Saudi money welcome

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Are you a wealthy Saudi looking to invest but worried that most standard bonds don't comply with Islamic law? Pakistan has just the thing for you: The country's central bank recently issued sukuk, or Islamic bonds structured to comply with Islamic restrictions on interest.

Economists say that in addition to responding to demand from pious Muslims, Islamic banks and finance outlets driven by Islamic principles carry the potential of attracting investors from the oil-rich Arab world. In the past few years, oil wealth from the Middle East has prompted demand for Islamic investment opportunities in the Middle East, parts of Africa and in Asia.

It's not just Islamic countries that are structuring financial products for observant investors. Japan's national bank announced plans for a similar instrument last year, and a growing number of Western banks are offering sharia-friendly services. The UK has been particularly aggressive in this area, with a push from London's controversial mayor, "Red" Ken Livingstone, to make the city a powerhouse of Islamic finance on par with Dubai.

Not everyone's a fan, however. The association of Islam with terrorism has prevented the United States from becoming a player in this area. And Arab governments outside the Gulf, such as Egypt's, have been wary of strengthening the financial clout of the Islamist opposition and setting up competition for state-run banks. But the influx of oil money from Saudi Arabia has proven hard to resist.