The rise of Islamic finance: post-colonial market-building in central Asia and Russia

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Non-Chatham House members can subscribe via Wiley-Blackwell. Electronic access to the full text of the article via the source url above is only available if you (or the network by which you access ESO) already subscribes to Wiley-Blackwell and your network uses a link resolver.Islamic finance signifies more than a projection of religious affiliation. The importance of Islamic finance is increasing in central Asia, both as a source of capital and as a form of post-colonial market-building. In central Asia, it is an important facet of the new phenomena of ‘nation-branding’ and a means of reinvigorating the economy. In identity politics, Islamic finance projects an attitude of religious tolerance allowing states in the region to reposition their geopolitical identity relative to the Islamic community. This creates a ‘performance’ of Islamic finance that facilitates the creation of legitimacy for the state.

Adopting Islamic finance projects images of the state's religious tolerance and diversity without changing the underlying structures; it suggests an ‘Islamicness’ that is useful to the development and post-colonial goals of the state. As such, it creates opportunities for geopolitical alliances with Muslim countries. Economically, it appeals to rising financial-industrial elites seeking new investment-opportunities, which reduces pressure on the state to democratize. Meanwhile, in Russia, Islamic finance is an alternative source of capital for the sanctions-hit state and a useful identity marker with which to connect to the increasingly wary Caucuses and Commonwealth of Independent States countries, lending it a wider significance across Eurasia.