View source for Lesson in Islamic Economics by Monzer Kahf V-2




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== DOCUMENT KEY POINTS ==
*functions the functions of the institute are a to organize and coordinate basic and applied research with a view to developing models and methods for the application of shari ah in the field of economics finance and banking b to provide for the training and development of professional personnel in islamic economics to meet the needs of research and shari ah observing agencies c to train personnel engaged in development activities in the bank s member countries d to establish an information center to collect systematize and disseminate information in fields related to its activities and e to undertake any other activities which may advance its purpose
*islamic research and training institute irti establishment of irti the islamic research and training institute was established by the board of executive directors of the islamic development bank idb in h

*islamic research and training institue islamic development bank king fahd national library cataloging in publication data kahf monzer lessons in islamic economics pages cm isbn islamic economics legal deposit no
*isbn the views expressed in this book are not necessarily those of the islamic research and training nor of the islamic development bank

*behavior of a firm is crucially dependent on the form of production organization ie the contractual arrangements governing the relationship of the owners of various factors of production at the disposal of the firm
*if the factors of production are owned by more than one party their combination will have to be governed by some contractual arrangement defining the rights and responsibilities of each party

*while the entire responsibility of loss rests with the financier his liability is limited to the amount of capital that he contributed to the firm and the responsibility of mudharib is limited to his labor except in cases where he fails to follow the conditions set by rabb al mal

*like the rider who holds the reins with one hand and does something else with the other each partner transfers to his colleague the reins of disposition for only a portion of the capital
*in this form the partners do not have to be of equal status they do not have to contribute equal capital they do not have to share the profit in equal proportion

*if practically the business is run as explained in the above example either the rabb al mal would be considered to have permitted either explicitly or implicitly the mudharib to take credit in which case his responsibility will not be limited to the initial capital or the arrangement may be

*the relationship between depositors and the bank is governed by one mudharabah and the relationship between the bank and the investors is governed by a separate mudharabah contract

*the point that is being made here is that the pure or simple forms of contracts available in islamic literature could be combined to derive new organizational forms to cope with the complexities of modem day business
*as an example let us take the case of bay ina which works as follows zaid sells a commodity to baker for say on cash payment and baker sells the same commodity back to zaid for on deferred payment

*towards an islamic theory of the firm while the main concern of the jurists is with the determination of the rights and responsibilities of various parties in a contractual arrangement the economists are more interested in decision making
*zaid is allowed to sell something to bakar for and bakar is also allowed to sell to zaid on deferred payment basis for

*if there is a separation between the owner and the manager and it is the manager who takes decision he would try to maximize his own utility
*he works under a minimum profit constraint only because if he does not produce that level of profits he would be fired

*the implication of the islamic concept of amanah is that addition of vested interests of managers workers to the objective function of the firm is not acceptable
*accordingly he suggests an objective function for an islamic firm of the following form y y f g where f level of profits g expenditure on charity or good deeds the firm s aim is to maximize this function subject to a minimum acceptable level of profits to satisfy its owners and maintain its business

*islamic jurists have explicitly stated that the basic reason for which the rabb almal has given him the money is to make profit and it is in the light of this overall aim that the extent of the freedom of a mudharib or a partner is to be determined
*using a model developed by adrian wood and modifying it for an islamic economy badal mukharjee has shown that a zero rate of interest economy zrie generates equilibria that involve higher growth rates and lower profit margins than an economy having positive rate of interest

*these are some of the issues which along with others have to be addressed while developing an islamic theory of behavior of a firm
*we find bits and pieces here and there and a lot of work would be required to put them together into a coherent theory

*however i did draw a certain distinction between the behavior or attitude of an islamic form or an islamic system towards the modern production organization and i draw your attention to the example of the joint stock company which is based on the concept of limited liability
*i think that there is no basic difference with the conventional theory because as you have pointed out in any type of business organization if there is any risk there may be profit or there may be loss

*my second question is what about the pay structure for the welfare of the firm doctor iqbal as far as trade unions are concerned they are not prohibited in the islamic framework
*therefore if i have shares in companies in a conventional framework in each of the companies my liability will be limited to my share in that particular company

*a participant if you brother iqbal can draw some lines in the production function is it possible to incorporate moral hazard as one of the distinct variables if it is possible then can we theoretically expect to have any distinct impact on production will it be positive or negative or do you think that moral hazard will not affect the overall production or the distribution of production thank you

*this is well known and said that for the mudharib if he was the reason or if he has the cause not only for the loss but for the low level of profitability the owner is compensated by the mudharib
*secondly if you do not have morality i suppose we have some procedure to debt any immoral thing because i think that if he does not have that moral to fix the man the owner should be compensated if he could prove that manager caused the level of profit to drop

*so if this company accrues some loss behind my ownership share value should i compensate for something either or nothing to say on that went its kind of body of the personality of the ownership of the limited ownership if you want to say that is not an islamic issue we should have some measure to prevent the excess loss of this shareholder who has nothing to do on decision making and supervision in order to save from the mistake of the manager

*the second one profit sharing among laborers i mentioned towards the end of my lecture ie give them bonus and give them part of their salary as fixed wages and beyond that they should be made partners in profit by giving them bonuses
*however i did not mention that it should be left to the workers himself as to whether he wants to have a higher fixed wage or a slightly lower fixed wage plus a share in the profit

*the second correction that i would like to make is that whether the fixed wage contract or profit sharing contract is optional depends on the risk attitude of the agent and the principle
*the constraining principle of la darara wa la dirar applies to all islamic economic activities in that any agent any decision maker who has to take a decision whether it is a consumer producer government or anyone has to work within the shari ah limit

*can we being to use these islamic terms are they accepted by modern economists doctor iqbal as far as the equilibrium of the firm is concerned as far as i can see even in islamic economy estimation costs are equal to marginal revenue

*first under the islamic system what is the optimum size to which a firm can grow secondly is the vertical or horizontal integration of a firm as prevails in the modern economic system permitted in the islamic system
*so if the size of the firm becomes so large that it has substantial market power then it has to be curbed

*a participant you have said that technology is neutral with different economic syste miss is that true doctor iqbal you must remember the context of technology that we are discussing
*under the islamic economic framework are there two conditions that must be satisfied in respect to profit the answer is that these two conditions do not relate only to profit

*however the guiding principle as both myself and doctor abdul rahim mentioned is ultimately that the maslahah and the a hluk abra have to decide what is the maslahah in a particular situation and then that should prevail

*therefore we propose to shift the discussion from a philosophical to a practical plane and take up the more general topic islamic viewpoint on distribution or distribution in islam
*productive activity level a distribution among those directly contributing to production process professor of economics at the international institute of islamic economics international islamic university islamabad

*establishment of a viable economic system consider the middle part of the nd ayah of surah zukhruf message we ie allah apportion livelihood among the mankind in the life of this world
*this section draws heavily on mufti muhammad shafie s islam ka nizame taqseeme daulat translated as distribution of wealth in islam by muhammad hasan askari karrar hussain begum aisaha bawany waqf karachi pakistan

*eradication of the concentration of wealth it is possible that a fair and honest working of the system may still lead to growing gaps between the haves and the have notes
*similarly th and th ayat of surah al ma arij message and persons belonging to allah are those in whose property there is a definite right for those who ask for it and those who have need for it

*injunctions at the opportunity or preproduction level everyone has an equal right of access to primary sources of production and wealth as follows i natural pastures and grass that grows by itself ii natural forests and all that they consist of iii sea lakes and rivers and their produce iv undeveloped lands and mines v bounty of war vi any other primary means of production like i v everybody can benefit from these resources according to his ability and effort
*this general principle of eradication of concentration of wealth or keeping economic inequalities within tolerable limits stems from this part of th ayah in surah al hashar message what allah has bestowed upon his prophet muhammad pbuh in the form of fay belongs to allah the relatives of the prophet orphans the needy and the wayfarer

*iii all nonhuman material resources may change hands in the following manner a fungible or perishable resources may be acquired on market prices b all other resources which by and large remain intact besides of course normal wear and tear in the production process may be hired on the basis of a predetermined rental where the rental is the market price of the services involved

*injunctions at the production level for redistribution among the secondary owners in the production process khums ushr and zakah on the outcome associated with the current production process
*a valuation of the fruits of productive efforts ie determination of commodity or services prices ought to take place via a fairplay of market forces

*injunctions on voluntary redistribution during all periods of the islamic history islamic teachings on infaq consistently resulted in voluntary redistribution in the following forms i voluntary nafaqat in general ii rights of neighbors iii waqf for additional measures refer to islamic redistributive schemes by anas zarqa in m
*enforcement mechanism as noted in the beginning the beauty of islam is that it not only prescribes a system but also provides an enforcement mechanism for the divine teachings

*to recapitulate let us note the following points i in islam the idea of economic justice is not left to the vagaries of democratic and other sociological processes
*legal backup i jihad against the nonpayment of zakah ii economic activities which are injurious to the individuals personal interests and which promote economic injustice are simply banned

*formal model of functional distribution of income among participants or primary claimants in the production process wages to be determined by the interaction of market forces of supply of and demand for labor with emphasis on adl and ehsan
*formally the islamic model can be viewed as a three tier model as follows block a distribution of the value of outcome associated with the current production process

*formal model of personal family household income distribution incorporating the functional distribution of income as above and the redistribution of income among the secondary claimants on the outcome of the production process block b intertemporal distribution and redistribution of wealth
*profit i price of product to be determined in its market ii cost of inputs to be determined in light of their market prices and employment levels iii total profits revenues costs to be shared among producers and financiers in market determined profit sharing ratios

*syed abdul hamid al junaid factors of production and factor pricing from an islamic perspective paper read at the international seminar on islamic economics for university teachers held in islamabad during august september
*mustafa and hossein askari economic implications of land ownership and land cultivation in islam in munawar iqbal ed

*following works explore distribution in a macroeconomic perspective along the kaldor pasiinetti lines ausaf ahmad a macro model of distribution in an islamic economy mabid ali al jarhi towards an islamic macro model of distribution a comparative approach both these are published in fahim khan ed
*one may also wish to refer to journal of research in islamic economics for a discussion on these two papers

