islamic banking that in today’s world, the economic system that is based on interest has resulted in concentrating the wealth in the hands of selected few, creating monopolies and further widening the gap between the affluent and the poor.Islamic finance operates in compliance with the Shariah law. Islam is not anti-commerce (the Prophet Mohammad was himself a merchant). In contrast to the modern Western principles and philosophy, Islam encourages circulation of wealth and considers its role as vital to an economy. As Dr Usmani notes in his book, â€Å"just as clotting of blood paralyzes human body, concentration of wealth paralyzes economy. The fact that, today ten richest men in the world have more wealth than forty-eight poorest countries of the world is relied by the supporters of the Islamic banking as a testament to the fact that the current economical set up is unjust and has failed to distribute the wealth propor tionately, thus leading to the downfall of humanity. 1 On considering the injunctions of the Holy Quran, it is apparent that the system of distribution of wealth laid down by Islam envisages three objects, namely: (a) The establishment of a practicable system of economy. (b) Enabling every one to obtain, what is rightfully due to them. c) Eradicating the concentration of wealth. The traditional concept of Muslims that Islam is a unique way of life distinct from all other isms and ideologies extends to the economic life of the Muslims (Umma). In the process of reshaping the economy, the areas of money, banking and investment are regarded as extremely vital to the process of Islamisation of the economy. The Islamic emphasis on co-operation as the key concept in economic life has led to reliance on profit-sharing and participation as the alternative bases for banking and investments in the Islamic framework. The concept of Islamic banking is regarded as one of the few original and crea tive Islamic ideas that have been successfully tried in recent times. In the not too distant past, the entire banking system in all Muslim countries was designed on the Western banking model; the latter being inconsistent with Islamic law primarily due to the disapproval of Riba (i. e. interest) in Islam. In other words, the elimination of Riba 1 Meezan Bank’s Guide to Islamic Banking by Dr Muhammad Imran Ashraf Usmani, Preface, page 7, Darul-Ishaat, 2002. 2Issues in Islamic Banking, Selected Papers by M. N. Siddiqi, page 9, Preface, 1983. 8 from financial transactions is the raison d’etre of Islamic Banking3. Attempts to avoid dealing in interest led to the introduction of a non-interest based banking system, commonly termed as â€Å"Islamic banking†. McDowall notes that Islamic banking not only provides services that are compliant in terms of the Muslim faith, but through the fundamental concept of profit and loss sharing with their customers, deliver a highly ethical proposition to Conventional banking. As Islamic banking offers services to its customers free from interest, any dealing or transaction that involves interest is seen as erroneous and thus forbidden. Technically, riba refers to the addition in the principal amount of a loan, which the lender receives from the borrower. This deliberately simplified picture of the true complex state of affairs is something I shall return to in the following chapter in detail. B. History The Islamic financial system has a centuries-old history, as noted by Chapra and Khan (2000): From the very early stage in Islamic history, Muslims were able to establish a financial system without interest for mobilising resources to finance productive activities and consumer needs. The system worked quite effectively during the heyday of Islamic civilisation and for centuries thereafter. † However, over the centuries, the centre of economic gravity inclined towards the Western world, and the Western fi nancial institutions (including banks) became dominant and the Islamic tradition remained dormant. 5 The Muslim society never approbated interest; throughout the thirteen enturies of its history prior to domination by imperialist powers, it managed its economy and carried on domestic and international trade without any involvement of interest. Profit – sharing and different kinds of participation arrangements served as adequate basis for savings and investment and considerable capital was mobilised for mining, shipbuilding, marine trade, textiles and other industries. 6 The issue of interest free banking regained the attention of Muslim intellectuals in the 1940’s and 1950’s. By this time, numerous local and national banks were established along the lines of interest-based foreign banks.By this time, the government of Muslim countries, in particular, those who gained political independence, found themselves compelled to engage in international financial transact ions using banking systems. The necessity for commercial banking was realised. The challenge was to 3 Profit and Loss Sharing, An Islamic Experiment In Finance and Banking by Shahrukh Rafi Khan, Introduction and Overview, page 1, OUP, 1987. 4 Islamic Banking: A Brief Historical Perspective by Bob McDowall, Business and Finance, 27th May 2004. 5 Islamic Banking and Finance by Munawar Iqbal and David T.Llewellyn, Introduction, page 1, para 1, 2002. 6 Ibid at 1, page 9, para 2. 9 avoid the concept of interest within commercial banking. The path to this was the development of the concept of profit and loss sharing (Mudarabah), the key concept from which the structure of most Islamic banking products and services are derived. 7 C. Current Status All over the world, Muslim bankers and economists are faced with the question as to how they should eliminate interest and evolve new institutions and practices, which would enable economic activities to flourish without resorting to Riba in any form? In recent years, there has been a revival of interest in formulating a modern version of the historic Islamic financial system, as many Muslims’ are endeavouring to avoid interest-based practices and transactions. Islamic banking was virtually an unknown concept thirty odd years ago. Now, fifty-five developing and emerging market countries have some nexus with Islamic banking and finance and â€Å"Riba free† has become the buzzword for financial institutions that wish to attract the large and attractive customer base in the form of Muslims all over the world who are looking for Shariah-Compliant modes of investments and financings.In addition, there are Islamic financial institutions operating in 13 other locations. 