Iraq, Secured Transactions, and the Promise of Islamic Law
When Iraq regains political stability, major reconstruction projects will have to be funded and local businesses will need financing in order to gain a foothold in the new economy. In order to attract the necessary capital, the Iraqi law of secured transactions must be reformed to allow for lenders to take security in the assets of their borrowers. However, the challenge of reforming Iraqi commercial law is complicated by the requirement under the new Iraqi Constitution that any new statutes enacted by the Iraqi legislature comply with the principles of Islamic law. This Article sets forth proposals for reform that comply with Islamic law and explains how Islamic law, far from being inimical to the needs of international financial institutions, actually allows for each of the essential elements of a progressive law of secured transactions. This amenability of Islamic law to the requirements of the modern international economy holds great promise, not only for Iraq, but for all Islamic states that are seeking to invigorate their economies with the aid of foreign investment.