*characteristics of market behavior in islam mahmood anas al zarqa comment and question doctor munawar iqbal one of the most important differences between the approaches of economists and jurists which the speaker has not commented on and which has very important implications for islamic economics is the combination of economics and fiqh

*market structures which economists have studied and which the fuqaha have not because basically fiqh stopped developing in the sixth century we have a gap of eight hundred years between what the fuqaha have addressed themselves to normatively and what economists have addressed themselves to positively

*would you agree with me that when we have a credit transaction that the transaction cost by necessity will go up because the arrangement of credit is a costly matter also finishing or implementing a contract that involves credit not the exchanging of goods or money directly but by credit multiplies the possibility of various kinds of non fulfillment
*answer if i understand the question correctly you are asking whether the shari ah makes a distinction between someone who engages in trade on a more or less daily basis buying and selling goods and someone else who engages in trade in a less competitive market

*at the time when the traditional fiqh developed in the fifth and sixth centuries of hijra the fiqh was very clear on this matter as most of the holding of goods at that time was a merchant activity
*these have not been addressed fully and satisfactorily by modern fiqh because we muslim economists have not done our work of presenting them in a way the fuqaha understand in the form of the consequences of these new types of market behavior

*comment and question regarding the acknowledgment of the individualistic market social role and exchange you give the example of a person who comes to a contract for selling and buying commodities or goods in the market
*is it a monopolistic structure or pure competition what kind of market structure do you have after they have identified this they go on to distinguish between the forces affecting supply or affecting demand and then they look for a particular time plan and then they ask what sources were behind for a particular price movement and so on

*it is not purely competitive but it is workably competitive if people through their voluntary exchange in this market come to express their preferences and if the supply condition in the market is competitive then you get a market price
*comment and question how does exchange in islamic fiqh ensure justice in the distribution of income and wealth doctor zarqa i will limit myself to very briefly comparing justice in exchange with justice in the distribution of income

*is this attitude of noninterference the same when it comes to the distribution of income and wealth the question can be asked as to whether in market transactions the s hari ah accepts the functional distribution of income and wealth as given with no interference
*however one may question why this difference exists and how the shari ah can accept the market price which may distribution that it later changes and modifies why i think the answer probably is that in market transactions justice is basically concerned with the two parties

*when i said that the fuqaha by the sixth century probably decided to close the door of ijtihad the market situations that the fiqh addressed were essentially those mentioned by the fuqaha of the sixth century earlier
*comment and question i must begin by thanking professor anas al zarka for his very hard work and his explanation of the major principles governing transaction and exchange in islamic law

*now they put such limits for what is considered overcharging but still the position of the hanafis and the other schools on overcharging without any further violation is that shari ah rules will not permit the nullification of the contract
*in the rajshahi area there are a lot of mangoes and there are people who live by selling mangoes and among these there are some rich people as well as some very poor people

*comment and question what is the position of the shari ah in so far as a minor entering into a contract is concerned if the minor acquires equity through stock companies does such a contract remain valid doctor zarqa i do not have the exact shari ah answer on this point

*but if his being a minor is not obvious to the other party if it is concealed or if the other party does not consider this person to be a minor then there are all kinds of factors involved and quite frankly i do not know the details of this shari ah rule
*i can assure you that something which is obviously unreasonable to a lot of sensible people would hardly be permissible in the shari ah

*soon after a good number of people accepted this new religion and due to persecution the prophet pbuh started searching for a place or land where religion could be let free to grow muslims can be governed by shari ah the islamic law and they can be saved from the consistent persecution inflicted upon them

*in the rest of this paper we will discuss the public revenues and expenditures of the islamic state during its early time which covers the period beginning with the hijrah until the end of the four caliph i
*for military expenditure this document suggested that the muslims would provide for their own arms and equipments in case of any military attack on the state and the jews would provide for their own arms and equipments in the collective defence of the city state

*it says that attitude of the prophet pbuh continued in the first few years of hijrah but when the state became rich after the conquest of khaybar which was a rich agricultural
*for instance if a person died leaving unpaid debts he would refuse to perform funeral prayers on him saying will you make funeral prayers on him as i don t want to pray on him because he had unpaid debts

*some reports say that ali of the land was left as property of the umah but according to abu ubaid ibn sallam who made a detailed study and analysis considering the various reports only one half of the land was made a property of the ummah and put under the authority of the state to derive revenue from
*it is manifested in the arrangement made by the prophet pbuh with the land users who were in khaybar that they may stay in that land cultivate it and give half of the produce to the owner of the land who are now the muslim ummah as represented by its government

*how did you know who was the owner i don t know but i thought it from a man who had a hold on it umar then said he is not the owner and then umar called for prayers and when people came for prayers umar told that man that these were the owner did you buy it from them definitely not then return it the land cannot be yours and get your money back this land is owned by the whole ummah and the person who holds it has only a right to cultivate it on rental basis

*the public expenditure during this period in a way of examples we have expenditure items such as spending on guests coming from overseas supporting the poor and needy payments of debts of people who could not pay their debts construction of mosques starting with the mosque of the prophet pbuh in madinah and later on its expansion and the expansion of the mosque in makkah around the ka bah
*for instance umar expanded welfare payments to men women and children he bought a house in makkah and converted it into a prison he assigned people to take care of certain plots of land he kept for the state out of the conquered land he also appropriated lands for grazing for the cattle collected as zakah he established a regular guards for such lands and created messenger services between madinah and major cities in all provinces etc

*general characteristics of public finance during this period what are the main characteristics related to the public expenditure and revenues during this period and what are the general principles of public finance that can be derived from this forty years of experience of the islamic state this can be briefly presented in the following fourteen points

*on the other hand during the time of umar the government delayed the collection of zakah when there was famine in the area of
*there is no other financial obligation on a rich person simply because he she is rich or simply because he she owns more than nisab except zakah

*moreover self reliance production philosophy goes further to the extent that the prophet pbuh refused to give charity to a person who can earn his livelihood although at the moment the person was not working in order to induce him to productive work and he proposed eating out of one s own hand s earning
*this may be derived from that famous report by abu hurayrah that the prophet pbuh helped a private citizen to reprocess his durable consumer goods a rug and a pitcher by selling them to buy productive goods an axe and helped him to plan for cutting woods from the mountain hill or forest and selling them to earn his livelihood

*i call this voluntary contribution the principle of democratization of the government in contrast with the principle of sovereignty of the government imposing in tax levying

*during this period the functional priorities of the society were made clear that first of all comes establishment of religion justice and sustenance of the poor are is next in line then implementing the islamic law in all its branches then comes the other things such as taking care of the material welfare of human beings
*the companions were surprised and when he came out they asked him whether there was any problem and he said that during the prayer he remembered that there were few dirhams still undistributed and that he wanted to take them out for immediate distribution

*these central revenues were used mainly for maintaining the huge army recruited throughout the arabia and usually dispatched from the capital al madinah and for welfare expenditures which was clearly manifested during the famous famine year in the time of umar that was called the year of ramadah
*however while applying this reciprocity principle in public finance umar noticed that some products were domestically needed and to encourage foreign merchandise to bring these goods he reduced the taxes imposed on desired imports to

*since the time of abu bakr a special place was kept for the revenues of the state but since the time of umar a special department of bait al mal house of funds was erected and umar appointed official treasurers to keep bait al mal
*during the time of the prophet several people were appointed as treasury keepers or public treasury keepers

*and to invest its properties and the surplus of the economic public sector for the benefit of kahf monzer the economic public sector and its role in generating revenues for development in an islamic economy paper presented in the seminar on financial resources of the state in modern society from an islamic perspective organized by the islamic research and training institute i r t i in cairo april
*a public revenues in islamic perspectives any attempt to formulate a theory of public revenues in islam or to conceive a structure for these revenues ought to depend on the understanding of the public revenues model of the early islamic period

*in the islamic system the sources of ownership of the economic public sector are allocation of resources by virtue of the system itself investment of the surplus of public property utilization of the yield of the war booties jizyah tithe of trade with non muslim foreign countries and borrowing from the private sector

*it must be preceded by many moves especially manipulation of the kharaj of the economic public sector collection and spending of zakah selling what can be sold of public goods and services to the buyers or users at a suitable price financing what can be financed of public projects especially those of developmental nature through equity participation by the private sector on the basis of musharakahhh or mudharabah according to shari ah voluntary or compulsory public borrowing and donations to the public treasury etc
*the size of damage does not justify the confiscation or seizure of private savings in the name of taxes to attain price stabilization for two reasons i there are other alternatives to reducing income which attain the same purpose namely reduction of government demand absorbing part of individual income through public borrowing and using monetary instruments to reduce demand etc

*we noticed how the prophet pbuh applied this principle on blood money and prisoners ransoms in the constitutional document he issued on his arrival in madinah it should be noticed however that blood money and ransom are part of the indispensable and essential expenditure

*such participation may reduce the deficit in the ordinary or development budgets to an extend that might push the entire financial and economic system to a greater degree of democracy where the government s economic power whether in terms of its ownership of productive capacity or in terms of its being the biggest employer would be distributed and owned more and more by individuals
*the idea of private sector participation could be expanded further to include the financing of ordinary current expenses through identifying a number of public services sectors such as operating an airport or running the school system in a given year in a given city where such services once specified in details can be contracted to the private sector

*b the size of government in the islamic system does the islamic ideology call for a big or small government it would not be easy to give an answer to this question because it depends not only on the ideological foundation of the islamic econo political system but also on the resources available to a muslim country as well as the economic and political specific circumstances of that country

*therefore more religious functions are given to the government in the islamic system while the functions of education public service and similar things may not necessarily belong to the government in the islamic system unless the issues of justice improving the economic welfare of the poor and market failure are much crucial in determining whether or not this kind of
*from the point of view of the theoretical structure of public resources in an islamic state we have noticed earlier that the islamic economic system accommodates public ownership of natural resources side by side with the private ownership

