Islam And The Challenge Of Economic Development

ISLAM AND THE CHALLENGE OF ECONOMIC DEVELOPMENT

CHALLENGE OF ISLAM

Indonesian observer and published in the book

5-7 February 1979

Prof. Khurshid Ahmad

Prof. Khurshid Ahmad, Federal Minister and Deputy Chairman, Planning Commission, has -underlined the importance of evolving a development strategy in an Islamic framework for the ‘moral, spiritual and material development of the individual and the society leading to maximum socio-economic welfare and the ultimate good of mankind’.

In a an article entitled ‘Islam and the Challenge of Economic Development’ included in a book the Challenge of Islam’ edited by Altaf Gathar and published recently by the Islamic Council of “Europe, London, Prof, Khurshid has warned that no economic model which is not in conformity with Islamic values will be appropriate, let alone successful, in the regeneration and reconstruction of the economy of the Muslim countries-.

He has stressed that the Islamic development economics must be rooted in the precepts embodied in the Quran and Sunnah. Only in this way would the development of man be in accordance with the material advancement of Islamic society and a balance being maintained between the ideological, political and economic values, he remarked.

The paper provides an outline of Islamic theory of economics and unfolds arguments in favour of adopting economic development as a goal-oriented and value—realizing activity involving a confident and all- pervading participation of man in the process of upliftment of the society.

ISLAM AND THE CHALLENGE OF ECONOMIC DEVELOPMENT

By Prof. Khurshid Ahmad

A major challenge confronts the world of Islam: the challenge of reconstructing its economy in a way that is commensurate with its world roles ideological, political and economical. What does this demands economic development with a view to “catch up” with the industrialized countries of the west? Capitalist or Socialist according to one’s inclination and sympathy, or politico-economic dependence? Or does it demand total socio-economic reconstruction in the light of a basically different model, with its own set of assumptions, ideals and growth-path, something that would be unique and value-specific?

The Muslim countries suffer from widespread economic under­development, i.e. non-utilization and/or -under-Utilization of human and physical resources with consequent poverty, stagnation and back­wardness. “Even those countries which are resource-rich, the state of their economies remain predominantly under-developed. There are gross structural deformities within the economies of the Muslim countries whatever development is taking place is contributing, inter alia, to the aggravation of these deformities. Most of the Muslim countries have been unable to internalize the engine of growth. Their economies are dependent on the Western countries in a number of ways – for the import ^ of foodstuffs, manufactured goods, technology, etc. on the one hand, and for the export of their primary products on the other ¹.

The paradox of the Muslim world is that it is resource-rich but economically poor and weak. Development planning has been introduced in a number of Muslim countries. In some, the art is now at a fairly advanced level. Nigeria, Egypt, Syria, Algeria, Iran, Pakistan, Malaysia, instances in view. But in almost all these countries development effort is modeled after the prototypes of growth developed by the western theorists and practitioners of-planning and “sold” to the planners in the Muslim countries via international diplomacy, economic pressurization, intellectual mobilization and a number of other overt- and covert means, whatever be the source of inspiration – the Capitalist economies or the west or the Socialist models of Russia and China no export worth the name seems to have been made to re-think the basic issues of development economies in the light of the ideals and values of Islam and its world strategy.

How does this policy and the actual developments stand in relation to Islam? It would be correct to say that developmental policies have been, more or less Islam-neutral. As against this unfortunate fact, it is our submission that as far as Islam is concerned, it cannot be neutral vis-a-vis economic development. But there is no evidence to support that generally speaking, the policy makers derived any inspiration worth the name from Islam and tried to translate its economic ideals into development policies, some lip-service here and there notwithstanding. Actual policies have had no or little relation to Islam with the economies of the Muslim world have failed to be transformed towards Islam and the deformities and inequities inherited from the colonial period and beyond have been generally aggravated­. Muslim thinkers have criticized this state of affairs and have emphasized that Islam should be the main inspiration in their development thinking².

The primary task’ ox any theory of development is to examine and explain the nature of the processes of development and factors responsible for it, to identify and analyze principal obstacles to development in a given situation, and to try to prescribe the most desirable and the most efficient ways and means to remove those obstacles and achieve various dimensions of economic development.

It can hardly be over emphasized that such an effort must be made with academic rigor and scholarly detachment. Nonetheless, it would be idle to assume that this theorizing can take place in a climate of so-called positivistic objectivity and of complete value-neutrality. Most of the economic thinking that masquerades as value-neutral turns out, on closer scrutiny, to be otherwise. The result of this approach, however, is that its value-assumptions remain apparently hidden. They remain implicit, and as such, are

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Both are irrelevant to our situation, not because of the differences in ideological and moral attitudes and in socio-political host of more mundane and economic reasons, like differences in relative resource bases, changed international economic situations, bench-mark differences in the levels of the respective economies, socio-economic costs of development, and above all, for the fundamental fact that the crucial developmental strategy of both the systems – industrialization primarily through maximization of investible surplus – is not suited to the conditions of the Muslim world and the demands of the Islamic social ideals⁷.