9 In Pakistan, Iran and Sudan, all banks must operate under Islamic financing principles. As noted by Justice Mufti Usmani, there were 200 Islamic banks and financial institutions in forty-three countries of the world, controlling a financial pool of US$ 100 billion,10 increasing at an annual rate of 10-15 percent. The Islamic financial industry is already one of the fastest growing industries and has tremendous potential as observed by academics in general.The unorthodoxy of Islamic banking model is apparent from the fact that those who argue in favour of Islamic banking are often regarded as ‘utopians’ and ‘romanticists’, but they claim that the best form of realism could be achieved by challenging all those systems that are based on the exploitation of man in one form or the other and in seeking to set up a just socio-economic order. Dr Siddiqi argues that an Islamic economy is capable of freeing modern man from the debt-ridden economy in which he survives, and of guiding him towards a society based on justice and equity, and ultimately leading to the path of growth and stability. 1 D. Riba and its Prohibition in Islam As observed by Lewis, in order to conform to Islamic norms, five religious feature s are well established in the literature, and must be adhered to in investment behaviour. They are as follows: 7 Islamic Banking by Mervin K. Lewis & Latifa M. Algaoud, Chapter 2, Islamic Law, pages 4 & 5, Brief History, 2001. 8 Banking Without Interest by Muhammad Nejatullah Siddiqi, Foreword, para 1 &2, 1983. 9 Australia, Bahamas, Canada, Cayman Islands, Denmark, Guernsey, Jersey, Ireland, Luxembourg, Switzerland, United Kingdom, United States and the Virgin Islands. 0 New Horizon, No. 82, December 1998, p. 17. He is the Chairman of Centre for Islamic Economics, Pakistan, and a judge of the Islamic Shariah Court. 11 Ibid at 1, page 7 & 8. 10 (a) the absence of interest-based (riba) financial transactions; (b) the introduction of a religious levy or almsgiving, (zakat); (c) the prohibition of the production of goods and services that contradict the value pattern of Islam (haram); (d) the avoidance of economic activities involving gambling (maysir) and uncertainty (gharar); (e) the provision of Islamic Insurance (Takaful).These five elements give Islamic banking and finance its distinctive religious identity. 12 For the purposes of our present chapter, we need to focus briefly on element (a), i. e. absence of interest-based transactions, which is indeed the central element among the latter. Islamic finance, like Islamic commercial law in general, is dominated by the doctrine of riba, and it is imperative that we discuss this in some detail, as to its nature and prohibition. The literal meaning of the Arabic word riba is ‘increase’, ‘excess’, ‘growth’ or ‘additional’.According to Sahacht (1964), riba is simply a special case of unjustified enrichment or, in the terms of the Holy Quran, consuming (i. e. appropriating for one’s own use) the property of other for no good reason, which is prohibited. Prohibition of interest is ordained in Islam in all its forms. The latter prohibition is strict, absolute an d certain. The whole concept of interest is fundamentally repugnant to the spirit of Islam, as could be observed from the following verses of the Holy Quran: â€Å"O, believers, fear Allah, and give up what is still due to you from the interest (usury), if you are true believers. (Surah 2: Aayat 278) And: â€Å"If you do not do so, then take notice of war from Allah and His Messenger. But, if you repent, you can have your principal. Neither should you commit injustice nor should you be subjected to it. † (Surah 2 : Aayat 279) 12 Ibid at 7, page 28, para 2, 2001. 11 Chapter 2 Islamic Modes of Financing Introduction One can vividly perceive the transition in the global banking sector, from core/retail banking, to the complex and detailed role of financing, which clearly depicts sophistication and organisation of international banking community.With the passage of time, the banks have undoubtedly become multifunctional bodies, performing various roles and providing their client s with numerous desired products. Speaking of the international banking community, Islamic banking is undoubtedly a part of it. To keep up with this modernised community and to compete with their fellow-competitors, Islamic banking has introduced and refined some alternative Islamic financing products, to the ones available in the Conventional markets, in order to cater for the Muslim community around the globe.Having said that, it is open to anyone, whether a Muslim or a non-Muslim, to take advantage of these products, as long as they comply with the requirements and precepts of Islamic Shariah. At this instance, it helps to add that the prohibition of interest in Islam does not imply that the capital is not to be rewarded, nor that risk is not be priced. The Islamic system has both fixed and variable return modes to price the capital and add ‘risk premia’ in relation to the degree of risk involved.Islamic banks provide financing using two methods. The first is based o n profit-sharing and the second one deals with modes, which rely on fixed return (mark up) and often conclude in creating indebtedness of the party seeking finance. The Islamic modes of finance are unique as the debt related with financing using mark-up modes results from real commodity sale/purchase operations, rather than the exchange of money for interest-bearing debt. Furthermore, unlike the Conventional debt, such debt is not marketable except at its normal value. 3 The whole idea behind the Profit and Loss Sharing (PLS) is seen as an innovation, a modern trend if you like, and it is aspired that it will bring several merits to the industry of investment and finance, thus benefiting the community at large. It must be borne in mind that the Islamic Shariah does not prohibit Islamic banks from issuing guarantees. However, the question of the legality of the commissions and charges received by banks in issuing the guarantees has been a subject of much debate and discourse.Several banks in the Middle East have sought to tackle the latter issue by agreeing to issue guarantees at no charge, while simultaneously asking for cash collateral of a specific percentage (30 %) of the guaranteed amount, which is then invested by the bank for its own account and benefit for the duration of the guarantee. 14 13 Progress and Challenges of Islamic Banking by Abbas Mirakhor, Review of Islamic Economics 4 (2) 1997. 14 Demand Guarantee in the Arab Middle East, J. I. B. L, 7, page 271, 1997. 12In order to circumvent the ambiguities raised, a group of Muslim scholars gave their opinion on the legality of Islamic banking practices as regards guarantees. Their opinion is summarised in two segments and is as follows. 