No room for religion

Let economic logic prevail over Islamic bonds

South Korea is a secular state. The nation’s Constitution espouses the separation of religion and state. This principle of secularism has spared the country conflicts among different religions ― Buddhism, Christianity, Islamism and others.

However, such a tradition is on the verge of collapse as Protestants are trying to block the National Assembly from approving an Islamic bond bill. Giving in to their pressure, the governing Grand National Party (GNP) has decided to stop deliberations on the bill.

Last week, the Christian Church applied more pressure on the government and the legislature, heightening tension over the issue. Rev. Cho Yong-gi, emeritus pastor of the Yeouido Full Gospel Church, has threatened to stage a campaign to force President Lee Myung-bak out of power unless his administration gives up the legislation bid for Islamic bonds.

The move came after Christian groups already threatened to launch a no-vote drive against lawmakers who would press for the bill in the Assembly. It is highly regrettable that the groups have been attempting to intervene in the legislation process. How dare they mix religion with politics?

It is irrelevant for Christian clergy and believers to oppose the bill that is purely for economic and financial purposes, not for any religious cause. They should have refrained from making threats against the President and legislators.

They had better realize that such irrational and reckless action may do more harm than good not only to their own faith but also to the nation. In a nutshell, they have gone too far in expressing their opposition to the bill, even without acceptable reasons. It would be better for them to immediately apologize for their foolhardy behavior.

The row has certainly stemmed from a lack of understanding about Islamic bonds, or “sukuk.” These bonds are structured to comply with Islamic law and its investment principles that prohibit the charging or paying of interest.

The nation has pressed ahead with the bill to give tax benefits to holders of Islamic bonds that provide dividends or lease profits to investors, instead of interest. The Christian groups claim that it is not fair to give tax benefits to a certain religion. They also worry that the bill might help Islam increase its influence on the Korean economy.

But, such worries are groundless because the bill is aimed at attracting more petrodollars from Middle Eastern countries into Korea. It is also part of efforts to diversify the nation’s source of foreign investment to better cope with a sudden outflow of funds in the case of financial turmoil as seen in 1997 and 2008.

Foreigners investing in other debts have long enjoyed tax benefits. Therefore, making such benefits available for sukuk holders does not violate the spirit of equality. Other countries like the United Kingdom, Ireland, France and Singapore currently have a similar law to provide tax exemptions to Islamic bond investors.

Now it’s time to approach the matter with pure economic and financial logic rather than religion. It is farfetched to claim that the bill, if it becomes law, may allow Islamic funds to flow into the hands of terrorists. It is also nonsense to say that such a law could infringe on the nation’s “financial sovereignty.” There is no room for any religion to be against tax benefits for sukuk investors.