Subjects of Debt: Financial Subjectification and Collaborative Risk in Malaysian Islamic Finance

ABSTRACT This article argues the Malaysian state has developed Islamic finance in conjunction with two distinct strategies of subject formation. In its first phase, in the 1980s, a central objective was the financial inclusion of Malays. Islamic finance was part of an identity‐building project and intended to integrate this disadvantaged indigenous majority into the national economy. By the 2000s the state had succeeded in fostering a Malay Muslim middle class through aggressive affirmative action policies. Currently, Islamic finance is being redeployed as a technique for the neoliberal entrepreneurialization of the Malay Muslim population. Empirically, this shift is evident in efforts by experts to move Islamic finance away from a reliance on what they call “debt‐based” devices to ones referred to as “equity based.” This entails substituting devices that reformers contend replicate the credit and lending instruments characteristic of “conventional finance” with instruments instead premised on investment, partnership, and risk sharing that they argue more faithfully adhere to the discursive tradition of Islam. [ Islam, development, neoliberalism, Islamic finance, debt ]