1. The legality of the issuance of a bank guarantee relies on the legality of Shariah principles of the contract in question, in respect of which the guarantee was issued. It is evident that no Islamic bank should issue guarantees in relation to items that are prohibit ed under the Shariah, including guarantees for the payment of usurious interest, the sale of alcohol, drugs, the construction of gaming places, etc.The latter may seem to be an obstacle towards an entirely independent guarantee, but its scope should not be overstated. As long as the contract in question is considered lawful by the standards of Shariah precepts, a guarantee stipulated to be unconditional and payable on first demand would be deemed valid and in force under Shariah, notwithstanding the performance or termination of the underlying contract. . Banks are entitled to receive remuneration for the issue of a guarantee. Having said that, the amount of remuneration, to be in accordance with the Islamic Shariah, ought not be fixed in accordance with the amount of the issued guarantee, but should instead be calculated to provide a reasonable compensation to the issuing bank for the time and effort that the latter spent to issue and manage the guarantee. 5 This chapter will focus on the Islamic modes of finance, other than guarantees, namely Musharakah, Mudarabah, Murabaha, Bai’ Muajjal, Ijaraha, Ijaraha Wa Iqtina, Salam, Istisna’ and Istijrar, which are available in the global financial market today, whilst providing a comparison with the Conventional finance products, wherever possible. A(i). Musharakah The literal meaning of the Arabic word Musharakah is sharing, or Shirkah, which means being a partner.There are several kinds of partnership, and they all come under the heading of Shirkah. Musharakah is perceived as an ideal alternative for the interest based financing with far reaching effects on both production and distribution. 16 The term Musharakah as used in the modern terminology, has been recently introduced by Islamic Scholars writing on the subject and is normally restricted to a particular type of Shirkah, which is Shirkat-ul-Amwal, where two or more persons invest some of their capital in a joint commercial venture.However, at ti mes it could also include Shirkat-al-Aamal, where partnership takes place in the business of services, whereby all the partners jointly undertake to render some services for their customers, and a fee is charged from the latter and is distributed among the partners as per an agreed ratio. 17 15 Shariah Related Documentary Issues in Islamic Project Finance Transactions, J. I. B. L. R 2003, page 272, para(s) 2, 3 & 4. 16 Meezan Bank’s Guide to Islamic Banking by Dr Muhammad Imran Ashraf Usmani, 2002, page 87, Chapter 13 (Definition and Classification of Musharakah). 7 Ibid at 11, page 90. 13 Musharakah is a mutual contract between the parties, and thus all the mandatory ingredients of a valid contract must be present. Furthermore, the capital in Musharakah agreement should be quantified, specified, but not necessarily merged or in liquid form. If all the partners agree to work for the joint venture, each one of them shall be treated as the agent of the other, in all matters con cerning the business. Any act carried out by a single partner, in the normal course of business, shall be deemed as authorised by all other partners. 18All scholars are unanimous on the principle of loss sharing in Shariah, which is based on the saying of Syedna Ali ibn Talib, which is as follows: â€Å"Loss is distributed exactly according to the ratio of investment and the profit is divided according to the agreement of the partners. †19 Termination of the Musharakah agreement: Musharakah agreement will be terminated in the following circumstances. 1. If the purpose of forming the ‘Shirkah’ has been achieved. 2. Every partner can exercise his/her right to terminate Musharkah at any time after giving his partner a reasonable notice. . In the case of a demise of any one of the partners or any partner becoming insane or incapable of effecting the commercial transaction. 4. In the case of damage to the share capital of one partner before mixing the same in the tota l investment and before affecting the purchase, the partner will stand terminated and the loss will be borne by that particular partner. However, if the share capital of all the partners has been mixed and could not be identified singly, then the loss will be shared by all and the partnership will not be terminated. 0 Termination of Musharakah without the closure of the business: If one of the partners intends to terminate the Musharakah, in disagreement with the other partners, the latter issue could be resolved by mutual consent. The partners intending to run the business may purchase the share of the partner who wants to terminate his partnership, as the termination of Musharkah with one partner does not affect the Musharkah between the other partners.The latter seems to be a just and a viable approach, especially in the modern situations, where the success of a particular business is conditional upon its continuity, and the liquidation or separation at the instance of a single p artner may only cause irreparable damage to the other partners. 21 18 Ibid at 11, page 91 & 92. Ibid at 11, page 94 (Rules of Distribution). 20 Ibid at 11, page 95 (Termination of Musharakah). 21 Ibid at 11, page 96. 19 14 Security in Musharakah:As regards a Musharakah agreement between the bank and the client, the bank should in its own right and discretion, obtain adequate security to ensure that the capital invested/financed and the profit that may be earned are safe. As part of the usual practice, the securities obtained by the bank, are kept comprehensively insured at the party’s cost and expenses, till the Islamic mode of insurance (Takaful) becomes operational. It is understood that the purpose of the latter security is a precautionary measure to cover for damage(s) or loss of the principal amount due to the client’s negligence. 2 Differences between interest-based financing and Musharakah: 1. As regards interest-based financing, a fixed rate of return on a loan , advanced by the financier is predetermined, irrespective of the profit earned or loss suffered by the debtor. Mushrakah agreement does not envisage a fixed rate of return, it is in fact based on the actual profit earned by the ‘joint venture’. 2. The financier cannot suffer loss in an interest-based financing. The financier under a Musharakah agreement can, possibly suffer a loss, if the joint venture fails. 