Understanding Islamic Finance - Doha Academy of Tertiary Studies

Distinguishing Features of the Islamic Economic System 29of currency. In the ninth century, the growth of wealth and commercial transactions was sogreat that actual cash could be seen changing hands in the smallest townships where, hitherto,simple barter had been the only method in use. And so the enlarged area of money circulation wasmatched by a greater power wielded by town over country.”Referring to the fall of the Muslim world he says:“(it) received a mortal blow in the form of the crises, the disturbances, the invasions of the secondhalf of the eleventh century. They impeded the powerful flow of trade, thereby provoking thedecline of the cities. Henceforward the Muslim World was not a united whole, but divided. Therewas a Turkish Islam, a Persian Islam, a Syrian Islam, an Egyptian Islam, and a Maghreb Islam.Gone was the single Muslim civilization and in its place was a resurgence of regional particularisms,embodied in a number of different Muslim civilizations. (pp. 10, 11)However, even during its economic decline, the Muslim World long continued to influence theworld in the realms of science, medicine and philosophy. It played a conspicuous part in medicineespecially, not only during the Renaissance but right up to the nineteenth century.” (For detail, seepp. 236–239).After the start of the Renaissance movement in the late 19th century, Islamic economicsstarted re-emerging as an intelligent academic pursuit. Scholars like Syed Qutab, Syed AbulA’ala Mawdudi, Hifzurrehman Sweharvi, Muhammad Yusufuddin, Syed Baqar Sadre, andDr Hameedullah can be considered pioneers and scholars of the first generation in theModern World who initiated the process of defining modern economic thought in the lightof the principles of Islam. Formal work on Islamic economics in the modern world that hasled to a vigorous revival of Islamic economic thought has been done by a large number ofeconomists, notable among which are Anwar Iqbal Qureshi, Ahmad al Najjar, NejatullahSiddiqi, Sheikh Mahmud Ahmad, Mahmud Abud Saud, Muhammad Umar Zubair, MonzarKahaf, S.M. Hasanuz Zaman, Anas Zarqa, M.A. Mannan, Mohamed Ali Elgari, M. UmerChapra, Abbas Mirakhor, Mohsin S. Khan, Fahim Khan, Munawar Iqbal, Khurshid Ahmadand many others.Contemporary Islamic economists (of the second and the third generation) have discussedalmost all areas of modern economics including market forces, production, distribution,consumption and allocation of resources, efficiency, scarcity, choice and opportunity cost,the role of money, individual–society–State relationships, individual self-interest, the welfareeconomy, mutual help (social welfare function), ethics and, last but not least, governmentbudgeting and finance and the economic responsibility of the State.Considerable work has been done by well-known economists including Mohsin Khan,Abbas Mirakhor, Zuber Iqbal, Nejatullah Siddiqi, Anas Zarqa, Monzar Kahaf and otherIslamic economists of the second and third generations, as mentioned above, on varioussegments of economic management. These works largely pertain to interest-free bankingand interest-free investment and production. Also, a good deal of work has been done onfiscal policy, Zakat, auditing and accounting, banking regulations and supervision.But all of these are segments and have not been put together into a comprehensive model.These segments (with variations) are being practised/implemented in several countries.However, even in the contents and implementation of these segments, there is a lack ofuniformity. This is yet another problem which needs to be addressed both at scholarly andoperational levels.The work is being done in different areas. But, Islamic economics in the form of acomplete model and a welfare function may take a longer time. It is obvious that where valuejudgements are involved, quantification, and hence uniformity, is not possible, with clear