ISTANBUL, Turkey, Sept. 28--Islamic finance is progressively moving closer to conventional banking products to meet investor demand, a US-based expert said Tuesday, but Muslim scholars argue that the system is actually becoming more innovative, AFP reported.
"I think that the (recent) mode of operation of Islamic finance has been to mimic conventional financial products, and to get progressively closer to the conventional products," said Mahmoud al-Gamal of Rice University in Texas.
"It started with pure (no-interest) profit-sharing, then they introduced Murabaha (forward-dated sales)" and later other products, said Gamal, who was recently appointed the first scholar-in-residence on Islamic finance by the US Treasury Department.
"Clearly, the idea is to try to get as close as possible to offering Islamized versions of conventional financial products," he told AFP in Istanbul.
But Muslim scholars taking part in the September 27-29 International Islamic Finance Forum here argued that the gap between Islamic finance and conventional banking is still wide.
"It is inaccurate to say the gap is narrowing. There is a big difference between Islamic and conventional banks in regards to legal, practical and accounting aspects," Sheikh Nizam Yacouby told AFP.
"Yes, there could be similarities in activities but they are not identical," said Yacouby, who sits on the Sharia (Islamic jurisprudence) boards of several Islamic banks and institutions.
Islamic finance is based on the main concept of outlawing fixed-interest returns and speculation, and forbidding investments in what Islam considers vices such as dealing in alcohol, pork or gambling.
Under Islamic finance, there are no fixed-interest deposit accounts but investment accounts based on profit-and-loss-sharing.
Islamic banks do not provide direct consumer loans to customers, but adopt small-scale Murabaha to buy items like cars, furniture and houses in installments, and Tawarruq (securitization) for large-scale finances.
To cope with ever-increasing demands for large-scale investments, Islamic financial institutions have introduced Sukuk, the Sharia-compliant Islamic bonds which do not have a fixed yield.
The Islamic financial industry, which began three decades ago, has made substantial growth that attracted continuous attention from investors and bankers.
Growing at an estimated 15 percent annually, the Islamic finance market is currently estimated to be worth more than $300 billion with more than 200 Islamic finance institutions operating.
Hundreds of conventional banks and investment companies, some Western, have established special units to deal in products compliant with the Islamic laws of Sharia.

SINGAPORE,
Sept. 28--Asian telecom executives on Tuesday called on the world's mobile phone makers to manufacture cheaper, less fancy handsets in order to realize the full potential of the region's mass market, Reuters reported.
Amid the hype over high-speed third generation (3G) mobile services, Asia remains a huge market for low-cost "dumb phones" capable only of voice and text, the 3GSM World Congress of the telecommunications industry heard.
Lim Chuan Poh, chief executive of SingTel Mobile, the mobile arm of Singapore Telecommunications Ltd., said there was no doubt of the need to serve the high-end market of frequent travelers and heavy users.
However, large parts of Asia remain under-served or even unserved largely because people cannot afford to own a handphone, which often costs several times their monthly earnings.
"To realize this untapped potential, there is a need for us to put the emphasis on developing low-cost technology for Asian markets, not just networks but also handsets," Lim said. "It is not unusual for us to find people in Asia living in the shadow of base stations and yet unable to access mobile services because the barrier of entry is too high."
Lim noted a "general reluctance" to manufacture cheaper mobile phones. "It is in the interest of all parties, especially for this under-served segment in Asia that we put some focus on this issue.
"If we believe that access to basic communications is a foundation that brings about economic well-being and growth, then it is also our duty as good corporate citizens to bring mobile communications to the masses and to help narrow the current disparity that exists in our society."
Lim said Asia is a "highly fragmented market" with wide disparaties in economic development. Mobile phone penetration rates vary from as low as only two percent to near 100 percent in the case of Taiwan.
In Asia, only Japan, South Korea, Australia and Hong Kong have launched commercial 3G mobile services, which allow users to surf the net, watch movies, download music while on the move. Singapore is to launch the service early next year.
For their part, chief executives of mobile phone operators in the Philippines and India said their business strategy was focused more on providing the basics --voice and text messaging services.

LAGOS, Nigeria, Sept. 28--Oil majors in Nigeria said Tuesday they were undeterred by the threat of an armed group fighting government troops in the Niger Delta to attack oil facilities and personnel, AFP reported.
The Niger Delta People's Volunteer Force, led by Mujahid Dokubo-Asari, said in a statement late Monday it would launch an "all-time war against Nigeria" from October 1 and advised all oil majors to leave the delta, which pumps all of Nigeria's 2.3 million barrels per day production.
The group's leader accused Royal Dutch Shell, Nigeria's largest oil producer, and Italy's Agip, a unit of ENI, of "collaboration with the Nigerian state in acts of genocide against our people."
"We are not in any way moved by the threat. We believe the Nigerian security forces are equal to the task of safeguarding oil installations and protecting workers," said Don Boham, a Shell spokesman.
He said the company has already taken precautionary measures against the threat.
Last week, Shell evacuated some 200 non-essential workers from an oil facility near Port Harcourt, the flashpoint of recent unrest and the hub of Nigeria's oil production and exports.

KarstadtQuelle was penciling in an operating loss of up to 1.34 billion euros for the current year.