3.It is argued by Islamic scholars and other academics that the interest-based financing results in injustice, either to the creditor or the debtor. If the debtor suffers a loss, it is unjust on the creditor’s part, to claim a fixed rate of profit. And, if the debtor earns a high rate of profit, it is injustice to the creditor to provide him with only a small proportion of the profit, while the debtor taking the chunk of it. As regards a Musharkah agreement, the returns of the creditor are tied up with the actual profits earned through the enterprise, which he/she financed.The greater the profits of the enterprise, the higher the rate of return to the creditor. If the enterprise earns ‘substantial’ profits, the creditor cannot acquire all of it, but has to share it with the common people, e. g. depositors in the bank. 23 Tenure of Musharakah: As regards the determination of the period of the Musharakah agreement, the following conditions operate. (a) The partnership is fixed for such a duration that at the end of the tenure, no other business can be conducted. 2 23 Ibid at 11, page 97 (Security in Musharakah). Ibid at 11, page 98. 15 (b) The partnership can be for a very short term, during which neither partner can dissolve the partnership. 24 A(ii). Diminishing Musharakah Another form of Musharakah, which has developed in the recent years, is known as Diminishing Musharakah. It involves the participation of a financier and his client, either in the joint ownership of a property/equipment, or in a joint commercial enterpr ise.The financier’s share is further divided into several units, and it is intended that the client will purchase the financier’s units of the share, one at a time, periodically, increasing his own share, until all the units of the financier are purchased by him, so as to make him the sole owner of the property or the commercial enterprise, whichever be the case. 25 B. Mudarabah This is also a kind of partnership, whereby one partner provides finance to the other for investing in a commercial enterprise.The investment is provided by the first partner called the ‘Rab-ul-Maal’, while the entire responsibility for the management and work falls upon the other partner, who is called the ‘Mudarib’. The profits generated, are shared in a predetermined ratio. There are two kinds of Mudarabah – restricted and unrestricted. Rab-ul-Maal may specify a particular business for the Mudarib, in which case he shall invest the money in that specified bus iness only. This is known as ‘Al-Mudarabah-alMuqayyadah’ (restricted Mudarabah).But if he leaves it open for the Mudarib to undertake whatever business he wishes, the Mudarib shall be authorised to invest the money in any business he wishes. This type of Mudarabah is called ‘Al-Mudarabah-al-Mutlaqh’ (unrestricted Mudarabah). A Mudarib cannot forward the money lent to him, or carry out any activity that is beyond the course of his business, without the Rab-ul-Maal’s express permission or consent. Rab-ul-Maal is entitled to oversee the activities carried out by the Mudarib. The former can also work with the Mudarib, provided the latter gives his consent.A Rab-ul-Maal can contract Mudarabah with more than one person through a single transaction, for instance, he can offer financial assistance to X and Y both so that each of them becomes a Mudarib, and the capital of the Mudarabah transaction shall be utilized by both of them, jointly. 26 It is imperativ e that both the parties should decide in advance, on the proportion of profit that each one of them should receive. However, the parties cannot suggest a lump sum amount of profit, nor can they determine the share of any party ‘at a 24 Ibid at 11, page 102 (Tenure of Musharakah).An Introduction to Islamic Finance by Muhammad Taqi Usmani, Chapter 2, page 82, para 1 (Diminishing Musharakah). 26 Ibid at 11, pages 105-108. 25 16 specific rate tied up with the capital’. If the business has suffered loss in a few transactions and made profit in some others, then the profit should be used to offset the loss/losses incurred, and whatever remains, shall be a distributed between the parties according to the agreed ratio. 27 Roles of Mudarib: He is an Ameen (trustee), who is responsible to look after the investment, with an exception of natural calamities.He is a Wakeel (agent), as he makes the purchases from the funds provided. He is also a Shareek (partner), thus sharing the pro fits with Rab-ul-Maal. He can also possibly be a Zamin (liable), and thus will have to compensate for any loss suffered during the course of Mudarabah, due to any erroneous act on his part. 28 Termination of Mudarabah: The Mudarabah will come to an end when the specified period in the contract expires. It can also be terminated by either of the two parties, at any time, by giving notice.Furthermore, in case Rab-ul-Maal has terminated the services of Mudarib, the latter will continue to perform his acts under the contract, until he is informed about the termination. 29 C. Murabaha In this particular kind of sale, the seller clearly mentions the cost of the sold commodity, and then sells it to the buyer by keeping a profit margin. Thus, Murabaha should not be seen as a loan given on interest, it is rather a sale of a commodity for cash/deferred price. As regards Bai Murabaha, the bank purchases a commodity, on a client’s behalf, and then resells it to the latter, on the basis o f plus-profit.Under this kind of agreement, the bank discloses its cost and profit margins to the client. Thus, unlike Conventional banks (which advance money to a borrower), the bank will buy the goods from a third party and sell it onwards to a customer for a pre-agreed price, thus abstaining from interest. The growing use and vitality of Murabaha agreement is proven by the fact that in Islamic banks world over, 66% of all investment transactions are through Murabaha. 30 It is argued by critics of Islamic banking that Murabaha agreements are in reality interest-based contracts, under the garb of a notional sale and buy ack transaction, profit being synonymous to interest in this case. Islamic scholars have reverted to this argument by stressing that a ‘true’ Murabaha financing structure is quite different 27 Ibid at 11, 109-111. Ibid at 11, page 111, para 5. 29 Ibid at 11, page 112, para 2 (Termination of Mudarabah). 30 Ibid at 11, page 125, Chapter 16 (Murabaha). 28 17 from an overdraft provided by Conventional banks and the former offers various benefits to the bank and its customers, namely that depositors have a share in the bank’s profits.Furthermore, the basic difference is the Aqd (contract), which specifies the Islamic conditions, as against the interest element in Conventional banking transactions. 31 Basic Rules for a Murabaha transaction: 1. The subject of sale must be in existence at the time of the sale. 2. The seller must have the ownership of the commodity in question. 3. The subject of sale must be in physical or ‘constructive possession’32 of the seller while he is selling it. 4. The sale must be instant and absolute; no provisions for contingencies should be made part of the contract. . The goods/commodity to be sold, must reflect a value and must be specified to the buyer, leaving no room for ambiguities or confusion as between the parties. 