For a man who rose through the notoriously tribal arena of Iraqi politics, Ali Allawi seems strangely unafraid of striking out on his own. The minister for defence and finance in the post-invasion government, Allawi rose to fame in the west with The Occupation of Iraq, a scathing attack on American mismanagement and his cabinet colleagues. Now retired from politics, Allawi's latest provocative j'accuse is directed at the Islamic world. 'Muslims have failed our own civilisation,' he says. In his new book, The Crisis of Islamic Civilization, Allawi argues that the Islamic world is suffering a deficit of influence, wealth and, fundamentally, spirituality. Before the arrival of modernity in the Muslim world, Allawi argues, a global Islamic civilisation was held together by cultures, institutions, economies and governments that 'were basically indigenous and reflected Muslim spiritual experiences'. But in the face of colonialism, modernity and globalisation, Allawi says 'all this collapsed' and Islam 'capitulated to a manifestly stronger and materially superior western civilisation'. In the process, the central place of Islam in society has been subsumed by secular western ideologies and systems of economics, law and culture; its role 'reduced to all but its religious and political expressions'. This fact, Allawi argues, does much to explain not only the obvious decline in Islam's scientific, economic and political fortunes in the past 300 years but a crisis of confidence that lingers in the Muslim consciousness to this day. 'When Muslims deal with the world they deal with something not defined by their inner precepts. Which causes, to my mind, a tension and sense of inadequacy when it comes to dealing with the modern world. It's not that the modern world is of itself antithetical to Islamic values, or precepts.' Allawi, a devout Shia Muslim, has spent most of his life outside the Muslim world. His family left Iraq for Britain in the 1950s. Educated at MIT and Harvard, Allawi enjoyed a successful career in finance before becoming a professor at Oxford University, later returning to Iraq after the fall of Saddam Hussein. Now that his career in politics is over, Allawi has returned to the west, teaching at Princeton. Allawi concedes that some Muslims may see his as an elitist perspective. He says the fault lies with Islamic reformers who have 'conceded the high ground either to the modern or fundamentalist perceptions'. They should have been trying to 'generate in Muslims the imagination and endeavour necessary to create an alternative to the modern experience'. Allawi finds a blueprint for such an alternative in the example of Japan's Meiji restoration, where modernity was made to fit within traditional culture. Allawi believes Islam must renegotiate its relationship with modernity to reflect its core values. His book is thus as much an indictment of the crisis of Islamic civilisation as it is a call for its rejuvenation. Allawi's belief in tradition and modernity leaves him in an unusual place in contemporary debates on political Islam. He scorns the 'archaic tyranny' of Islamic states such as Iran, but is equally critical of Muslim democrats such as Anwar Ibrahim in Malaysia, who broadly promote Islamic values within a secular state. 'I have nothing against saying that these are workable international models. But please do not call them Islamic, because they're not.' Allawi calls for a modernised Koranic political system, one that would express the democratic values of representation and accountability 'in Islamic terms'. Allawi is the first to acknowledge that these arguments seem to run against the political tides in the Muslim world, but his enthusiasm for the ideals behind them remains undiminished: 'The sense that something needs to be done wafts over the Islamic world, but nonetheless there are certain inherited power relationships.' Allawi's calls for reform in economics are equally ambitious. He believes capitalism is antithetical to Muslim values and calls for alternatives such as a pan-Islamic currency or redistributive tax to address the enormous economic disparities between Muslim nations. Is the Muslim world likely to forego development for values? Allawi is typically circumspect: 'It's unlikely that Muslims are going to aspire to a similar marginal standard of living as in the west. The baggage that comes with [capitalism] makes it something that people think twice about aspiring to.' Allawi worked at the epicentre of the western financial system as an investment banker in London during the 1990s. Was the experience spiritually testing? 'Yes,' he says, chuckling. 'The notion of success in Islam is so different. It's about living a life governed by spiritual values, not fame, fortune or power. 'Islam doesn't deny that these exist, nor that these are probably the most important drivers of human action; but it says they are not the ideal drivers. There is a conundrum here.' The Crisis of Islamic Civilization by Ali Allawi, Yale University Press, HK$220