ISLAMABAD, Feb. 16: Prof Khurshid Ahmad, Chairman of the Institute of Policy Studles, said here today that the Muslim economists and financial experts have a consensus on the fact that Islam certainly has an alterna- tive monetary and fiscal system which is viable and economically better than the existing system. At a Press conference here to- day he circulated his report based on monetary and fiscal economics of Islam, on which a seminar was held here in early January at Islamabad. He said most of the Islamic economists and financial experts were of the view that an effort to establish the Islamic economic order, however, would require restructuring of the entire Society and transforming the whole social milleau.
There is near unanimity that the objectives of socio-economic justice and greater stability in the value of money are funda mental to the structure of Isla mic economy Growth objective, though important, had to be con- strained by the norms of social justice and a regard for future generation. The emphasis will shift from the rate and volume of growth to its composition and justice orientation.
red sale and leasing, which the Council itself accepted only re luctantly, could be utilised meet certain partial needs, cannot provide a comprehensive alternative.
But Prof Khurshid said that Isla mic economic system stands for total change, although it would have to be achieved through pro- perly planned and phased re- forms, each piece fitting into the overall scheme, each part supple- menting the other and finally completing the mosaic.
OTHER ISSUES
The seminar also discussed number of other issues which in- clude questions like project eva- luation, non-interest pricing of capital, general equilibrium and. stability condition, provision of consumer loans, various instru- ments of monetary policy, so on and so forth. In this respect the seminar explored some new vistas and enhanced the horizon knowledge in these fields. It also brought to sharp focus some areas where new work is needed which include operational and institu tional aspects of profit-sharing, and the problems of indexation and credit creation.
Unanimity existed on the type of the institutional framework re quired for the Islamisation of the economy. The participants empha sised the need for substantial structural changes in the econo mic institutions of the country in order to make the new system ef fective and successful. There is almost near consensus on the sug gestion that profit-sharing has the potential to be the centre of the new system with some peripheral measures to supplement it.
He said, as regards strategy, it was maintained that the ap- proach should be gradual but not over-cautious. The view that Riba cannot be eliminated without the
abolition of private Ownership
and control over the means of production was rejected. A lot of appreciation was expressed for the report of the Council of Isla mic Ideology on the elimination of interest. However, some im- portant qualifications and exten sion were added. The general feel- ing was that the profit-loss-shar- ing system can be viable alterna- tive to the present system. Cer- tain other alternatives, for exam- ple, investment auctioning, defer
The most challenging aspect of the contemporary Islamic resur- gence is to develop various as- pects of Islamic economic sys- tem, Muslim economists and ban- kers are trying to grapple with this challenge. So far one confer ence and two seminars have been organised. The most recent of these was the seminar on mone- tary and fiscal economics of Is- lam held in Islamabad during January 6-10, 1981. It was atten- ded by around eighty prominent economists and bankers from twelve countries. Ten papers dea- ling with various aspects of mone tary and fiscal economics of Islam and three reports about the theory and practice of interest free banking were presented and discussed. An effort is being made- in this report to recapture major points of discussion share its insights with those who could not participate in it.
Prof Khurshid Ahmad recalled that in his inaugural address Pre sident Mohammad Zia-ul-Haq had raised quite a few questions which are pertinent to the sub- ject.