6. The sale must be unconditional and the price of the commodity sh ould be certain. 33 If a client defaults on any payment(s) by the due date, the price cannot be changed nor can the penalty fees be charged, as against him. Nevertheless, as regards dishonest clients, who knowingly and deliberately default, they should be made liable to compensate the bank, subject to the following two conditions. a) The defaulter must be given a grace period of at least a month. (b) It must be proved beyond reasonable doubt that the client is a defaulter, and he has no justifications for his latter behaviour. 34 Murabaha can only be used when a commodity is to be purchased by a customer/client. It is highly pertinent to peruse the subject matter of the Murabaha, as the documents must be signed for obtaining funds for a specified purpose only. It needs to be stressed that the Murabaha consists of several different contracts and they all play their part one after another, in respective stages. 5 31 Ibid at 11, page 126, para 2 (Arguments against Murabaha). It refers to a situation where the possessor has not yet taken the physical delivery of the commodity, yet all rights and liabilities of the commodity are passed on to him including the risk of its destruction. 33 Ibid at 11, page 126-127 (Murabaha Rules). 34 Ibid at 11, page 129, para 1 (Penalty for Default). 35 Ibid at 11, page 130-131 (Basic Mistakes in Murabaha Financing). 32 18 D. Bai’ Muajjal This is basically a sale on deferred payment.The deferred payment becomes a loan, which the buyer pays in a lump sum or instalment (as agreed between the parties). In Bai’ Muajjal all those items/commodities can be sold on a deferred payment, which come under the heading of capital, where quality does not make a difference but the natural or intrinsic value does. The price to be paid must be agreed and fixed at the time of sale. The buyer must be given complete possession of the commodity in question, whilst the seller is free to ask the buyer to provide him with guarantee in the form of a mortgage or any other item. 6 E. Ijaraha In an Islamic leasing (Ijaraha), the owner of the asset, while retaining the corpus of the asset, transfers its usufruct to another person for an agreed period, at an agreed consideration. All the liabilities arising from the ownership must be endured by the lessor. The period of lease must be determined in clear terms and the asset must be clearly identified as between the parties. 37 The lessee is liable to compensate the lessor for all the damage(s) caused to the leased asset by any misuse or negligence on his part.The rental should be determined at the time of the contract for the whole duration of the lease. The lessor cannot increase the rental unilaterally, and must consult the lessee in that regard. 38 Lease was not originally a mode of financing, however, certain financial institutions have adopted leasing as a mode of finance instead of a long term lending arrangement, which is based on interest. The transaction of ‘fina ncial lease’ may be used for Islamic financing, subject to certain conditions. It does not suffice for the latter purpose to interchange the term ‘interest’ by ‘rent’ and ‘mortgage’ by ‘leased asset’.It must be emphasised that there is a difference between leasing and an interest-bearing loan, as regards Islamic Shariah. 39 Unlike the contract of sale, an Ijaraha agreement can be based on a future date, thus it is different from a Murabaha agreement in that respect. In majority of the cases concerning ‘financial lease’, the lessor (financial institution) will purchase the asset through the lessee himself. The lessee makes the purchase on behalf of the lessor who then pays the price to the supplier, either directly or through the lessee. 0 The lessor, being the owner of the asset, and having purchased it through his agent (lessee), is liable to bear all the expenses incurred in the process of its purchase and its import to the country of the lessor (if that is the circumstance), e. g. expenses of freight and customs duty etc. 41 36 Ibid at 21, pages 102-103 (Bai’ Muajjal). Ibid at 21, pages 158-160. 38 Ibid at 11, pages 148-149. 39 Ibid at 11, page 149 (Lease as a Mode of Finance). 40 Ibid at 11, page 150 (The Commencement of Lease). 41 Ibid at 11, page 152, para 3 (Expenses Consequent to Ownership). 37 19 Variable Rentals in Long Term Leases:Several Islamic banks use the rate of interest as a benchmark to calculate the rental amounts, e. g. London Interbank Offered Rates (LIBOR), which is the rate of interest at which Conventional banks borrow funds from other banks, in marketable size, in the London interbank market. The idea is to earn the same amount of profit through the mode of leasing, as earned by the Conventional banks by advancing loans on interest. Instead of fixing a definite amount of rental, the Islamic banks calculate the cost of purchasing the asset that is to be leas ed and intend to earn an amount equal to the rate of interest.Thus, the agreement between the parties provides that the rental will be equal to the rate of interest or to the rate of interest in addition to something. Since the rate of interest is variable, it cannot be set for the whole duration of the lease. The latter arrangement has been objected to on the following two grounds:42 (a) By subjecting the rental payments to the rate of interest , the transaction is made to resemble an interest-based financing. The modern Islamic scholars have denied that argument and have stressed that the rate of interest is only used as a benchmark.As far as the requirements of Shariah are concerned, they must be fulfilled for a valid lease to be executed, and it is the latter that counts, as regards the legality of the Islamic financial lease. The vital difference between an interest-based financing and a valid Islamic lease does not lie in the amount that has to be paid to the financier or the lessor. However, it is recommended that the use of rate of interest as a benchmark must be avoided at times, where possible, so as to distinguish it with the non-Islamic transaction. 