Development economics is presently passing through a period of crisis and re-evaluation. It is coming under attack from a number of directions. An increasing number of economists and planners are becoming skeptical about the whole approach of contemporary development economics ⁸. There are others who consider the application of a theory based on Western e:xperience to a different socio-economic situation, as is being done in the less developed countries, inappropriate and even injurious to the prospects of development⁹. There are others who are critical of the tools of instruments of development planning and regard the alleged sophistications and mathematical refinements as pseudo- scientific inasmuch as they contain elements of simplification, abstraction and even falsification¹⁰. There are still some others who are becoming disenchanted with the very idea of growth – some because of its socio-economic and ecological costs¹¹, and others because they have begun to see the limits of growth¹².

In the light of this and other considerations, it can be suggested that the state of development economics today is not a very healthy one ¹³. We, therefore, suggest that the central ideas of development economics and its suggested remedies deserve to be re­examined. A much more critical approach deserves to be adopted towards the panaceas that have been ‘sold’ to the Muslim countries.

The above submission spell out some of the negative aspects of our approach, that as, what an Islamic approach to development should not be. Ch the positive side we submit that our approach should be ideological and value-oriented. In development economics as in economics – or in any branch of human activity, there is an area which deals with technological relationships. But such technological relation­ships per sp are not the be-all and end-all o±’ a social discipline.

Technological relationships are important and they should be decided according to their own rules. But technological decisions are made in the context of value-relations. Our effort is to weld these two areas and to make our values explicit and to assign to them the role of effective guide and controller for the entire system, ^his means that as against an imitative stance, our approach must be original and creative. It is only through a. thorough understanding of the social ideals and values of the Qur’an and Sunnah and a realistic assessment of our socio­economic situation – resources, problems and constraints – that we can adopt a creative and innovative strategy for change. As such, our approach would be ideological as well as empirical and somewhat pragmatic – pragmatic not in the sense that ideals and values can be trimmed to suit the exigencies of the situation, but pragmatic in the sense that ideals and values are to be translated into reality in a practical and realistic way.

Islam stands for effort, struggle, movement and reconstruction – It is not merely a set of beliefs. It also provides a definite outlook on life and a program for action, in a word, a comprehensive milieu for social reconstruction. We would, therefore, conclude this section by submitting some basic propositions about the dynamics of social change as they reveal themselves by reflection on the Quran and Sunnah. They also provide some indicators for goals of socio-economic policy.

1. Social change is not a result of totally pre-determined historical forces. The existence of a number of obstacles and constraints is a fact of life and history, but man is not subject to any historical determinism. Change has to be planned and engineered. And this change should be purposive – that is, sustained movement towards the norm or the ideal.
2. Man is the most active agent for change. All other forces have been subordinated to him in his capacity as God’s vicegerent (khilafah). Within the framework of the divine arrangement for this universe and its laws, it is man himself who is responsible for making or marring his destiny.
3. Change consists of environmental change and change within the heart and soul of man – his attitudes, his motivation, his commitment, his resolve to mobilize all that is within him and around him for the fulfillment of his objectives.
4. Life consists of a network of inter-relationships. Change means some disruption in some relationships somewhere. As such there is a danger of change becoming an instrument of disequilibrium within man and in society, Islamically oriented social change would aim at least friction and disequilibria, and planned and co-ordinate movement from one state of equilibrium to a higher one, or from a state of dis­equilibrium towards equilibrium. As such, change has to be balanced and gradual and evolutionary. Innovation is to be coupled with integration. It is this unique Islamic approach which leads to revolutionary changes through an evolutionary trajectory.

These are some of the major elements of healthy social change through which Islam wants man and society to move from one height to another. The task before the Islamic leadership, intellectual as well as politico-economic, is clearly to formulate the objectives and strategy of change along with the ways of achieving it and also to establish institutions and inaugurate processes through which these policies could be actually implemented.

ISLAMIC CONCEPT OF DEVELOPMENT

Now we would like to elaborate on some of the essential elements of the Islamic concept of development.

Economic development, according to the current literature on development, consists of a “series of economic activities causing an increase in the productivity of the economy as a whole and of the average.”

