Detailed Synopsis of Presentation on Islamic Economics; Investment Opportunities and the challenge of Derivatives in The Middle East

DETAILED SYNOPSIS OF PRESENTATION ON ISLAMIC ECONOMICS

Prof. khurshid Ahmad

• Islamic Economics is a nascent discipline, still in its early stages of development.
• Islamic economics represents an approach to economies, having both theoretical and practical dimensions. Although it draws heavily on ethics and Islamic law (fiqh), it is being developed as an economic discipline and NOT as a branch of law or ethics.
• While economic ideas and doctrines have been advanced by Muslim thinkers throughout the ages, last two decades have witnessed the emergence of Islamic economics as an integrated discipline, providing a new paradigm of economics, which is also being invoked to provide guidelines for economic policy-making and establishment of new institutions and organizations instrumental towards the establishment of an Islamic economic order.
• The Islamic economic approach is being presented as an alternative to the capitalist and/or socialist approaches. Practical efforts to adopt this new approach are still very rudimentary and represent a very early phase of the process of transi­tion.
• At the theoretical level it represents an attempt to integrate the positive and normative approaches into one holistic framework, not only for economic/per se but also studying the economic problem in the context of a whole social system with its own ideals and moral premises. This calls for a new methodology wherein the engineering aspects and the ethical dimensions are attempted to be integrated and not assumed to exist as two parallel streams that do not fuse together.
• There is a redefinition of the scarcity assumption, profit motivation and the principle of rationality in economics. Similarly the relation between individual and society and state has been re-examined and an attempt made to move from “I” and “They” premises to a premise of “We” where “I” and “They” get related to each other in a new equation.
• The study of “economic behaviour” remains the main con­cern of Islamic Economics, but the new discipline starts, not on the basis of an assumed concept of “economic man” as a product of a utilitarian thesis. Instead it looks upon humans as they are with multiple motivations and on the assumption that human motives are as much subject to influence and variance as behaviour itself. As such the points of influence and interven­tion cover not only the realm of behaviour but also of ideals and motives.
• In this new formulation the criterion of economic success no longer remains one-dimensional, i.e. efficiency. The new equation aims at integrated achievement of equity, efficiency and sustained inter-temporal growth with ecological balance.
• Private ownership and enterprise remain the crucial foundation of the system. Yet market mechanism has been supplemented by a moral filter operation at different levels of decision making and a limited corrective role for the state in given situations.
• A unique feature of Islamic economics is development of an equity-based economy as against a debt-dependent economy. While an active role for capital is visualized and there is no assumption of zero-return on capital, any fixed and predetermined return, as in the case of interest, is replaced by a variable return tied to actual productivity of capital.
• Economic co-operation and integration between the Islamic Ummah and its collective self-reliance is one of the policy goals, but there is no place for autarkey or exclusivity. International trade and participation in world economy from a position of self-reliance is the objective.
• The present stage of Islamic Economics is characterized by research, discussion and dialogue, teaching and initial operational experiments.
• Several hundred books and treatises and over a thousand journal articles have been published during the last 50 years.
• Around forty universities in the world are now teaching Islamic economics as a separate discipline, while two universities, Interna­tional Islamic University, Islamabad and International Islamic University, Kuala Lumpur, have developed graduate and post­graduate programmes for integrated teaching of economics and Islamic economics.
• A number of research institutions are organizing and sponsoring research in differ­ent aspects of Islamic economics. More prominent of these are:
• Islamic Research and Training Institute, Islamic Development Bank, Jeddah.
• Centre for Research in Islamic Economics, King Abdul Aziz University, Jeddah.
• Sheikh Saleh Research Centre, Faculty of Economics and Commerce, Cairo University, Cairo.
• International Institute of Islamic Economics, International Islamic University, Islamabad.
• Over 50 international conferences and seminars have been organized during the last 25 years in different parts of the world.
• International Association for Islamic Economics was established in 1986. It has a member­ship of over 300 professional economists. It also published its professional journal. Review of Islamic Economics, twice a year.
• Research on Islamic economic themes now occupies a respected position in the research programmes of a large number of American and European universities. Five to ten M.Phil or Ph.D. dissertations are being produced almost every year.

ISLAMIC FINANCIAL INSTITUTIONS

AUSTRALIA              Islamic Investment Company, Melbourne.

BAHAMAS                 Dar al Mai al Islami, Nassau

Islamic Investment Company Ltd., Nassau.

Masar Faisal Islamic Bank & Trust, Bahamas Ltd, Nassau.

BAHRAIN                  Albaraka Islamic Investment Bank, Manama

Bahrain Islamic Bank, Manama.

Bahrain Islamic Investment Company, Manama.

Islamic Investment Company of the Gulf

Masraf Faisal al Islami, Bahrain.