3 (b) The second criticism relates to the situation that the variations of the rate of interest are not determined and the tying up of rental with that rate of interest implies Jahalah and Gharar (uncertainty, especially in a contract that may lead to disputes later on), which are not permissible by Shariah precepts. It is one of the basic tenets of Islamic Shariah that the parties must be well aware of the consideration in every transaction they enter into.This objection has been responded by looking at the reasons of prohibition for Jahalah, namely that Jahalah may lead to disputes between the parties and it might render the parties susceptible to an unforeseen loss. As regards the first objection, both parties make their decisions with mutual consent upon a welldefined benchmark serving as a criterio n for determining rent, thus no question of dispute arises. Relating to the second objection, several contemporary scholars suggest that the relation between rent and the rate of interest is subjected to a limit.E. g. the base contract may provide that the rental amount given after a specified period will be altered according to the change in the rate of interest, but in no instance, it will be higher than 15% or lower than 5 % of the previous monthly rent. The latter implies that if the increase in the rate of interest is more than 15%, the rent will be increased only up to 15%, and if it decreases by more than 5%, the rent shall not be decreased to more than 5%. 44 42 Ibid at 11, page 154 para 1. Ibid at 11, page 155. 44 Ibid at 11, pages 155 & 156. 43 20 F.Ijaraha Wa Iqtina It is permissible in Islamic Shariah that instead of there being a sale, that the lessor signs a separate agreement, making a promise to gift the leased asset to the lessee at the end of the lease period, on c ondition that the lessee makes all the payments due for his/her rent. The latter arrangement is known as Ijaraha Wa Iqtina. It has been affirmed by a large number of contemporary Islamic scholars and is widely practised by the Islamic banks and financial institutions. Although, the validity of this arrangement is subject to two conditions.They are: (a) The agreement of Ijaraha itself should not be subjected to signing of sale or gift. The promise should be made in a separate document. (b) The promise must be unilateral and binding on the promisor only. If the leased asset is used by numerous users, the lessee cannot sub-let the asset, except with the express permission of the lessor. The lessor can sell the leased property to a third party, whereby the lessor is replaced by the new owner, and the lease agreement would then be between the new owner and the lessee. 5 This form of financial leasing has been subjected to criticism as it is not compatible with the modern financing agreem ents, as a non-binding promise cannot be enforced before courts and is thus not a legally satisfactory solution. In an attempt to reconcile Ijaraha Wa Iqtina with the modern financial structure, it is suggested that the lessor’s failure to honour his non-binding promise should be subjected to a pre-contractual liability, or culpa in contrahendo.In civil law jurisdictions, this concept of pre-contractual liability contemplates that the contracting parties will conduct their pre-contractual dealings in good faith and also points to any relevant facts, which are within the commercially usual limits, to the other party. If a party is unsuccessful in carrying out its duties, and thus in breach of contract, then it will have to pay the damages to the other party for not fulfilling the agreement. By adopting this suggestion, the promisor in breach, is made liable for the promisee’s costs, in finding another similar object to purchase. 6 G. Salam This mode of financing can be used by modern banks and financial institutions, especially in order to finance the agricultural sector. In Salam, the seller undertakes to supply specific goods to the buyer at a future date, in exchange of an advanced price fully paid at the spot. The payment is made in cash, and the supply of purchased goods is deferred. 45 Ibid at 11, pages 161-162 (Ijaraha Wa Iqtina). Construction and Lease Financing in Islamic Project Finance by Klarmann, J. I. B. L. R, page 65 (Lease Financing: Ijaraha Wa Iqtina). 6 21 Purpose of Salam Contracts: The purpose is to meet the need of farmers, who operate on a small scale, and thus need the finance for farming purposes, so that they can carry out their day-to-day activities. Moreover, it is designed to assist the traders, in their export/import transactions. Salam proves beneficial to the seller, as he receives the price in advance, and at the same time, advantageous to the buyer, as the price under the Salam arrangement is normally lower than th e price in spot sales. 7 The permissibility of Salam is seen as an exception to the general rule that prohibits forward sale and thus it is subject to certain stringent conditions, which are as follows: Conditions of Salam: 1. The buyer must pay the full price to the seller at the time of effecting the sale. The basic idea behind the Salam agreement, is to satisfy the ‘instant need’ of the seller. If it is not paid in full, the latter purpose is not achieved. 2. The quantity and the quality of the goods must be specified. 3. Salam cannot be effected on a particular commodity or on a roduct of a particular field or farm. 4. The contract must expressly state the quality of goods, thus leaving no room for ambiguities, which might lead to disputes later on. Same is the case as regards the quantity; it must be agreed upon in absolute terms. 5. The exact date and place of the delivery must be specified. 6. Salam cannot be effected in respect of things, which require them to b e delivered at the spot. 7. Since the price in Salam agreements is generally lower than the price in spot sales, the difference between the two prices may be a valid profit for the bank. . A security in the form of a guarantee, mortgage or hypothecation may be required in order to ensure the delivery from the seller. 9. The seller must deliver to the buyer, the commodity, and not the money at the time of the delivery. 48 H. Istisna’ Istisna’ is a sale transaction whereby a commodity is transacted before it comes into existence. It is an order for a manufacturer to manufacture a certain kind of commodity, to be used by the purchaser. The manufacturer uses his own material to 47 48 Ibid at 11, page 133 (Purpose of Use).Ibid at 11, pages 134-135 (Conditions of Salam). 22 manufacture the required goods. The price must be fixed with consent of all the parties involved. All other vital specifications of the commodity must also be fully settled. Subject to the acknowledgment or receipt of prior notice, either party can cancel the contract before the manufacturing party has begun the work. The time of delivery need not be fixed, however a time limit may be imposed as between the parties. 