Shari'ah economics

Shari’ah Frameworks of Economics

By: Prof. Dr. Mohd. Ma’sum Billah masum2001@yahoo.com applied-islamicfinance@yahoo.com

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Introduction

In a world where conventional economics system are outperforming and leading almost the entire world economy, misunderstandings, poverty and inequality among people are being widespread. The dream about improvement of human conditions is being utopia in a planet where the poor is getting poorer and the rich richer. Indeed there is no perfection in a man made system who is himself imperfect and weak. As a Muslim students doing business we believe that everything in this world including economics system are under the command of the almighty Allah SWT the sustainer and master of this universe.

Hence actions taken by humans being specially economist for this matter must comply with the Islamic laws provided in the book of God the Qur’aan.

Therefore if one needs success in this world as well as in the hereafter he must act in such a way that Allah wants him to act or behave. More or less, preeminent Muslim scholars have engaged outstanding efforts and contributions in explaining the economics systems issues. In this paper, shariah framework of economics, we will emphasize on the importance of the concept of shariah itself and how it applies to issues related to economics. We will try to highlight questions pertinent to the use of the divine laws to bring common, comprehensive and clear understating of the subject matter for instance the economics.

Overview

The Quran imposes upon its followers a universal obligation to serve humanity. Muslims have been asked in the Holy Quran to strive continuously to establish and disseminate a system of sustenance which guarantees peace, growth and development of the entire mankind based on truth and transparent economics. Islam encourages trade and business and the concept of the economic system is strongly related to the system of “Ibadat” [worshiping] therefore it has to be implemented and coordinated based on certain rules and framework prescribed by the shariah.

From an Islamic point of view doing business whether selling or buying is fully allowed provided that it takes place in such a manner that is not causing harm to the entire society. Hence any form of economics which goes against the Sunna of Allah is forbidden and prohibited. However if Economics system is considered as part of the main objective of human being on the hearth for instance “Ibadat” it plays a very important role in our daily life. As stated in the holly Qur’an Muslim should therefore strive in implementing a just and fair economics system which is the image or the implementation of the basic ground rules from Allah Swt.

Nevertheless in the Muslim world who has been following the rules and regulations of the secular system because of lack of knowledge and creativeness the future is more promising.

With the emergence of a new generation both mastering the conventional system as well as the revealed knowledge there is hope and bright to come. For instance the idea of the Gold Dinar, the Islamic banking system and the Islamic insurance or takhaful and many more, the glory of the Islamic civilization seems to be revived.

What is shariah (divine law) Shariah is the body of religious law governing the believers of the religion of Islam. The concept of Sharia covers not only religious rituals and the administration of the faith but also every aspect of the day-to day life.Muslim therefore regardless of there races,colours,geograpical location must implement shariah and use it as a reference. The followers of the religion of Islam believe that when the Almighty created this world and its compenents he has provided guidelines and rules in how man should live ,behave and use it ,shariah is therefore this guidelines or ground rules emaning from Allah Swt.

People often ask specially the non Muslim about the soucres of this law governing the every sigle aspects of the mulims socities(social,economics ,political and so forth). The authority of the shariah comes from two major definite sources namely: ➢ The qur’aan ,the holly book which is Allah is word ➢ The sunnah or the saying and actions of the prophet Mohamed the last messenger of Allah peace be upon him.

The qur’an which is the primary source of Muslims is a revealed book from Allah Swt in which every matter in this world is well explained and developed. Another major source of the Shariah law is the sunnah of the prophet Mohamed (Saw) the last messenger of Allah appointed to convey the religion of Islam to mankind. The later sources is mainly the sayings ,actions and interactions of the prophet saw . Shariah is therefore a reference of the circumstances in which the prophet dealt with.

Shariah and the use of resources distribution.

The concept of scarcity brought about by the conventional systems of economics and defining Economics as the process of managing the scarce or limited resources to satisfy the unlimited wants of human being is not accepted is Islam. From the shariah point of view which is well stated in the qur’an,Allah the Master of this universe has provided enough resources on this hearth for mankind. Therefore there is no scarcity in Islam in terms of resources availability and The resources available on earth are sufficient to secure the basic needs (food, clothing, and shelter) of fifty billion human beings.

However Islam uniquely considers distribution the main problem of the economics system. The very basic concern of the Islamic economics system is to make sure that resources used are not Haram or gained in a Haram way.

Therefore trade involving prohibited goods such as wine, swine, pork and alike is not accepted. Besides this, it is forbidden by the shariah law to gain property or wealth by fraud, deceit, theft, or other falsehoods because such acts will cause harm to the whole society and therefore create anxiety and quarrel among them. Indeed there is wisdom behind the prohibition of such acts by the Almighty because only Allah knows what is good and better. Islam highlights also how the resources in a Muslim society ought to be distributed.

It is of ultimate importance to underline that Islam or the shariah itself encourages a moderate society where there is harmony and care. It rejects the unequal distribution of resources and opts for a system which is Waasad or moderate. The concept of Zakat is therefore a must for every Muslim to implement. Zakat one of the five pillars that encompass Islam as a religion therefore one has to give donation (zakat) to the needy people and the objective is to bring balance and eliminate inequality among the members of a society.

Unlike the conventional system where there are extremes while talking about resources distribution shariah or the divine law coordinates and makes it clear it is unlawful to hoard food and other basic necessities. Everyone should take what they need and no more. The concept of Israf or the use of resources without measure or wasting is prohibited but being so greedy is also forbidden.