BANGLADESH                      Islamic Bank of Bangladesh Ltd., Dhaka

DENMARK                Islamic Bank International of Denmark, Copen­hagen

EGYPT                                   Albaraka Nile Valley Company, Cairo

Arab Investment Bank (Islamic Banking Opera­tions, Cairo)

Bank Misr (Islamic Branches), Cairo

Faisal Islamic Bank of Egypt, Cairo

General Investment Company, Cairo

Islamic International Bank for Investment and Development, Cairo

Islamic Investment and Development Company, Cairo Nasir Social Bank, Cairo

GUINEA                     Islamic Investment Company of Guinea, Conakry

Masraf Faisal al Islami of Guinea, Conakry

INDIA                         Baitun Nasr Urban Co-operative Society, Bombay

JORDAN                     Islamic Investment House Company Ltd., Amman

Jordan Finance House, Amman

Jordan Islamic Bank for Finance and Invest­ment, Amman

KIBRIS                                   Faisal Islamic Bank of Kibris, Lefkosa

(Turkish Cyprus)

KUWAIT                    AL Tukhaim International Exchange Company, Safat

                                    Kuwait Finance House, Safat

LIBERIA                                 African Arabian Islamic Bank, Monrovia

LIECHTENSTEIN      Arinco Arab Investment Company, Vaduz

Islamic Banking System Finance S.A., Vaduz

LUXEMOURG                       Islamic Finance House Universal Holdings S.A

MALAYSIA                Bank Islam Malaysia Berhad, Kuala Lumpur

Pilgrims’ Management and Fund Board, Kuala Lumpur

NIGER                        Faisal Islamic Bank of Niger, Niamy

PHILIPPINES             The Philippine Amanah Bank, Zaraboanga City

QATAR                                   Islamic Exchange and Investment Company, Doha Qatar Islamic Bank

SAUDI ARABIA                     Albaraka Investment and Development Company, Jeddah

                                    Islamic Development Bank, Jeddah

SENEGAL                  Faisal Islamic Bank of Senegal, Dakar

                                    Islamic Investment Company of Senegal, Dakar

SOUTH AFRICA        JAAME Ltd., Durban

SUDAN                       Bank al Barkaa al Sudani, Khartoum

Faisal Islamic Bank of Sudan, Khartoum

Islamic Bank of Western Sudan, Khartoum

Islamic Co-operative Development Bank, Khartoum

Islamic Investment Company of Sudan, Khartoum

Sudan Islamic Bank, Khartoum

Tadamun Islamic Bank, Khartoum

ST. HELEIR                The Islamic Investment Company, Jersey

Masraf Faisal al Islami, Jersey

SWITZERLAND                     Dar al Mai al Islami, Geneva

Islamic Investment Company Ltd., Geneva

Sharia Investment Services, PIG, Geneva

THAILAND                Arabian Thai Investment Company Ltd., Bangkok

TUNISIA                     Bank al Tamwil al Saudi al Tunisi

TURKEY                    Albarakah Turkish Finance House, Istanbul

Faisal Finance Institution, Istanbul

UNITED ARAB                      Dubai Islamic Bank, Dubai

EMIRATES                 Islamic Investment Company Ltd., Sharjah

UNITED KINGDOM  Albarakah International Ltd., London

Albaraka Investment Co. Ltd., London

Al Rajhi Company for Islamic Investment, London

Islamic Finance House Public Ltd. Co., London

The list includes Islamic banks as well as Islamic investment companies but it does not include Islamic insurance companies.

Selected Bibliography

KHAN, Muhammad Akram (comp)

Islamic Economics: Annotated Sources in English and Urdu – Vol 1 Islamic Foundation, Leicester, 1983. KHAN, Muhammad Akram (comp)

Islamic Economics: Annotated Sources in English and Urdu – Vol. 2 Islamic Foundation, Leicester, 1991- AHMAD, Khurshid (Ed)

Studies in Islamic Economics Islamic Foundation,

Leicester-, 1981 CHAPRA, M. Umer

Towards a Just Monetary System Islamic Foundation,

Leicester, 1985 IQBAL, Munawar (Ed)

Distributive Justice and Need Fulfillment in an Islamic Economy Islamic Foundation, Leicester, 1988 AHMAD, Ziauddin

Islam, Poverty and Income Distribution: A Discussion of the Distinctive Islamic Approach to Eradication of Poverty and Achievement of an Equitable Distribution of Income and Wealth. Islamic Foundation, Leicester, 1991. SIDDIQI, M. Nejatullah

Muslim Economic Thinking: A Survey of Contemporary

Literature Islamic Foundation, Leicester, 1981 WOHLERS-SCHARF, Traute

Arab and Islamic Banks: Mew Business Partners for

Developing Countries Paris: OECD, 1983. WILSON, Rodney

Islamic Business: Theory and Practice Economist

Intelligence Unit, Special Report No. 221 London: The Economist Publication, 1985.

ARIF, Mohammad (Ed)

Islamic Banking in Southeast Asia: Institute of Southeast Asian Studies, Kuala Lumpur, 1988 ARIF, Mohammad (Ed)

The Muslim Private Sector in Southeast Asia: Institute of Southeast Asian Studies, Kuala Lumpur, 1991- ARIF, Mohammad (Ed)

The Islamic Voluntary Sector in Southeast Asia: Institute of Southeast Asian Studies, Kuala Lumpur, 1991- CHAPRA, M. Umer

Islam and the Economic Challenge: The Islamic Foundation, Leicester, 1992.