PERSPECTIVE ON ISLAM : Why Fear Fundamentalism? : Muslims, disappointed with secular nationalism, seek self-determination through social and religious unity.

Moorhead Kennedy is president of Moorhead Kennedy Associates, Inc., in New York, which trains executives to deal with unfamiliar cultures. A former Foreign Service Arabist, he spent 444 days as a hostage in Iran, 1979-81.

"The West does not want independence based on Islamic thoughts for Islamic countries," Iranian President Hashemi Rafsanjani said recently. "They are confronting an important movement, and they do not like it." Indeed, finding a kind word about Islamic fundamentalism is not easy. An Op-Ed piece in the New York Times characterized this important movement as "rage, religious fury, holy war, and political hypocrisy"--and that was before the explosion at the World Trade Center, attributed to Muslim fundamentalists.

Quite apart from the profound injustice done to millions of law-abiding Muslims, equating Islamic fundamentalism with terrorism closes minds at a time when the American public badly needs to understand this important world movement.

To whatever extent it may ultimately prevail in the vast area stretching from Morocco to Mindanao in the Philippines, and in several former Soviet republics, Islamic fundamentalism is a vital and growing force. It has great appeal for young people, notably Palestinian and Jordanian university students. A version of it is increasingly visible and influential in our own African-American community. In its various manifestations, Islam will become, before long, the second-largest American religious grouping, after Christianity and ahead of Judaism.

Americans will have to come to terms with Islamic fundamentalism. Where should we start?

First, we need to understand that Islam is not only a faith, like Christianity. It is also a political system, a legal system and a way of life. Even the Israelis, normally astute about developments in the Arab world, missed this reality. Even as they closed universities in the occupied territories, they encouraged seminary study, hoping to turn the minds of their subject people away from Arab nationalism toward the peaceful ways of religion.

Instead they got Hamas, championing the liberation of Palestine not for reasons of Arab nationalism, but for Islam. The expulsion of 432 Hamas followers to no-man's-land on the Lebanese border became Israel's most acute diplomatic embarrassment of recent years.

In Hamas, Israel is faced with an uncompromising maximalist approach, that of total liberation of the sacred land of Palestine as demanded by God, who will repay martyrs for this cause with everlasting life. In contrast to a Western-style movement like the Palestine Liberation Organization, which is willing to compromise, Islamic fundamentalism is a formidable opponent. The difference between the PLO's approach and that of the fundamentalists has to do with how each views the West.

Starting from a position, real and perceived, of inferiority, the Middle East has been trying to come to terms with the West. Its coping device was imitation, perhaps most evident in Western-style nationalism and the evolution of national states, complete with ideologies, parliaments, anthems and flags. Imitative Arab nationalism found its culmination in Gamal Abdel Nasser, its low point in Nasser's humiliating defeat by Israel in 1967.

A great many Arabs concluded that they had been following the wrong model. They could never be successful trying to be what they were not. Similarly, in 1979, in Iran, the westernizing Shah was overthrown. "We no longer have to be imitation Americans," the Islamic revolutionaries cried. "We can be ourselves." The basic question, "Who am I?," is answered by many in Muslim countries through a return to their Islamic roots.

Why the deep anger, the rage, directed against the United States? Because our culture, pervasive and appealing, is what the fundamentalists are trying to expel from deep within themselves and their societies. Yet, as they reject our culture, they are forced to recognize its superiority in many important respects. Their continuing dependence on it deepens their anger. They rail against our culture's recreational sex, widespread alcoholism and drug abuse as "Western decadence"; by contrast, they hold themselves to be freshly inspired to decency.

Islamic fundamentalism has its own very positive side. Its medical clinics in the poorest parts of Cairo, for example, evidencing in a practical way the duty of Muslims to care for the poor, are a source of popularity and respect.

Islamic law, the Sharia, or "path to salvation," is the sum of duties required by God of human beings, with respect not only to God, but also to one's fellows. It is the infusion of divine purpose into human relationships that distinguishes Islamic law from the secular jurisprudence of Western countries. The restoration of the Sharia as the operating national legal code is a cardinal feature of Islamic fundamentalism.

At Harvard Law School, I analyzed the differences between the Islamic law of inheritance and that of Massachusetts. Islamic law struck me as far more humane, for example in its recognition of family relationships and its provisions for aging parents.

With its main tenets fixed in the 10th Century, the Sharia is inadequate for many of the needs of modern society. As a social statement of ethical principle, however, the Sharia is hard to surpass.

How, then, can the United States come to terms with this vital and important movement? Let me suggest four initial steps:

* Work hard on the flash points. For example, the longer the Arab-Israeli peace process is delayed, the stronger will be the influence of the extremists. Future flash points should be identified and worked on; don't overlook the largely Muslim former Soviet republics.

* Understand motives. The key to the battle against terrorism is understanding. Unless we understand the reasons for anger against the United States on the part of an extremist fringe, we cannot effectively anticipate and counter the actions they are likely to take. Failure in this battle extends beyond the loss of life and property; it also poisons the domestic atmosphere with heightened discrimination and threats against the rights of a significant minority.

* Set a better example. The more uncaring and corrupt our own society, including the political process, appears to be, the more we strengthen that side of Islamic fundamentalism that most resents us. Domestic reforms make effective propaganda abroad.

* Take it seriously. Evidence greater understanding and sympathy for fundamentalism's more praiseworthy goals. Identify what unites our better sides.

Upon my return from hostage captivity in Iran, a senior State Department official remarked, "Who would ever have thought that all this could have happened because of religion?" The same disdainful attitude continues to prevail in Washington. Has anyone there thought to publish a comparison between the better goals of the Islamic fundamentalists and those expressed in President Clinton's inaugural speech?

Rafsanjani is calling upon the West to grow up, to stop being afraid of what we are unwilling to understand, to accord to others rights that we claim for ourselves and our allies and to have the courage to make common cause even with those whose means appear unfamiliar, bizarre or even (possibly) dangerous.

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