*the basic tools of fiscal policy may be represented in the following i the use of zakah as a tool of fiscal policy it is known that zakah s basic features are determined in shari ah in a divinely manner which means that humankind has no right to make any change in these basic features
*service should be provided by private sector or by the government unless they are financed by revenues from public property in the latter case those functions and others should be taken up by the government as part of its strive to service the best interests of people

*also the collection and distribution of zakah can be made either in cash or in kind and the cash kind combination of collection and distribution is also another tool of fiscal policy
*additionally the government may choose to distribute some portion of proceeds of zakah in terms of equities of productive assets either already existing in the market or newly constructed by zakah proceeds themselves

*mohammad diyauddin al rayyes al kharaj wa al nuzum al maliyah fi al dawlah al islamiyah karaj and financial systems of the islamic state dar al ansar cairo egypt
*abdin ahmad salamah ai mawarid al maliyyah fi al islam financial resources in islam paper presented at the seminar on financial resources of the islamic state in

*monzer kahf al qita al aam al iqtisadi wa dawruh fi toulid al iradat al ammah fi al nizam al iqtisadi al islami the economic public sector and its role in generating public revenues in the islamic economic system paper presented at the seminar on financial resources of the islamic state in modern time published by islamic research and training institute jeddah saudi arabia
*monzer kahf towards a theory taxation in islamic economics paper presented at the seminar on fiscal policy and development planning in islam held by the international institute of islamic economics international islamic university islamabad pakistan july

*on the other hand kharaj is a rent of the land owned by the state or by the ummah as represented by the state
*i have very much benefited in the same that in future when i shall make it a recommendation to the government to introduce reforms in land administration and collection of land revenue i shall mention it in my report

*now if you impose taxes you can select any form of taxes on land on wealth on income on export on import any kind of taxes as long as you preserve the principles that islam stipulates for taxation

*thirdly from the islamic point one may ask whether the debtor is the one who causes inflation or the government or the banking system or some other agent internal or external if the debtor is not the cause of inflation why should he she pay for it

*i give you the equivalent of in taka when i give you the loan and a year from now i get the loan back i need to get the value of or by using a nominal accounting currency like the sdr or european currency units or what we call islamic dinar which is another name we like to use in the idb for the sdr ie a nominal imaginary currency or accounting unit

*question what will be the shape of a bank rate whether it should be there or it should be modified or do an islamic state require at all a bank rate or not doctor kahf when the state bank of pakistan provided for the change to islamic banking system it restrained using the bank rate because the bank rate is based on the interest concept

*why the fiqh academy is telling that the same amount of money and same currency should be returned in the loan why the fiqh academy is not implying that the money should be in real terms real value value of the money should remain the same whether it is implying or not this is one point
*i mean that you have to go back say after month month or month for that small period how can you lend that money to the rich without a sharing measure that this point of inflation is so important that brother this fundamental question should be addressed again and again may be

*now inflation could be caused by several factors internal or external and it damages definitely at least two kinds of people those who have their assets in monetary terms or those who have their contractual income also in monetary ter miss if there is any body to compensate for inflation or pay for it why should that body be the debtor specially there are cases where there is no debtor at all

*if there is an outside cause as said by brother qahtani who is going to follow that outsider i think in that case probably the government should be responsible to compensate you for the real balance in your pocket that lost their value because of imported inflation no body else can relieve you from this kind of inflation except the government
*in case of inflation ie erosion of value of money can the state make this amount of good gesture obligatory so that the other party is not afraid of getting less than what he she gave

*with the grace of allah subhanahu wa ta ala more than one hundred islamic banks and financial companies are now working in the field of financing all over the world in muslim as well as non muslim countries
*islamic banking munawar iqbal the topic on which i am going to share my views with you this morning is islamic banking which is a very important area in the field of islamic economics

*now in the case of a loss the person using that money let us call him the entrepreneur loses his labor as a result of the loss and he has to pay interest and the capital to the lender whereas the lender or the financier in spite of the fact that the business or the enterprise has ended up with a loss gets his money as well as his interest
*of course we are not dealing with other kinds of riba here such as riba al fadl or riba al uyu which are involved in trading and which are not the subject of this lecture

*banks collect the savings of all small savers and give loans to the industrialists who on a rate of interest of percent which in the real sense is not even equivalent to the rate of inflation
*therefore had these savings been invested on the basis of profits sharing they would have had a much better return and as i will explain later profit sharing is automatically adjusted to the rate of inflation whereas the rate of interest is not

*of course they are concerned about the safety of the capital itself but in an interest based system the safety of the capital is the sole criterion because the rate of interest is fixed and the bank s main concern is that it gets its principal as well as its interest back ie fixed interest

*in the islamic system the liabilities of the bank are also variable therefore if there is any shock it equally affects the assets as well the liabilities of the bank
*moreover since islamic banks have an interest in the project they will also take part in the management of the project since they are specialized in the area of finance and investment

*the distinction between a mudharabah contract and a loan contract which i mentioned earlier is that in a loan contract the principal is guaranteed while in the mudharabah contract the principal is not guaranteed
*therefore the islamic banking model is based on this two tier mudharabah or at least one prominent model of islamic banking is based on this two tier mudharabah

*one of these is musharakah which differs from mudharabah in the sense that in the pure mudharabah model one party gives capital and the other party contributes labor while in the musharakah model both capital and labor are shared ie the parties share in the capital as well as labor and in the management of the principal itself

*in addition to rent the customer will pay part of the price of the product and to that extent the ownership of the customer will gradually increase in the product and his rent will gradually decrease
*this form of business is permissible in islam and as a matter of fact it is a form of bay al amana

*in the field of manufacturing for example the financing of textile mills banks will give financing today and they will purchase the cloth or products of the mill after one year when the mill or the textile factory goes into production
*services are on loans of the islamic development bank for example given to muslim countries on the basis of a service charge ie a proportion of the principal amount which they consider to be an administrative expenditure of the bank

*the most important thing in evaluating islamic banking is to recognize that the fact that they are even managing to survive is a great achievement because they are working in an extremely hostile environment
*he sells it for one million dollars and then purchases it back from the bank for one and one half million dollars

*there is a whole spectrum of financial or what is called nonbank financial intermediaries and stock markets in which they can operate and they are parts of the financial market where they export to each other

*if the islamic banking movement is to prosper in the long run they have to gradually move into more variable return which is to say that mudharabah and musharakah have to form the backbone of the islamic banking movement
*they have their difficulties as i have said in that they have to compete with conventional banks and in this phase of their development they have to generate confidence on the part of their customers

*but that group of people say it is not islamic in the sense of the benefits of islamic banking which will not be forthcoming because the banks are not taking any risk all of their modes are fixed return modes which do not involve any risk for the bank
*even if they are insured against it the liability falls on them and then they insure against it they are responsible as they import in their own name and then they resell to the customers

*islamic banks are working against tremendous competition from other institutions and if they give undue importance to social objectives they will be unable to compete and their failure will be counter productive

*actually the bangladesh islamic bank is interested to know why the distribution of finance is not through the alternative modes of financing you mentioned that the alternate objective is to give finance through the modes of mudaraba and musharakah
*do you have any data on bangladesh and pakistan what proportion of finance is done through these two modes as opposed to bay salam and ba ymuaj j a l in bangladesh a very small proportion of total finance is concerned with the mudaraba and musharakah modes financing mainly depends upon ba ysalaman ba y muajjal

*is it because of the contribution of these persons that islamic banks are surviving or is there some other reason finally i would like to know whether the basic objective behind islamic banking is to establish reallocation of funding and justice and i am interested to know whether you have seen the next page and are able to do anything about the establishment of an islamic bank in pakistan
*we know that in the business world jews and hindus dominate and do well because they know that if they cheat once they will not get the business again

*the islamic legal framework is very important to smooth functioning in our country but the bangladesh bank has made some concessions to the islamic bank in the case of the liquidity ratio
*regarding whether service charges are different from rates of interest if you ask me honestly i do tend to agree with you i have a lot of questions to ask about the practices of islamic banking in pakistan and we do express that in various forums in pakistan

*as far as the interbank relationship is concerned there is the possibility that they can get funds from other banks on the basis of profit sharing and that they can calculate the share of profits on the basis of the daily product
*solve this problem secondly should the discount rate for the purpose of project evaluation be calculated in practice doctor munawar iqbal as far as the first question is concerned that in bangladesh the liquidity ratio for islamic banks is percent instead of percent it is a very welcome legislation

*you sign another sell the agreement with the bank which has become the owner of the house according to the first contract
*however profit sharing is perhaps description of the system because of mudaraba which is the basis of the two tier mudaraba is the basis of islamic banking

*therefore if you have two projects a and b and both are able to pay interest on the capital installment the conventional bank is satisfied with both of them whereas in case of the islamic bank it will evaluate the project from the point of view of profitability because it will share in that profit
*secondly you mentioned that there is a lack of equilibrium between liabilities and assets in the conventional banking system but there is equilibrium in the islamic banking system ie there is no lack of equilibrium in islamic banking

*because of the economic condition the rate of return goes down but the cost of capital is fixed so that there is disequilibrium between the cost of capital and the rate of return
*the cost of capital is not deducted before but rather after the deposit has finished and whatever there is whether there remains is either profit or loss

*i should mention that since the money comes either from the government or an international financial institution there is a national tendency within the banks management to allocate funds to projects that are willing to share percentage with the bank or the bank would like to allocate funds to those projects which they think are profitable

*if the true value of the product is one thousand they will select for the resale contract one thousand and eight hundred and the tacit understanding between the bank and the customer is that if he pays only one thousand five hundred the amount will be mark down

*if the risks are equally borne and if the profit sharing is the process of passing funds through the banking to business how to ascertain profit distribution on a crude technical law by the borrower this is a question of moral hazard ie how to evaluate what is the exact rate of return or rate of profit do we believe whatever the businessman declares or are we allowed to ascertain for ourselves doctor m