It is looked upon as a dynamic process involving structural changes which produce a significant and sustained improvement in the performance of the economy, actual as well as potential, measured usually in real per capita terms^ and which is spread over a fairly long period of time. Its substance lies in enabling people meaningfully to control their ^ economic environment, so as to improve the quality of life¹⁵.

Islam is deeply concerned with the problem of economic development, but treats this as an important part of a wider problem, that of total human development. The primary function of Islam is to guide human development on correct lines and in the right direction. It deals with all aspects of economic development but always in the framework of total human development and never in a form divorced from this perspective that is why the focus, even in the economic sector, is on human development with the result that economic development remains an integrated and indivisible element of moral and socio-economic development of human society.

The philosophic fovindati.ons of the Islamic approach to development, discussed by us in detail elsewhere ¹⁶ are as follows;

1. Tawhid (God’s unity and sovereignty). This lays down the rules of God-man and man-man relationship.
2. Rububiyah (Divine arrangements for nourishment, sustenance and directing things towards their perfection). This is the fundamental law of the universe which throws light on the divine model for the useful development of resources and their mutual support and sharing. It is in the context of this divine arrangement that human efforts take place.
3. Khalifa (man’s role as God’s vicegerent on earth. This defines man’s status and role, specifying the responsibilities of man as such, of a Muslim, and of the Muslim ummah as the repository of this Khalifa, from this follows the unique Islamic concept of man’s trusteeship, moral, political and economic, and the principles of social organization.
4. Tazkiyah (Purification plus growth). The mission of all the prophets of God was to perform the Tazkiyah of man in all his relationship – with God, with man with natural environment, and with the society and state.

We would submit that the Islamic concept of development is to’ be derived from its concept of Tazkiyah, as it addresses itself to the, problem of human development in all its dimensions and concerned with growth and expansion towards perfection through purification of attitudes and relationships. The result of Tazkiyah is falah – prosperity in this world and the hereafter.

In the light of these foundational principles, different elements of the concept of development can be derived. We would submit the following as its essential features!

1. Islamic concept of development is comprehensive in character- and includes moral, spiritual and material aspects. Development becomes a goal – and value-oriented activity, devoted to the optimization of human well-being in all these dimensions. The moral and the material, the economic and the soci.al, the spiritual and the physical are inseparable. It is not merely welfare in this world that is the objective; it is also the welfare that Islam seeks to extend to the life hereafter – and there is no conflict between the two. This dimension is missing in the contemporary concept of development.
2. The focus for developmental effort- and the heart of the development process is man. Development, therefore, means development of man and his physical and socio-cultural environment. According to the Contemporary concept: it is the physical environment – natural and institutional – that provides the real area for developmental activities, Islam insists that the area of operation relates to man, within and without¹⁶.

As such, human attitudes, incent tastes and aspirations are as much policy variables as physical resources, capital, labour, education, skill, organization, etc; thus, on the one hand, Islam shifts the focus of effort from the physical environment to man in his social setting and on the other, enlarges the of development policy, with the consequent enlargement of the number of target and instrument variables in any

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Economic Crises and Islam’s Economic’ Strategy, Lahore: Jamaat-i- Islami, Pakistan, n.d (1970). A recent doctoral dissertation makes a similar effort in the context of the problems of environmental engineering. See Hussaini. S. Waqar Ahmad, Principles of environmental Engineering System Planning in Islamic Culture: Law, Politics, Economics, Education, and Sociology of Science and ‘Culture, presented to Stanford University, California, 1971; See particularly Chapter VI. See also Siddiqui, Na ‘im, Islam ki Mizan-i-Nazariyyah-e-Maaishat (Islam’s Balanced Ideology of ‘Economics) in Chiragh-i–Rah; Socialism Number, Karachi 196? Pp. 496-525.

3.         Gunnar Myrdal -writes in Asian Drama, (op.cat. Vol.I, p.32)! “The problem of objectivity in research cannot b^ solved simply by attempting to eradicate valuations. every study of a social problem, however limited in scope, is and must be determined by valuations, k ‘disinterested’ social science has never existed and never will exist. Research like every other rationally pursued activity, must have a direction. The viewpoint and the direction are determined by one’s interest in a matter. Valuations enter into the choice of approach, the selection of problems, the definition of concepts, and the gathering of data, and are by no means confined to the practical or political inferences drawn from theoretical findings. The value premises that actually and ox necessity determines approaches in the social sciences can be hidden. In fact, most writings, particularly in economics, remain in large part simply ideological,-,-. Throughout the history of social studies, hiding of valuations has served to conceal the inquirer’s wish to avoid facing 3real issues”… See also Myrdal, Value in Social Theory, and Assays on Methodology,