Shifting political sands in America and Europe, especially after the 9-11 terror attacks and concerns of a probable slowdown in developed economies are encouraging Islamic investors to turn their focus into growth economies like India and China. Saudi Economic and Development Company (Sedco) and Bearys Group have come together to invest $20 million for the Bearys Global Research Triangle in Bangalore. HSBC Amanah will invest $50 million in Srei Projects while Gulf Finance House will invest $10,000 million for the Indian Economic Zone in Mumbai.
While business is indeed business, one cannot blame a bank or corporation for maximizing stockholder value. The way in which it accomplished, however, should always comply with all laws and regulations. Two arguments are at the center of targeting developing nations. One is that laws and regulations are not as strict and well thought out. Global banks simply move on to more fertile ground. The other argument is that there is a need, thus a market.
Citizens of developing nations, and therefore lawmakers and regulators, are reminded of opportunities in America and Europe that were filled by high interest loans, unchecked home lending, tax refund loans, payday loans, pawn your title loans and other shady tactics. Perhaps one should not cite “shifting political sands” when the actual problem was opportunistic marketers who searched for a way to push laws to the limit. There is nothing to suggest it will not happen again in India and China.