*instead of putting all their eggs in one basket they put their eggs in one thousand baskets and in this way even if one project is not producing the desired result the bank is affected only a little

*therefore if there is any need for going to the factories and mills the islamic bank should be helpful and should share its information and its expertise for the common interest both of the bank and of the businessman in creating more profit
*do we have to impose on the islamic bank at this stage certain social functions does it not go against the concept of commercial banks these questions are very important and need to be tackled now at this stage to help islamic banks develop

*firstly brother sarker raised the point that the legal framework for islamic banking is worked out in many countries of the world but it is very much a problem for our country
*another thing we have to see is whether there is any undesirable feature involved and to what extent we can advise as we have been doing

*yes there is the problem of hazard but as i mentioned if the banks have the courage and they go to the businessman they also have a just interest

*we did it in the case of alrajhi banking and investment corporation and the contracts on the basis of which we worked with those banks were approved by the shari ah board of our bank
*i know from my experience as an economic advisor to al rajhi banking and investment corporation which has a branch in london and in tokyo and an office in london and in tokyo that we were dealing with a number of non islamic conventional banks on the basis of islamic contracts

*as far as the role of the central bank in an islamic economy is concerned its role is the same as other central banks that is the controlling of the money supply and ensuring the stability of the value of money
*in this way they have a higher position than the board of directors and that position enable the shari ah board to control and monitor the activities of the bank and as i mentioned even in dealing with conventional banks like citibank and others they were able to negotiate in such a way that the bank could not finalize contracts until the shari ah board approved them

*other banks and companies keep undistributed profit that is decided by the management of the bank s board of directors and the rest of the profit is distributed to the depositors on the basis of a preagreed ratio in the proportion of money utilized by the bank on a daily product basis
*so gradually he increases his ownership and the ownership share of the house building corporation goes down and accordingly the rent also goes down

*moreover the presence of zakah and its position in islamic religion tell also one of the characteristics of the islamic system that its ingredients are always given moral support and spiritual impetuous they are interwoven research economist islamic research and training institute irti of the islamic development bank idb jeddah

*surah al taubah that talks about the application of zakah and provides the most detailed quranic instructions of its collection and disbursement specifically these verses use for zakah the term sadaqah take out of their mal a sadaqah and sadaqat are only for the poor and the needy verses and

*the agricultural produce which is all an income items in contemporary ter miss with regards to the details of zakahable agricultural products there are several opinions but i think those views may be given in details in an under graduate course where we look into the rulings of shari ah what are the included items what are the exemptions etc
*these two points fairly characterize al qaradawi s view namely the inclusion of labor income and the inclusion of return on real estate and other fixed assets in the zakahable ite miss he adds that return of fixed assets is zakahable of the rate of either on gross revenues or on net revenues

*this opinion looks at all items of wealth and income and gives a blanket coverage that all items of wealth and income should be included in zakah keeping in mind the normal exemptions of personal ite miss in other words this opinion considers all the net worth itself as zakahable since the qur an says take out of their mal and mal includes every thing one owns

*this is on the basis that public properties and public revenues are themselves to be used to serve the interests of the whole society on top of these interests comes the welfare of the poor and needy which is the main objective of zakah
*on the other hand zakah in saudi arabia covers cash in bank and in hand ie current account in bank as well as cash on hand provided they are part of business assets but these items will escape zakah if they are owned by a person who does not have a business

*however some muslim scholars argue that whenever the exemption from zakah of non muslims living within the boundary of the islamic states creates unjust distribution of income and wealth in the society and effects wealth to flee to the hands of non muslims a zakah equivalent tax must be imposed on non muslims which should be devoted like zakah to social relief activities of the non muslim community in the muslim country

*hence although it is used basically for charitable purposes it does not have the demeaning effect on the poor a charity might usually have as it is an obligation on the rich and an act of worship on the riches part in contrast to being a mere benevolence or charity

*this is perhaps why the prophet pbuh as early as the th year of establishing the islamic states put aside some agricultural lands to be used as a public property producing revenues to the government

*in a contemporary context the proceeds of zakah depends on several important variables the distribution of wealth in the muslim country the level of income and prosperity the relative contribution of the private versus the public sectors to wealth ownership and income the efficiency of the management of zakah the comprehensiveness of zakah regulations with regard to zakahable items of wealth and income etc
*this is reported in yemen during the time of the second caliph when over a period of three years the total yearly proceeds of zakah in yemen could not finally be used because there was no need for it and it had to be carried over to the central government in madinah

*looking into the jurists opinions with regard to zakahable items as classified into three categories earlier in this lecture one may easily realize that the classical view about zakahable items produces the lowest proceeds of zakah compared with the al qaradawi view and the more modern view

*however it happened historically that with the spread of dictatorship and the lack of political legitimacy and moral confidence in the rulers in parts of the muslim world muslim jurists as early as the beginning of the second century of hijrah developed a tendency toward preferring self disbursement of zakah by the zakah payer
*additionally it may be argued that the introduction of zakah in a country should change the pattern of demand for consumption goods by shifting it more towards goods that fulfill the basic needs and away from luxurious goods because it may reasonably be assumed that most recipients of zakah would use it for the purchase of the first category of goods basically food and

*whether the increase in income of the poor which results from zakah receipts would increase aggregate consumption for the economy on one hand and savings on the other hand

*fard al kifayah means that there are certain social needs that must be fulfilled and their fulfillment is an individual responsibility of the capable members of the society who are individually responsible for these needs as long as they are not completely fulfilled by someone else and the moment someone takes care of these needs others are relieved from that personal burden

*the concept of fard al kifayah in shari ah applies to many social requirements which include as examples providing a place for worship a mosque burying the deceased cleaning the environment defending people against epidemics and enemies provision of drinking water etc
*fard al kifayah concept provides for charging the rich with the cost of many social needs that are indispensable for the muslim community

*now as long ago as frank knight the well known american economist complained about what he called the terrible confusion two ideas together that is some people are under the wrong impression that the rate of return on an investment and the rate of interest on a lone are one and the same thing
*project evaluation and time value discounting muhammad anas zarqa i will address the question of discounting first because it is special and i will then move on to the question of the criteria for project evaluation from an islamic point of view

*an economist like paul samwelson for instance has a look or monograph on capital and the rate of return which was pressed in the hague and a series of lectures in which he again makes the very fundamental and central observation that the rate of return is a fundamental part of the real economy
*you may have a socialist economy a capitalist economy a one man economy or any economy you can think of

*could we theoretically have an economy where you have a positive rate of return on investment and at the same time you have an administrative ceiling on the rate of interests is there possible contradiction between the two as long as you have real investment going on in the economy you have rates of return

*if you have benefits and costs of a particular investment they are usually spread over time in a different range of benefits and a different range of benefits and a different range of costs

*are investment projects utilizing this kind of discounting permissible from an islamic point of view if they are permissible what kind of rate of discount can then be used since we are assuming that in islamic economy there will be a zero rate of interest by administrative decision can we in such a society engage in investment using discounting and in this case what kind of discount rate do we want this is precisely what i want to discuss

*there is absolutely nothing in the shari ah to prohibit or to suggest that we should not sue discounting of prospective cash flows in project evaluation
*there is absolutely nothing wrong in using discounting and i mention in what sense or how we can carry out this discounting which is entirely legitimate

*so the conclusion is that there is absolutely nothing the shari ah to prohibit or to recommend against using discounting in project evaluation as long as you are comparing one halal project to another halal project

*i think it was on prices and markets in which he has the following statement that what we should use for evaluating prospective investment is a rate of return that represents the opportunity cost of investment
*should we say that using this arithmetic is haram because the people who are engaged in riba use the same mathematical formulae we go by the nature of the relationship

*when this is done and this is an intellectual exercise people can engaged group of muslim scholars on islamic shari ah and a group of economists and social scientists and they can come up with a list of priorities for any country
*for instance can a country which has widespread malnutrition and purchases food export that food is it a high priority another country which is facing external threats and may be eliminated from the map may find that some defense activities are an extremely high priority at home at a particular time

*in spending money there is the minimum compulsory fard which is zakah and then there are other ways of spending in the way of allah which are less and less mandatory as you go along the line
*so we attach preference to more real income over less and to more convenient real income over more difficult to obtain real income

*a question is poised from an islamic point of view can we see these two projects as equally desirable from the point of view of this single criterion ie the second criterion as far as my own understanding is concerned there can be no hesitation in answering

*the qur an refers to man in one of the ayas of surat al nessaai do not give the people poor of judgment the wealth that allah has made a qiaman
*they suggested technical ways building into the project evaluation process a certain bias towards the cash flow that is expected to be reinvested versus the cash flow which is expected to go into consumption

*why should we think that we can taken more than one criterion into consideration only after we use mathematically economic techniques we can do it by simple logic although it is more earnest and likely to serve society s interests more than ignoring whatever is not convenient to us
*whatever project you think will stay more or less intact for the next generation may take extra preference over a project which is to be depreciated fully within the life time of the present generation and so on

*have in another paper suggested a particular matter where we can struck an islamic social welfare function for project evaluation by making several hypothetical projects and defining the impact of each project or each of these criteria or any other list of criteria and then assigning a weight to each project

*now how many projects in a country have been done purely for personal reason let alone outright corruption either in the selection process or in the implementation process we must recognize these facts and not waste too much time in writing project evaluation manuals
*as for the rate of discount you can argue forever about whether it should be o percent of percent and about which is more optimal according to the general equilibrium and so on

*i think that the criteria which have been mentioned in the paper may be termed the objectives of project evaluation and the fact is that in conventional economics what criteria we have taken for project evaluation can be use din islamic economics as well
*however if you start with those who do not know what project evaluation is then these criteria will not help them because they are supplementary to project evaluation not a replacement of it