A number of Ayat or verses of the Holly Quran emphasize more in details how resources and its distribution should be implemented here some of them.

“And withhold not things justly due to men, nor do evil in the land, working mischief”. (Shu'araa:183) [pic] “Give just measure, and cause no loss (to others by fraud).” (Shu'araa:181) [pic] “O ye who believe! Eat not up your property among yourselves in vanities: but let there be amongst you traffic and trade by mutual good-will: nor kill (or destroy) yourselves: for verily Allah hath been to you Most Merciful!” (An-Nisaa: 29) [pic]

“So establish weight with justice and fall not short in the balance.” (Ar- Rahman: 9) [pic] According to the above verses of the Holly Quran it is quiet clear that the shariah law provides the core or the framework in which all economics activities must operate and gives at the same time guidelines on how it should be conducted so that every one in the society be satisfied and respected.

Shariah and the Riba (usury) practices in economics

Another very important issue which affects the economics system is the concept and practices of Riba or usury in business transactions. From an Islamic perspective it is forbidden by the shariah law and the practice of Usury is unanimously condemned by the Quran as well as the hadiths of the prophet saw. Following are some verses denouncing the use of Riba. [pic] “Those who devour usury will not stand except as stands one whom the Evil One by his touch hath driven to madness. That is because they say: "Trade is like usury," but Allah hath permitted trade and forbidden usury.

Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for Allah (to judge); but those who repeat (the offence) are Companions of the Fire; they will abide therein (forever). (Al- Baqarah: 275). The concept of riba affects not only the society’s economics system but also creates inequality among people vis-à-vis the purchasing power and therefore cause anxiety. The Islamic economics system defined as being the knowledge and the application of the injunctions and the rules of the Shariah in regard to acquisition and disposal of the available resources for providing satisfaction to the individuals in order to enable them to perform their obligations to Allah' and the society gives no ways for usury or Riba..

Shariah prohibition in investment of unlawful food and drinks

In general, the numbers of food items that are prohibited for Islamic Funds investors to invest in are very small indeed. The Muslims are forbidden to eat items like pork and dead meat so investing in industries developing this type of food would be against their principles. Its followers like to think it is a test to see who holds fast to these injunctions not unlike Adam and Eve who were forbidden to approach only one tree while they were residing in heaven. Muslims' abstention from pork eating is in adherence to the Qur'anic Law which states.

“Forbidden to you for food are; dead meat, blood and the flesh of the swine and that which hath been invoked the name other than Allah.” “Holy Qur'an 5:4” There are numerous other items that could be consumed and therefore encouraged to be developed in the Islamic community. Islamic Funds’ investors take a lot of consideration when investing in the food industry, and they refer all their decisions to the Holy Qur’an for guidance. All the criteria of halal food and drinks are justly written down and bounds Muslims to just which food industry can be developed and what are not.

“Let him find out which is the best food (to be had). Eat of the best foods We have provided for you.” “Holy Qur'an 18:19; 7:160” The reason as to why Muslims are bound to laws and regulations about food is because Islam has laid down the foundation for the best approach in keeping good health. In the Holy Qur'an God exhorts the believers to select the best food and to stay away from any harmful food to maintain good health:

Secondly, the Holy Qur’an clearly enjoins us to consume lawful food items only. In other words, this Qur’anic injunction implies that what is lawful has also to be good and healthy for human consumption. So it is better to avoid such forbidden things rather than taking the risk to consuming harmful food. Thirdly, this is the mercy bestowed upon us by God and it is His manner in exemplifying justice to the human race. Whilst He creates good and harmful things, He has given the true indication of what is good and what is harmful, rather than having to find out through long years of experience.

Indeed the divine law derived from the book of God the quran has implications on the fundamental interactions of the whole society. Allah Swt knows the betterment of each and every human being and surely has the attribute of the All Knower. Not only shariah framework of economics ensure a perfect orientation of the economics system a nation intends to implement but also to restore harmony and social progress in the way of life of its citizens. When some may create confusion and uncertainty by interpreting the objectives, the dos and dons of the shariah itself sources and clear and perfect translations of the primary sources for instance the Quran and the saying of the prophet are widely available in any language for reference to avoid and correct any misleading.

Conclusion

The religion of Islam is a complete and perfect way of life where every single matter whether in economics, politics, social ECT…are unanimously defined and explained. Shariah which is the divine law derived from the Quran and the Sunnah of the messenger of Allah prophet Mohammad peace and blessing be upon him iterates the confines of any interactions among individuals. Economics transactions, the concept of selling and buying must comply with the dos and dons in conjunctions with the shariah laws.

The shariah framework of economics highlights the core basis for an adequate, unharmful and just cause or ways of doing business. The resources used for the production and distribution of economics goods and services must be complying with the shariah law. Shariah also pinpoints whether the actions trough which those resources are gained are haram or halal. By prohibiting the concept of usury or interest shariah framework of economics launches a clean and safer ground in which people can conduct business and economics activities.

However Islamic shariah also proposes alternatives in conducting business by the implementation of the mudharabah and musharakah concepts. Nevertheless even though Islamic economics system is still lacking a full and perfect implementation of the shariah laws there is hope to come. But we must bear in mind that there won’t be perfection in a man made system fro instance the conventional system and that reality and perfection can be found only if we introduce the rules and commands from the Sustainer of this universe He who has created and coordinated a complete and finite system of the whole world.