ESSEN, Germany, Sept. 28--KarstadtQuelle, Europe's leading department store operator, said it planned to sell "as quickly as possible" 77 of its 181 department stores around the country as part of a massive restructuring program aimed at pulling it out of its current financial crisis, AFP reported.
KarstadtQuelle would initially spin off the 77 stores into a separate unit before selling them, it said.
The stores concerned all had sales floorspace of less than 8,000 square meters.
At the same time, the group said it would not pay shareholders any dividend for either this year or next year.
For 2004, KarstadtQuelle was penciling in an operating loss of up to 1.34 billion euros ($1.6 billion). But it hoped to return to operating profit of 110 million euros in 2005, it added.
Despite the massive reorganization, KarstadtQuelle said it had no plans to sell its 50-percent stake in tourism giant Thomas Cook.
Earlier, the group had said it had finally found a new finance director after a year-long search.
Harald Pinger, 44, formerly chief financial officer at the industrial gases group Messer Griesheim, would take the financial reins at KarstadtQuelle from October 1, the group announced.
The post has been vacant since former CFO Norbert Nelles quit a year ago.
Another part of the extensive restructuring program that would lead to an estimated 1.4 billion euros in one-off charges his year was a 500-million-euro capital increase that would help strengthen its capital base and further cut its net financial debt.

NEW YORK, USA, Sept. 28--Investigators are closely scrutinizing the role of major international banks in the meltdown of Parmalat, the scandal-ridden dairy group based in Italy, the Wall Street Journal reported on Tuesday, Reuters said.
In particular, the article said prosecutors and investigators are looking at the roles played by Citigroup, Bank of America N> , and the Credit Suisse First Boston unit of Credit Suisse Group AG.
Parmalat announced in December that it was insolvent, and was forced to seek bankruptcy protection in one of Europe's largest ever corporate scandals.
The scale of the firm's collapse--under about 14 billion euros ($17 billion) in debt--has touched off a wave of lawsuits against six financial institutions by the company's administrators.
Parmalat's new managers and a report prepared for prosecutors by an independent consultant contend that a Canadian deal and several other transactions were designed to burnish Parmalat's financial profile, the Journal said, citing an internal report and some of the lawsuits filed.
The deals allowed the company's alleged fraud to go undetected for years, to the detriment of investors, it said.
The newspaper obtained a copy of the report, which stated that Citigroup obliged Parmalat to buy back the bank's stake in the dairy group's Canadian unit. But instead of counting the deal as a debt, the report says it was improperly classified as a loan, the Journal reported.
Since its collapse, Parmalat has sued Citigroup for $10 billion, as well as auditors Deloitte Touche and Grant Thornton. It has also stated its intention to bring suit against Bank of America.
Bank of America said it did not believe there were grounds for action against it, the newspaper said. Citigroup said the lawsuit had no merit. CSFB said a Brazilian deal cited by the newspaper involved internationally recognized financing arrangements.

TUNIS, Tunisia, Sept. 28--A Mediterranean Center for Renewable Energy (MEDREC) was officially opened Monday by representatives from Tunisia and Italy, whose governments cooperated to bring the project to life, AFP reported.
The center, which will support pilot projects in renewable sources of energy such as wind and sunlight, will serve the entire Mediterranean basin region including Algeria, Egypt, Libya, Morocco and Tunisia.
Corrado Clini, general director for the Italian environment ministry, said that the center would help "meet the objective set by the 2002 Johannesburg world summit on sustainable development to permit 100 million people to benefit from renewable energy sources in the coming years."
According to the United Nations Environment Program (UNEP), one of the center's first projects will be the donation of 30,000 solar domestic water heaters to Tunisian homes during the next three years.
Families will be given credits to obtain the solar heaters. The center will benefit from partnerships coming from the public and private sectors.
Such partners include the International Energy Agency (AIE) and the Tunisian electricity and gas company.

KINSHASA, Democratic Republic of Congo, Sept. 28--Rampant corruption and smuggling in Congo means the impoverished country loses millions of dollars in revenues from copper and cobalt mining each month, a natural resource watchdog said on Tuesday, Reuters reported.
In a report on mining in Democratic Republic of Congo's southern province of Katanga, Global Witness said that during a boom in the price of cobalt, neither the country's economy nor the local population was benefiting.
"Ongoing corruption and smuggling in Southern DRC are leading to the loss of millions of dollars in revenue every month for the country," it said in a statement.
"DRC is missing a crucial opportunity to benefit from the current boom in world cobalt prices, as so much of its ore is being smuggled out of the country and the vast majority is leaving unprocessed," the report concluded.
Cobalt prices have tripled since May 2003 and now stand at a record $55,100 per ton, largely driven by China's massive demand for the metal for use in mobile phone batteries.
The watchdog said official figures showed China imported 10,707 tons of cobalt concentrate from Congo in March 2004, but the African country's central bank recorded cobalt production of just 783 tons.
Customs records showed the central African country had exported 13,365 tons of cobalt metal during the month, but Global Witness said the majority of the minerals left Katanga in their raw form.
"This discrepancy raises serious questions about where mining revenues are going and how trade and production is being recorded," Global Witness said.
"(Customs officers) are currently colluding with companies to allow the transport of unprocessed heterogenite (mix of copper and cobalt ore) across the border," it said.
Rather than profiting from its vast mineral wealth, Congo has been torn apart by years of war--often over its natural resources--and the country remains one of the world's poorest.