*however suppose that a secular economist argues that in a flexible market based system if the internal rate of return can be calculated and if it is related to the borrowing rate or if it is even related to the mudaraba rate in the islamic mode of financing in a free competitive market the mudaraba rate and the borrowing rate would be equal in time
*then what is haram in linking the discount rate to the interest rate provided that it is also equivalent to the mudaraba rate i mean can we depend on this type of thing or can we convince a secular economist if you did not understand me clearly i mean that in discounting cash flow we get aninternal rate of return and we use this for project selection purposes to determine which one gives the highest rate of return

*they call this the social welfare function and if you look at welfare economics they consider that one important contribution was that of direction where samuelson showed that if you import criteria or objectives from outside a social welfare function you can work out your welfare economics smoothly

*but later on as they courageously started introducing current technique and the other development development new computer came to play and important role then the whole thing started to transform and you have got better assimilation of standards for evaluating the technique

*we do not ask for new tools because we have to focus on the tools because in the seminar here we can talk and other places where you are talking about the development of methodology so when you talk bout standard technique you have to know the standard technique
*the second round effect or the third round effect may be that more people will benefit in one project which employs less people immediately and another project which employs more people may be of less benefit to less people

*what is it economics clearly says that most economic criteria on public finance and on project evaluation are normative in nature that is the economics of project evaluation are not saying how the government and businessmen evaluation a project
*consequently i do not find as much need as you may feel for developing new techniques because the techniques developed were normative in nature or they were narrow minded as far as putting forth one single objective for society which is efficiency

*however i would at the same time say that we cannot impose these criteria on him by the order of a muslim government which acting in the best interests of its own people and guided by islamic teaching has decided to curtail the choices available to private investors or to induce them by various ways and means to select projects which are more in the public interest
*now when i think that someone gives one hundred taka as a loan and that amount has to be paid hundred and ten a year later this is riba and riba is haram

*real investment always has some risk attached whereas with a personal loan as you will know from an economic point of view the pure rate of interest is something that is above and beyond whatever is required to cover that risk
*you take whatever personal physical collateral you wish to make the loan less risky but you cannot make income out of a loan

*now if we analyze this situation empirically the question of why riba has been prohibited by allah ta ala becomes very clear and there can be no compromise on our part on the question of riba at the national the personal level and the international level
*when we consider the question of riba it is a fact as has been presented several times by several of our brothers that riba is prevalent at the international level and that this is gradually making the poor even poorer

*what has made them sure that you have the ability to pay and why do they keep loaning while this ability to pay in their concept was initial if the funds were introduced on a participatory basis no bank in the world would give you any money unless they really studied the project thoroughly

*so whenever you have a recession these countries are on the brink of bankruptcy because there is no relation between what they have to pay which is fixed by interests and what they are able to produce and export which is related to the world economic situation
*so we definitely can say that if international financing could be done on a participatory basis corruption would be less inefficiency would be less and the balance of payments problem would be less as well

*the rate of return which is one form of the discount rate is related to investment
*thank you very much for your excellent lecture brother doctor zarqa and i would like to thank you for your patient participation

*one can make use of his study of the qur an sunnah and whatever fuqaha have said in order to ascertain certain principles with respect to international economic relations and order
*however whatever they talk about it is basically in the sense of a closed economy although once in awhile they do talk about the injustice of international finance

*these should actually be the driving force in relationships between muslim countries as well as between muslims and non musli miss but the issuance of this book is only step to understand this issue there is a need to talk about the methodology and although he discussed a lot of problems we still need to develop our methodology since he is not an economist
*i have divided the paper into two parts the first is an islamic perspective on how international economic relations should be and what relation and order should we have and the second is how the current situation has deviated from this sort of perspective together with possible solution

*how will they become islamic if they cannot come into contact with us if we separate from the whole world by saying we are muslims we are the faithful and they are infidels we cannot insulate ourselves a part of our dawah activity is an economic and political interrelationship
*ismail raji al faruqi in his work on divine transcendence published in a journal in does not differentiate between human creatures as they all are objects of divine care or ethical normativeness or as recipients of god s bounty independent of personal efforts

*at one point of time after islam came and during the time of sahaba was the goods of byzantium which was the enemy of the islamic state moved free in and out of the islamic state
*hazrat abdullah ibn al zubair received cash from people going to iraq and wrote to his brother mus ab ibn al zubair who was the governor to pay the travelers

*regarding the free movement of labor one of my friends from the university of amsterdam told me that the major problems of the world could be solved if there was a free movement of labor
*i have mentioned the qur anic verses earth is a wide expanse that he may go along therein spacious path and allah has made earth subservient to you so traverse ye through its tracks and enjoy of the sustenance which he furnishes

*sura al nisa says that he who leaves his house in the cause of allah in order that economic conditions may improve finds huge and abundance of wealth in the earth again in sura verse in what are you engaged they said we are oppressed in land the angles say was nt the land of gost vast so you migrate through it we should change our attitude regarding this

*so you see they lowered trade barriers on industrial goods so that developing countries can reciprocate but they put up barriers on imports from developing countries even though they lowered trade barriers on industrial goods

*as for the debt service ratios as a percentage of exports and services in same cases it has fallen but in most cases it has grown fantastically
*of course not all of them are monopolies but most of them are islam visualized the problem of monopoly

*so we raise the interest rate the capital flow in the land but because the uncertainty throughout the world the speculators are in the market they are wrongly focused
*then we would be able to dietate our own ter miss they are waiting to deal with us and to give us money for our export or to encourage our import from them

*then in the hadith the prophet pbuh said muslims in friendly relations mutual compassion and sympathy are similar to a single body if one of its parts complains from an illness then the whole body suffers from sleepiness and fever

*we should replace all of these interestbearing instruments with the profit loss sharing system which involves joint ventures equity participation profits the operation of ordinary development institutions cofinancing and many more multinational development institutions of the south
*now if we join with other southern banks such as the asian development bank and the inter american bank we will be able to convince the donors that we are a power to be reckoned with

*the only way to do this is for the people to involve themselves in principles of cooperation inspired from islamic faith because we have nothing else to do and we cannot involve the islamic injunctions unless we do something ourselves

*nothing is said about the raising of trade barriers and there are no principles in the shari ah advocating the raising of trade barriers except for increased revenue which is a different issue

*why should england put up barriers because we are powerful as long as we are not powerful they do not put up barriers

*shah mohammad habibur rahman s comments i would like to request the organizers sponsors and cosponsors to make available to all of us as soon as the seminar is over a full transcription of the paper that have been presented
*i would like to suggest to the islamic foundation that before it is published the participants should be given cyclostyle copies from the islamic foundation or the islamic development bank

*another point is that they are threatening us and they are compelling us to sell our commodities at the price that they want to give us
*if we can prove that profit sharing is more profitable not only for the donors but also for the recipients then we can obviously set an example for non muslim countries to follow

*but how about promoting immigration among the muslim countries now if the qur an appears to direct that according to the quotations he cited then how about some positive movements in the promotion of development everywhere within the muslim ummah it seems that immigration deserves more attention that it is getting now
*this is dependent on many things each country has its own history of development and colonialism and its own development policies and their relationship with the world

*how can this problem be tackled in the islamic perspective in order to lead the country to industrial development salahuddin as far as the infant industry argument is concerned i go to islamic perspective later on
*what is your view on this similarly the currencies of different muslim countries have widely different percentages of acceptability as a means of international payment

*optimal trade areas consist of those countries having more or less the same economic characteristics similar to each other for example in terms of production function and structure of the economy
*if two countries can trade then their trade structures are not compatible then policies can be undertaken different islamic countries

*is it feasible or practicable that all islamic states could exist without trade barriers tariffs or any kind of customs system therefore it is the duty of islamic economists fukaha and muslihin to foster closer economic relations keeping some kind of trade barriers and tariffs for protecting their national interests because we do not have an ideal condition of one islamic state

*question to sahahuddin how can we build one muslim state and islamize the whole international spectrum salahuddin the way to do this is for all muslims to start being good muslims in everything they do in order to convince non muslims that islam is a good religion

*chapra i am particularly indebted to the islamic research and training institute of the idb to islamic foundation of the ministry of religious affairs of bangladesh and the al baraka bank who have organized this seminar in this city

*the problem has again got strength and questions are being raised what is the right solution for it i will only talk about three issues at the moment one the magnitude of the debt problem second the root causes of this and third the solution

*if this excessive absorption had been due primarily to investment we could have condoned it we can say that in future the position will become better as a result of this investment because there is a time span between investment and growth in gross national product and ultimately the growth of gnp will be higher and they will be able to service the debt

*people are afraid all the time of borrowing at the higher rate of interest because they feel their revenues their cash flow may not be sufficient to enable them to service the debt and investment tends to go down

*you want to have a re structuring which is not unjust to the poor which will not be bad for growth in the future as injustice and lower rate of growth will not be workable for a long period of time
*you will give money and he will buy with that money chocolate and consume it or he will go to resort and play gambling and loose the money

*irrespective of where you go whether it is sweden usa uk or germany or in low and middle income countries whenever the government talks of reducing spending generally the first target is welfare spending and not unnecessary spending
*higher prices higher interest rates higher currency depreciation and all these will ultimately lead to lower spending and since prices technically miss to take care of disarming objectively therefore it will not make a difference

*but why imf has to resort to only one prescription why they are ordering the developing countries to use their left foot and not both their feet as we all know that this increases our efficiency and enables us to bear the burden better with only one foot i cannot bear the whole burden but when i use both my feet to carry weight i can do it better
*it is just like saying i have two feet right foot and left foot and you come and tell me i order you to tie right foot and always walk with your left foot alone

*even the us government is unable to do it and the uk government or german government they are enable to do it and we also the governments of developing countries cannot do it for a long time
*prices the rise in prices will be higher the rise in interest rates will be more and the current depreciation will be much greater

*you have not gone to the market yet and you eliminate many of the claims before you go and when you go you have pure claims on resources and therefore you don t impose as much pressure on resources as you would in a secularist system
*it would not be one sided because for how long can you make a person walk on one foot for a mile or some strong persons can walk for two miles but if you can make him walk on both feet he can walk much longer and continue to walk with some rest in between