49 I. Istijrar Istijrar means purchasing the goods from time to time, in different quantities.It is an agreement, whereby the purchaser buys something at regular intervals, without any formal offer or acceptance mode or bargaining. There exists one master agreement, which contains all the terms and conditions of the purchases in a finalised form. There are two kinds of Istijrar: (a) where the price is determined after all the transactions/purchases are completed; (b) where the price is determined in advance, but the purchase payment is made from time to time. As regards the Islamic mode of financing, only (a) is relevant. Istijrar can be adopted as a viable mechanism, in the case of suppliers of the borrower.In the latter case, the bank enters into a Murabaha agreement ( Agreement to Purchase) with the suppliers (mainly trading companies), that it will purchase the assets from them at a market price or at a pre-determined discount from the market price. Whenever the customers demand, the bank can purchase that particular asset from the suppliers on the basis of Istijrar, and sell it onwards to the customer, on the basis of Murabaha. 50 49 50 Ibid at 11, pages 139-142. Ibid at 11, page 143-145 (Istijrar). 23 Chapter 3 Application of the Islamic Modes of Finance: A Research on Islamic Project Finance A. Shariah-Related Documentary and Other IssuesIn recent years, Islamic financial institutions have actively started to structure and participate in transactions, which are associated with long-term trade, as opposed to the short term trade related transactions (e. g. Murabaha). This transition has given rise to a number of important Shariah and documentary issues. The prevalent backdrop is that the Islamic bankers and their advisers now face even more st ringency, regarding the setting up of Shariah-compliant structures that are accepted commercially and are also in conformity with the existing governing law of that particular jurisdiction where they operate. 1 As noted earlier, one of the basic principles of Islamic finance is that at a particular stage in the transaction, the financial institution will be the owner of all or part of the asset that is being financed, and under Shariah precepts, several forms of risk related with being an owner cannot possibly be passed on to the customer or a third party. The latter is the most defining difference between an Islamic financial system and a Conventional one. These additional ownership risks become more serious when the transaction involves complex capital assets, e. . a power plant or an aircraft, as the potential exposure faced by the Islamic financier as an owner can be very critical and significant. It is expected that since the Islamic financial institutions are willing to take g reater risks as compared to their Conventional counterparts, this should result in greater rewards for the former. It is submitted by the academics that this is not necessarily the case. 52 In several countries, e. g. the idea of interest is sanctioned by an Act of Parliament, and the latter being affirmed by the courts.Having said that, it is imperative to notice that laws of several states are embedded in Shariah law and concepts, if not in whole then in part. It is observed that a proposed Islamic structure that has the approval of a Shariah board must be examined against the local statutes of that particular state to check whether the structure raises any adverse issues under those laws, and if so, then the proposed structure will surely need amendment and another approval from the Shariah Board.For example, under the Shariah precepts, a transfer of an interest in real estate is effective upon an agreement, signed between the buyer and seller. However, such an agreement may not be recognised by the local laws (at least as regards the bona fide third parties) until and unless the transfer is recorded in the concerned land registry. Sometimes, the problem might be such that a person to whom a real estate interest has been validly transferred under Shariah principles, would not necessarily be recognised as the legal owner under the local municipal 51 2 Ibid at 14, page 317. Ibid at 39, page 317 (Risk Reward Issues). 24 laws. In such situations, the legal and financial consultants, giving their expert advice on such structures, are required to strike a balance, so that the Shariah conditions and requirements are satisfied and are also accepted and applicable under the governing law. 53 There are certain issues relating to the nature of Islamic financing that come up too often and thus need to be discussed. Some of these are discussed below but the list is not intended to be exhaustive. Indemnities:The Shariah principle governing the operation and conditions of Islamic financing expressly prohibits indemnity for a loss or damage that is not caused by the customer’s default. Shariah sees the whole idea of seeking indemnity from the customer as unfair, notwithstanding the fact that the particular asset may have been chosen by the customer. Matters relating to the title to the asset, its fitness for its intended purpose and taxes that are imposed on ownership raise some serious and significant credit issues when one is dealing with a major capital asset, e. . aircraft or a vessel. Having said that, there must be some alternate basis for an Islamic financier to claim indemnity. Suggestions have been forthcoming in the form of seeking indemnities based on the concept of public need or necessity or by other methods, to cover the risks. E. g. such methods could include obtaining the benefit of warranties from the supplier or the manufacturer of the asset and assurances that the asset(s) are in perfect condition and have been validly perfe cted for the intended use.The financial position of the assignor (and any available insurance protection relating to the assignor) would also have to be assessed. 54 In contrast, in the case of Conventional financing, the customer often provides wideranging indemnities in order to protect the bank from any risks related with the ownership or use of the asset. The banks are not concerned with the issue of fault and are more keen to ensure that they are insulated from credit risks, arising from the ownership, use or operation of the asset. 55Warranties: As the owner of the asset, the Islamic financier may not be able to exclude the benefit of some warranties to its customer under the Shariah principles. In few instances, the Islamic financier has the benefit of the warranty from a third party that can be assigned to the customer (i. e. from a manufacturer). It has been permitted that the Islamic financier could expressly exclude any warranty from the Islamic financial institution in t he customer’s favour to the extent that it is covered by the assigned warranty.This does not seem to be an adequate solution in that it is often impossible to describe with accuracy the extent of the warranty being assigned. Inevitably, some of the warranties may not be covered by a third party assignment and thus the Islamic financier will still be providing the benefit of some warranties to the customer. In a Ijaraha (leasing) transaction the balance of such warranties, which cannot be excluded under Islamic principles may possibly be covered by insurance. 