*we had two rooms may be he would have three or four roo miss we used to sleep on the floor spread a mattress at night and roll it up in the morning may be he had one good bed and the children used to sleep on the floor in any room and so in other words there was not much difference
*i think even all needs of poor even in bangladesh not to speak of a relatively better country like egypt or iran but even in bangladesh all the needs of poor people can be satisfied if the muslim countries were to lead a simpler life so they don t put too much pressure on resources

*in other words if a rich man who wants to smuggle some goods more expensive goods for use by himself and for his family but he knows there are a hundred people who will angrily curse him then he will desist he will desist and he will not do it and if he knows that among this one hundred people there may be one mad man who may even attack him he will desist even more

*this is a part of moral upbringing that you don t like a person who disobey the values given by god and if he receives a sort of social boycott or at least nobody praises him of what he is doing he will not do it because people do this sort of conspicuous consumption because people call them great people
*if the private sector does not get funds for luxury consumption natural resources will be released for the need fulfillment of the poor for the import of capital goods for raw materials needed for investment for production and so on

*so if this kind of interest based spending is not available say for defence the governments will be forced to resort to policies of peaceful existence and a substantial part of the spending will decline and the debt will go down
*they make all kinds of fuss we will not sell them to you and you beg them and hug them and they will sell it anyway and on top of that they give you suppliers credit for this purpose

*i have explained yesterday that if somebody wants to marry his daughter and he was to do it in less money he will not take bribes but if he knows that he will have to spent a lot of money for the wedding of his daughter he will resort to corruption and this affects the efficiency and equity in the society

*first of all they had to buy all the available goods from makkah and to sell in damascus or in yemen and then they would use the proceeds to buy goods from there to sell in makkah or madinah and they need substantial financing for this purpose

*reduce your debt and you will be free this is what we are unable to do now because when we borrow from western countries we have to beg before them we have to kneel before them all the time all the time these countries go to the group of creditor countries and beg them and they impose conditions that you will not do this you will not do that and one of these conditions which come indirectly is that you will not resort to applying real reforms needed in your societies
*there will be different strategy in the society there will be different groups the poor and the rich and there will be a conflict between them in this conflict who will suffer the poor will suffer and this is what happened in our society

*only way to attain economic freedom is to re organize our society in a way that we do not have to borrow from them and if we have to borrow borrow so little that they will themselves come to ask us to lend us
*but if we do not reduce our spending our indebtedness will continue and our problem will keep on multiplying

*in our country many people are saying islamic banking cannot work and islamic economics cannot work and i personally feel that this man can come here and talk to our university teachers and to our great intellectuals and professionals so that by this talk form him we really get the courage that our intellectuals are convinced that the islamic economy and islamic banking system is the solution is the right solution of the problems of modern time
*he has been continuing for the last two decades over there and it is because saudis are not releasing him from there because he can talk on the same terms and guidelines with the american intellectuals as you heard his intellectual high order and he is still in saudi arabia

*this idea of promoting non conventional trade among the muslim countries this is not the trade of oil or main products but of those products of which the countries are not famous but they can be encouraged

*question to what extent a common market of the muslim countries would help in solving the indebtedness problem of the indebted muslim countries chapra well a common muslim market would enable muslim countries to export more

*i don t say that this is the best thing but at that time given the considerations that the income was easily available and the infrastructure was not available to study projects feasibility studies and to invest in long term projects we have chosen the easiest way
*so it is to be invested in a manner that it will remain liquid enough so that we can draw upon it as soon as we need it

*we have to have loans from western countries and it is not possible to get loans without interest which is seriously prohibited by islam what is the way by which we can get loans from western countries we will be saved from interest chapra as i indicated in my lecture one of the most important ways is to reduce all unnecessary spending
*the result is that the import export gap will decline and even if we do not have surplus the gap will be smaller

*the development of the discipline in the last few years has led to the establishment of teaching and training programs at a number of places and in several countries
*while it is imperative to inerease the present effort manifold it is also important to keep a vigilant eye on the experiments underway in order to ensure that they achieve the objectives for which they are designed

*the major defects from which the education system in most of the muslim countries suffer may be identified as follows firstly the education system has been bifurcated into the so called modern education and religious education
*objectives of teaching programs in islamic economics teaching of economics in major universities of most of the muslim countries inherited or borrowed its style from western universities

*in the light of these broad principles the teaching programs in islamic economics should aim at the following i knowledge of arabic good enough to enable the students to have a direct access to classical islamic literature and original sources
*any prescription for the treatment of the ailing system must include the following elements i the so called modern education and the religious education system must be fused together

*viii to prepare the student for the market in order to meet the requirements of islamization efforts on the one hand and to provide decent means of living for the graduates on the other hand
*meaning and scope of islamic economics economic system of islam as a part of its overall philosophy of life

*areas of private and public ownership in islam ownership and cultivation of land
*islam and other economic system the economic system its meaning and functions

*measures against accumulation of personal wealth the institutions of zakah sadaqat khairat and awqaf distributional aspects of the islamic law of inheritance
*interest free banking and insurance prohibition of interest and its economic and social significance

*role of the state maintenance of law and order security of life and property social security provision of basic necessities of life social overhead capital education and tabling economic development social justice
*economic development and planning islam s keen interest in economic development

*they are like the first few drops of rain that herald the downpour of heavy torrents
*in addition every teacher should be asked to introduce islamic elements in the conventional courses as far as possible

*zakah and its economic role the place of zakah in islamic fiscal policy its effects on consumption saving and investment activity in the country saving and investment activity in the country

*in order to give a good understanding of traditional economics a firm knowledge of relevant shari ah subjects quantitative methods and other analytical techniques and modern technology relating to the science of economics and to prepare the graduates for the market requires inclusion of a large number of subjects in the curriculum
*these are international institute of islamic economics international islamic university islamabad pakistan kulliya of economics international islamic university malaysia department of economics faculty of shari ah imam muhammad university riyadh saudi arabia and department of economics imam saud university tehran iran

*the program of iiie appears to be the most intensive in the sense that it requires completion of credit hours
*table s tructure of undergraduate programs a comparative s tatement except for imam sadiq university all programs are of four years duration after higher secondary school level

*the program of kulliya of economics iiu malaysia is more traditional in the sense that it follows the usual work load that is in vogue in most of the western university which is in the range of credit hours
*again the reason seems to be that the program is heavy on the technical side from the very start which the madrasa students with very poor background in this area find difficult to live with

*new proposed structure of undergraduate programs in islamic economics in the light of the above remarks we have attempted to design a slightly modified program for undergraduate teaching in islamic economics
*in this regard it should be remembered that since the degree to be given is in economics it should not be dominated by shari ah subjects

*degree program in islamic economics
*table proposed structure for a b

*subjects credit hours public finance international economics economic development and planning history of economics thought comparative economicsystem contemporary islamic economics economic survey of muslim countries com lementary subjects statistics statistics ii basic mathematics mathematics for economists introduction to computers optional subjects five six courses to be selected as follows

*the same two models ie shari ah dominance in the programs of imam muhammad university and ummul qura university and dominance of economics in the program of iiie are observed
*graduate programs graduate programs in islamic economics have been stated in iiie and faculties of shari ah at ummul qura university makkah and imam muhammad university in riyadh

*the diploma in economics for shari ah graduates will be very useful in assimilating madrasa students in the degree progra miss they may be required to complete this diploma before entering the degree progra miss this will also be useful for shari ah experts teaching fiqh courses to economist or involved in research on contemporary economic proble miss these diploma programs will go a long way in bridging the communication gap that presently exists between economists and fuqaha
*therefore one has to settle for short training programs of weeks duration and hope to create interest among the participants to further increase the knowledge imparted within that limited period on a self study basis and or through follow up courses

*comparative economic systems summer summer will be required only for deficiency courses in language or other subjects if any
*table list of courses for a one year diploma in shari ah for economic graduates first term

*since this program is meant for senior officers the need for similar programs for middle level management of islamic banks is still there
*a beginning was made in this regard by the international federation of islamic bank which established an international institute of islamic banking and economics in cyprus

*annexure c curriculum for the undergraduate program at imam muhammad university riyadh saudi arabia i semester ii semester course title no

*or french arabic conversation conversation english or conversation english or french french physical training second year tafseer tafseer islamic history islamic history i aqeeda a eeda logic fiqh fiqh arabic grammar arabic grammar arabic conversation arabic conversation grammar english or french grammar eng
*o f credits credits first year tajweed qur an i islamic history islamic history i aqeeda a eeda logic logic fiqh fiqh arabic conversation arabic grammar grammar eng

*arabic conversation i arabic grammar grammar english or arabic conversation i french principles of economics grammar en g

*ariff mohammad monetary policy in an interest free economy nature and scope in mfei
*a monetary and financial structure for an interest free economy institutions mechanism and policy in mbi

*muhammad islamic land tenure system islamabad international institute of islamic economics forthcoming

*annexure list of topics covered in senior officers training program in islamic economics doctrines and their practical application conducted by irie s

*economic rationale of the prohibition of interest and virtues of an interest free economy

*islamic theory of public finance and principles of taxation in an islamic economy
*extension lecture on islamization of evening lecture commercial banking in pakistan

*conclusion in this paper we have described the major teaching training programs in islamic economics provide some comparative assessment and most importantly identified some of the areas where improvements in the existing programs are needed
*attempt has also been made to identify areas where new programs are required to meet pressing needs

*usul al fiqh ii usul al fiqh iii fiqh al muamilat al maliyya fiqh al muamilat al maliyya ii iii arabic arabic fourth year advanced micro economics
*english reading i english reading ii english grammar i english grammar ii english composition i english composition ii second year arabic iii

*of islam research methods for social research project scientists usul al fiqh iv fiqh al muamilat iv alternatively the pakistan economy alternatively project evaluation total credits in years i total subjects in ears i
*finance economics history of economic thought readings in economic system

*degree in kulliyyah of economics international islamic university malaysia i term ii term course title no

*before i go to the core of the subject i would like to make a couple of points which are well known to you but which it is important to put on the record in any discussion of the teaching of islam or various branches of islam islamic economics being one of those
*if we talk about various sources of knowledge in general humanity depends on human experience ie the sources of knowledge whether we seek them through research through our own thinking or through observation

*the second sources of knowledge which as i mentioned we acquire through various methods comes next to that prime knowledge which we consider to be perfect unalterable and applicable to all places as well as to all science

*this is another practical consideration and because of this in teaching islamic economics we have to prepare students in such a way that after they receive their education they have enough knowledge to do enough theoretical work that gives them good employment opportunities and at the same time he able to reconstruct economic theory in the light of islam
*madrasa education is usually conducted in arabic or in the local language which so called modern education is in either the local language or in english

*one of the things which i have tried to accomplish in the paper is to compare three major programs which are currently in effect in the field of islamic economics one at the international university at islamabad the second at the international islamic university malaysia and the third i must say university in iran
*question how can we reconcile islam and economics from the point of view that we cannot conceive matter without idea or spirit without matter how can we reconcile these two from an islamic perspective munawar iqbal i think that islam deals with real problems islam is a very practical religion

*iqbal has already demonstrated a missionary zeal for promoting the study of islamic economics and in the course of his lecture he seemed to suggest that epistemology should also be incorporated in the teaching of economics
*it arises either because of the lack of effort on the part of human beings the mismanagement of resources or the mismanagement of their wants

*we want to give them a further knowledge in the shari ah and at the same time give them the necessary knowledge in economics so that they can appreciate modern problems and economics
*the scheme that i have suggested is only one proposal ie it is only one model of the subject

*now what will happen when islamic economics is introduced in my college or university shall i have to teach islamic economics are the madrasa teachers experienced in islamic economics shari ah fiqh etc will they teach economics or will teachers like ourselves teach islamic economics f we are to teach islamic economics at this level we should have the opportunity to learn newly the shari ah etc
*munawar iqbal i answered this question in my lecture but this gives me an opportunity to reemphasize this issue because this is perhaps the most critical part in teaching islamic economics

*question engineer muslihuddin s there any scope for the study of islamic economics at the university level by those who have neither a background in the shari ah nor in economics munawar iqbal of course the seeking of knowledge is open to all and this does not only apply to islamic economics

*a shari ah specialist must pay more attention to the contents of the contract not to the appearance of the language used in the terms of the contract and in setting the conditions of the contract
*has there been any effort made to evaluate this experience in order to consider what steps we can take in the future i believe that now is the right time to make such an evaluation of our past experience in order to be prepared for taking wider steps in the future

*so i would ask you whether you have any proposal as to how to overcome this comparative disadvantage amongst teachers students and researchers in this country in studying teaching and carrying out research in islamic economics munawar iqbal there are two things which you have to do and which many other countries also have to do

*the job situation is very very important and i did not mention in my speech that while designing a course in islamic economics we as teachers have to keep in mind that we are not only training manpower but we also have to ensure that there are jobs for them in the marketplace

*question abdul awal sarkar if we merge the modern education system with the islamic education system then the main problem of education might be overcome successfully do you agree munawar iqbal there cannot be any doubt about what i mentioned regarding the difficulties of our education system

*therefore i request that the appropriate expertise be made available to the relevant departments at the islamic university such as islamic studies department the fikh department the shari ah department finance department and the management department where economics is an important subject
*why is this so when we ask we are usually told that they want such courses taught but that they do not know how to structure them or what type of content there should be or what types of books should be used

*i also wish to thank the brothers and sisters who have very kindly cooperated with us in conducting this seminar and i also take the opportunity to thank once again the idb and the islamic foundation for giving us a chance to listen to distinguished speakers so that we in bangladesh can learn about islamic economics which is being studied all over the world

*we have another meeting tomorrow at am this session s main topic as i see from the program is workshop on empirical research in islamic economics
*first we should have some discussion on whether we really need empirical research on islamic economics

*what are the areas are we going to deal with topics like irrigation development in bangladesh on the environmental problem in bangladesh are we going to deal with one special thing such as the role of interest or riba or the distinction between the traditional banking system and the islamic banking system or between growth and equity in islam and the traditional system i would like to start a discussion on this
*thirdly how do you go about it how do you go about empirical research who will do it is it the individual person is it the institution is it idb the islamic university departments of economics or international organizations who will do this research we should also like to have some discussion on this

*there are many things in islamic economics that we have taken from revelation and we need to see empirically what the results of their applications are for example we were told that changes in morality and in the position on morality would affect the consumption function on the micro level and then on the macro level but that is yet to be proven
*everyone can say that it is not important and that it is not going to affect any theoretical analysis ie that it will affect neither the macroconsumption function nor the macroinvestment function

*although it is not stated in the title of the study itself the study was interested in finding solutions from the point of view of islamic economics
*therefore regarding the empirical application of zakah perhaps we need to show that al akhlaq morals have many areas of coverage and when we show that empirically we may be able to come to some agreement with the policy

*secondly regarding the areas of research we need research in money and banking the firm the behavior of the firm consumer behavior international economics and almost everything in economics
*others say that since the rate of interest does not mean the elimination of a rate of return to the saver saving will not go down

*if say in the banking sector one of the criteria for judging the performance of a bank is the leverage ratio or the equity ratio that may not be relevant for the evaluation of an islamic bank

*for example if a change in economic policy took place in an islamic country what would be the impact of islamic norms on the outcome of this change a zulm or injustice parameter of certain policy change may be estimated in a baseline research

*munawar has suggested the research areas include the following the impact of different modes of financing on customers how the accounting system should be looked at in the existing financial system the application of the islamic shari ah to the real estate and the accounting policy
*once you show what these policies are doing in terms of human welfare you are creating public opinion for policies and policy change creates grounds for empirical research you then can get another set of data and see the policy change and the impact of this sort of policy change

*if i do not have a baseline and go on collecting data on a regular basis how will i know what the policy is what the government pronouncements are and of what they are doing in fact is having an impact on the economy so this cross section with the purpose of creating a baseline is i believe a good project if you can get the funding

*what the consumption function would be at the micro level perhaps or at the macro level at the most sophisticated level you can have a full scale model consisting of many relations in order to see how far it can be accepted on empirical grounds
*sayyid tahir thank you mister chairman dear sisters and brothers assalamu alaikum wa rahmatullah wa barakatuh my background is mostly in theoretical studies so i will try to stretch my imagination and make a few points on the possibilities of empirical research in the area of the islamic economy

*how will be islamic businessman or entrepreneur or producer have what will the objective function be what will be maximize or minimize or whatever we find this basic kind of research in all the areas of consumption you are all aware and the emphasis is on moderation and non iraf etc

*as far as funding is concerned if you want to do the real work do not accept funding because funding means that the funder has to be not always an understanding of the type of work you are doing and its importance and you may end up distorting what you really want to do if there is some funding available

*comment one point that arises in my mind regarding islamic research is that you mentioned that one maulana was included in your team because you thought that you actually did not have an islamic background that is that you did not have a knowledge of the shari ah and islamic theology

*as a matter of fact what we teach at the university level is the result of research and these days most of what we are teaching is wrong
*we have to undertake regional research on serious matters in order to get the correct information to teach our students

*we must point out the problems of empirical research because if we cannot determine the problems that we are facing in the modern anti islamic society then we will not be able to engage in empirical research
*they can supply the books to all universities in muslim and non muslim countries so that we can make it clear that muslim nations have an islamic economy and muslim students can have the scope for further research work

*therefore i would like to suggest that research centers somewhere in the muslim world should assume the responsibility for research in the muslim world and then whenever and wherever muslim students or researchers need survey materials they can contact this center in order to get the appropriate data
*so we know how to take hypothesis or assumptions how to look at them and how to determine which one foils and which one can be proved to be right

*there are several studies that have been done by graduate students in saudi arabia at the university in makkah and others that are in my own opinion also valuable because they are trying to select those elements which make a difference and they are always comparative

*the islamic university of islamabad for example has empirical research on banking and there are some empirical research projects in the islamic economic research bureau at bangalore on islamic banking etc
*when a person wants to run a model he needs the parameter value and parameters are most of the time difficult to evaluate because of lack of data

*munawar iqbal the point i made was that from an empirical point of view the majority of the work the women do is in the household because of the comparative advantage
*even in those societies which permit women to do anything they want if you collect empirical data on the kind of jobs which women do you will find that they are doing a job which relates to the household such as baby sitting nursing teaching etc

*if we know that on the same subject there are five different institutes or that five different people are working on it
*we have to take a consensus between them since the sources available to the discipline of islamic economics are limited

*can we take the matter of curriculum first and after we can move to the question of manpower and then teaching materials
*anas zarqa to contribute his ideas anas zarqa this panel discussion is directed to address important topics meant for department of islamic economics

*the development of curricula for islamic economics and the opening of islamic economics departments in the universities of bangladesh depend upon whether islamic economics will be introduced as one of the compulsory alternative or elective papers at the degree or master s level in the university and its affiliated colleges through their respective departments
*supply of textbooks and library tables available both to teachers and researchers and the reorientation of faculties that may be provided to teachers to enhance their teaching

*the teaching of islamic economics at the university level and the establishment of islamic economics departments requires the recommendation from the ministry of religious affairs to the ministry of education
*insofar as the teaching of islamic economics at the university level in bangladesh is concerned it may be introduced as an alternative paper that is only one paper carrying marks in bs ba honors and ma or ms classes

*to such an august gathering probably the first of its kind in bangladesh i intend to speak first on the potentiality of the islamic economic system then a few words on framing the curricula on islamic economics for the university level and finally i will try to put forth some suggestions or recommendations for making the program a success
*as a result people are now experiencing the bitter failures of the two economic syste miss this is why all over the world people are now eagerly awaiting an economic system which will save them from these two syste miss people now want relief

*while taking part in the discussion a few days ago abu ahmed of dhaka university who is at present the honorable chairman of this session and the respected teacher mohammed abdul hamid who is now vice chancellor of the islamic university told us that they tried to introduce islamic economics at the university level but that they had failed miserably because of the resistance or noncooperation from a group of their colleagues