3 Ibid at 39, page 318, para 2 & 3. Ibid at 39, page 319 (Indemnities). 55 Ibid at 39, page 319. 54 25 Thus, if warranties will raise Shariah related issues, the Islamic financier must immediately try to identify those residuary warranties that cannot be covered to decide whether or not this renders the transaction commercially unacceptable, particularly, if its financial return will not reflect these additional risks. 56 Compensation and Liquidated damages:In Conventional financing, if the borrower defaults on any payment due on him, default interest is charged as against him, thus compensating the banks. This approach is unacceptable as regards Islamic financing, due to the obvious reason of any such compensation/liquidated damages tantamount to charging interest. Unfortunately, the experience of Islamic financiers in trusting their customers, that they would pay on time, has not really been successful, and there is a general agreement that there must be some form of penalty if a customer does not pay on time.The Islamic financier can only claim compensation if it suffers loss or damage due to the true fault of the customer. The compensation must reflect the actual loss of the financier. Most Islamic financings have a compensation provision dealing with failure to pay on a due date and which uses a benchmark linked to LIBOR, as discussed above. The entire purpose of such provisions is not to compe nsate the financier, but to treat it as an incentive to the customer to make payments by the due date. 57 Events of default:In a Conventional financing, there will be a progression of events of default, which will give rise to rights in the favour of the banks, and in particular, the right to demand the repayment of outstanding debts. As a general principle, the latter view is accepted by the Shariah law, as long as the customer is at fault. In a Conventional financing, there will be events of default that are not within the customer’s control. It is considered as unviable to include such events of default in an Islamic financing, and each event must be diligently drafted to take account of the latter. 8 This, however, raises credit risks, which if not compensated for by the customer in the form of an increased return to the Islamic financier, may force the latter to take on extra risk, which will be without any reward. This issue becomes even more vital in the case of a co-f inancing that involves both Islamic and Conventional financing. The Conventional banks will surely not like the idea of Islamic facility not going into default at the same time as them, and this could possibly have adverse effects on the security sharing under inter-creditor arrangements.It has been argued that in these circumstances the Conventional banks should accept the position of Islamic financiers, however, the prevailing position is that the Conventional financing is the controlling financial force in the world and thus it is often arduous for Islamic financial institutions to have their views stand in a co-financing. Examples of events of default that can potentially cause dispute between Conventional and Islamic financiers would be nationalisation, requisition, loss of air traffic rights and force majeure. If there is disagreement as regards any of the above mentioned events of 56Ibid at 39, page 320, para(s) 2 & 3. Ibid at 39, page 321, para 1. 58 Ibid at 39, page 321, (E vents of Default) para 1. 57 26 default, then it is advised that they must be put into a separate category of events called by some other name, such as events of ‘mandatory prepayment’. 59 If there is an event of default the customer may be obliged to purchase the asset, at a predetermined price. That obligation must not be listed in the same document (i. e. the lease) to avoid concerns regarding conditionality but should be contained in a separate document, e. g. an option or a deed of covenant.If the event of mandatory prepayment arises, the customer will not be in default but the happening of such an event will enable the financier to exercise a right or option granted to it by the customer in a separate document requiring the customer to purchase the asset. The conclusion to this whole procedure being that, on the face of the document, the events of default will be Shariah-compliant and for events of mandatory prepayment, there will be a Shariah-compliant system tha t results in the asset being purchased, thus clearing the amount that the customer owed the Islamic financier. 0 Set-off: It has often been disputed that the grant of set-off rights that are solely in favour of the Islamic financier, is against the Shariah precepts, which require an Islamic finance transaction to be fair and reasonable when taken in the context of the customer. The aforementioned issue has been resolved in various transactions by providing that there are statutory set-off rights that cannot be waived and which keep an acceptable balance as regards favouring the financier and the customer. 61 B. Construction and Lease FinancingSpecific Issues in Relation to Ijaraha (Leasing) Transactions Insurance and Maintenance Obligations: As per the Shariah principles, the lessor must remain liable for several insurance and major maintenance obligations. Obligation and the financial consequences cannot be transferred on to the lessee, pursuant to the terms of the lease. The insur ance obligations relate to the structural or property insurance. However, the lessee can be held responsible and liable for the cost of operational insurance, such as the business interruption insurance and third party insurance (to the extent that it relates to operational risks).The latter mentioned principles can possibly have serious implications for an Islamic financier. The direct costs involved in, e. g. maintaining an aircraft and the indirect costs and liability resulting from the failure to perform such maintenance can prove to be very significant. 62 There must be some mechanism to transfer some risk on to the lessee, or sharing of risk if you like, which, on the face of the document is Shariah-compliant. 59 Ibid at 39, page 321, para 3. Ibid at 39, page 321, para(s) 4 & 5. 61 Ibid at 39, page 321, (Set-off), para 1. 62Ibid at 39, page 322, (Insurance and Maintenance Obligations). 60 27 The most obvious approach is to appoint the lessee as the ‘service agent’ of the lessor (Islamic financier) in order to perform these activities, which would include paying the insurance premiums and the maintenance costs. The service agency agreement must specify that the service agent will indemnify the lessor for any default on his part, in the performance of these obligations. However, on the basis of general precepts, an agent must be compensated for any costs properly incurred on behalf of its principal.Usually, a nominal fee is paid to the se