*some seminars should be organized from time to time at the divisional and strict headquarters level in order to create awareness on the applicability of the principles and institutions of islam in solving the problems faced by the community
*farouq from patuakhali college it would have been better if the topic of this discussion the development of curriculum for islamic economics and establishment of islamic economics departments at various levels had been given to us earlier so that we could have had more time to think about it

*i think something must be done before the university level because if students from the primary and secondary levels have this subject at the graduate and postgraduate levels there must be preparation for them to receive the teaching at the graduate and postgraduate levels
*i must say that i am speaking only in the perspective of bangladesh but i think that in all muslim countries the stages of education are similar and therefore i think you can have a clear idea of what i am saying even though i am speaking only in terms of bangladesh

*regarding the problem of manpower in the first instance we should be able to teach something because we have been able to learn something and it has even been possible for us to sit together for give and take

*the problem instead is that of research work and students who are going into research must be selected by the universities on the basis of their knowledge of the materials
*the committee should comprise i think people from the shari ah from the madrasah from alia madrasah and from other economics

*i would at this point like to raise a question related to strategy namely how can we introduce an islamic economics teaching program now so far we have been thinking in terms of introducing a separate department of islamic economics at the university level but we should give some thought to how far this is going to serve our purposes

*these materials must be circulated to the departments of economics of all universities along with some guidelines or some insistence on the part of a certain authoritative body to make them an integral part of the teaching of economics

*now i just want to say a few words not as chairman but as a participant about the strategy of how to introduce islamic economics or make islamic economics a part of the department of economics
*this effort should be made jointly by several universities or by someone teaching economics in a center of economics in a university or even outside of a university but in academic circles

*this would be easier and i propose that the recommendation committee of this seminar be sent the recommendation that islamic economics should be introduced at the lower levels and that the government should take the initiative at the first available opportunity
*they turn to the west for everything and if given money they will support even islamic economics no matter whether they believe in it or not

*we are learning by listening or by doing but the main purpose is to have the teaching of economics from the islamic point of view at the university level
*khan has the added advantage of knowing about the islamic way of thinking within the field of economics as well as possessing the skill of a standard traditional economist

*it is also for your knowledge not all of you may know that a journal for research in islamic economics is published by king abdulaziz university s center for islamic economics has been for a number of years listed in the journal economics literature of the american economic association because they recognized islamic economics as a valid discipline

*with this i conclude and suggest that probably after the seminar we can sit together and draft an outline of an action plan regarding the developing of curricula for establishing the discipline of islamic economics

*you can argue that since we have the right to introduce socialist economics on the principle that it is an elective by the same token we should be able to introduce islamic economics as elective courses at the university level or at the graduate level
*we can establish a school or college under private management and islamic economics in a university in bangladesh in particular or in another country

*lectures should be given in order to orient people to this subject and ulemas and other learned people should talk about islamic economics in public so that people become aware of the necessity for it
*if you want to know the shari ah from the text and if you want to learn about the research work currently undertaken in saudi arabia and other countries you must know arabic well

*when the indian government can give six or seven hundred scholarships to bangladesh why is it not possible for the institute in islamabad to give scholarship to muslim boys who want to study islamic economics there i do not find this logical at all
*however if you submit a book to the bangla academy for publication it will take at least three to four years unless you are someone whom they like in which case your book might be published in three weeks time

*sirajul haq at the islamic university of bangladesh we have a course at the honor s level which is called islamic economics but it is optional and the premises that no one is offered to teach it and we do not have enough reading materials
*from now on think a circular should be circulated among our universities or institutions informing people that scholarships are available at islamabad university because that is very important for bangladeshi students

*so if we try to inshallah circulate this announcement then some of the students will through the preparation of dissertations become reasonably competent in islamic economics and they will be the teachers and researchers of the future
*this may i think even be accepted by teachers who may not be terribly keen to introduce islamic economics but who would not like if one of their students is doing his ph

*it is like when the economics of socialism was introduced in bangladesh as one of the fundamental principles of state policy as socialism was one of the pillars of state policy
*i would not say that this environment has not changed at ali because we have at least been able to introduce islamic economics as a part of secular economics where we have been teaching the history of islamic thought at the ma final level

*as regards manpower we need competent people to teach islamic economics and i think that this kind of conference or seminar should be held more regularly so that people trained in the secular line can be oriented towards islamic economics and can very easily learn islamic economics because more or less the same technique is applied to learning islamic economics and the same methods are applied to teaching it
*however if people are trained through the medium of english along with an orientation in bengali they will be able to find jobs not only in bangladesh but also in other countries

*the group has collected syllabi from various universities of the world of islamic economics and has sent out a draft copy to distinguished scholars of different universities for their opinion
*if the organizers have thought this way then i beg to differ with them because there are three or four islamic newspapers in the country now which would have been pleased to report on this seminar

*so i would like to request the organizers to include the recommendation that the government order school boards to introduce islamic economics at the school college intermediate and university levels and to introduce islamic economics as a part of general economics at the graduate honor s and master s degree levels
*we have also published special papers on the distribution of wealth in the islamic system and on islamic insurance based on a special seminar on the subject

*so it is a good point that if islamic economics is not taught in the economics department it can alternatively be taught in the finance management accounting or business studies departments

*one of the problems is that we do not get the or thousand taka most of the time because we do not finish the research
*brother rahim i would like some information about the center of association for islamic economics which financially supports potential researches who are writing about topics related to islamic economics or developing an islamic curriculum

*there are in fact two programs one is an external research program in which we ask scholars to do research for us on a topic selected by us the other is an encouragement and promotion program
*so anyone who is interested in this program should inform us that he is doing research in such and such an area and describe his proble miss we would like to help

*i would like to request the chairman to arrange that the concluding session be chaired by a personality in the government of bangladesh so that we can address all of these things
*there was a proposal sent by the university grants commission ugc about research in islamic banking in bangladesh by some brother and some institution

*the irresistible tide of golden age of islam flooded all the directions since the first half of the th century the wave of which touched the regions of sandvip and chittagong situated in the eastern outskirts of bangladesh
*assalamu alaikum i feel myself fortunate enough and express my deep gratitude to almighty allah as i could attend this long desired seminar organized jointly by the government of bangladesh and islamic research and training institute of the islamic development bank jeddah saudi arabia

*this was the outcome of european renaissance internal conflict of christianity discovery of new lands infiltration of europeans in the latin america africa and asia and establishment of their empires industrial revolution of europe and expansion of international trade

*though there is economic system and development strategy within the frame of islam which is more welfare oriented for the people of all strata than the so called laissez faire economics and socialism unfortunately it is observed that there is a trend of avoidance of this ideal system of economy on various pleas such as reactionary and re advent of mediterranean religious madness etc

*as a result a social system will emerge which will help reduce the disparity between the rich and the poor establish a sense of mutual sympathy and humanity which will bring happiness and welfare for the muslims in particular and the mankind in general

*on the opening day we expressed the hope that the seminar would open the door to a new strategy for economic development based on the islamic principles of justice moderation and fairplay
*i welcome the special guest of this function the hon ble minister of state in charge of the ministry of religious affairs alhaj professor m

*it is an honor for me to address you today on behalf of the islamic research and training institute of the islamic development bank jeddah on the occasion of the concluding
*finally i invoke allah s mercies on our prophet pbuh and i want again to welcome you all and pray to allah bestow his blessings to all who directly or indirectly contributed to the success of the seminar

*the islamic research and training institute of the islamic development bank is making efforts in this direction by conducting research within the irti by mobilizing researchers outside the institute to do research by organizing seminars in various parts of the world and by collaborating with various institutions in the muslim and non muslim world in various schemes that aim at promoting research and training in islamic economics

*i am sure this seminar has motivated the participants enough to go back and see how they can incorporate the development in the field of islamic economics into their own courses on economics in their respective universities the motivation and inspiration acquired in the seminar is also reflected in the recommendations that the participants have made which relates to teaching and research in islamic economics

*mister chairman of this concluding session of the seminar on the teaching of islamic economics at the university level and the chief guest of this concluding session the hon ble religious affairs minister professor m
*we are very thankful to him for the energy he has extended and for his dedication in organizing this seminar

*but still he found the time to attend this seminar and i want to particularly mention that the ministry of education has had the responsibility for the implementation of this seminar
*so we want a department of islamic economics to be opened at least in the islamic university of bangladesh as early as possible in the next academic session

*since knowledge in shari ah and arabic language is essential to promote research in islamic economics it is recommended that organizations like islamic research and training institute of the idb and the center for research in islamic economics of king abdul aziz university may come forward to sponsor diploma certificate course in arabic language through such bodies as the islamic foundation bangladesh universities of bangladesh and also the islamic economics research bureau of dhaka

*in order to introduce teaching islamic economics at the university level as a preliminary step books in islamic economics in bangla should be published and made available to the general readers
*the institutions like islamic research and training institute irti international islamic universities in kuala lumpur and islamabad should take initiative and cooperate with each other to develop curricula and prepare teaching materials

*it is also charged with the responsibility of assisting in the promotion of foreign trade especially in capital goods among member countries providing technical assistance to member countries extending training facilities for personnel engaged in development activities and undertaking research for enabling the economic financial and banking activities in muslim countries to conform to the shari ah

*participation in conferences and seminars participated in many conferences and seminars as a researcher and commentator in various areas of islamic economics
*present occupation economic researcher in the islamic research and training institute irti of the islamic development bank idb


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== DOCUMENT WORD ANALYSIS ==
=== Main Category ===
: AlHuda Material\islamic economics


=== KeyWords ===
islam econometric banker economi research muslim universal rate income public zakah developed invest shariah function countries social resource import consumable



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== DOCUMENT REFERENCES ==


=== Number of Pages ===
343


=== Published Date ===
2007-01-09 11:07:40


== Full Document ==


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[[Category:Islamic Finance]]

[[Category: Islamic Economics]]