Chinese Business Review ISSN 1537-1506 Vol.15 No.7 2016-With-cover-page-V2

Accelerat ing t he world's research.
Chinese Business Review (ISSN 1537-

1506) Vol.15, No.7, 2016
China-USA Business Review ISSN 1537-1514 Chinese Business Review ISSN 1537-1506
Related papers Download a PDF Pack of t he best relat ed papers 
ROLE OF ISLAMIC MODES OF FINANCING FOR GROWT H OF SMEs A CASE ST UDY OF ISLAMAB…
Shadow of Convent ional Financial Indust ry on Islamic Banking: T he Case against Market Compet it ion …
Omar Javaid
T HE APPLICAT IONS OF ISLAMIC BANKING IN T HE LIGHT OF MAQASID AL SHARIA’H

ANAS P ABOOBACKER
Chinese Business Review
Volume 15, Number 7, July 2016 (Serial Number 157)
David Publishing
David Publishing Company

www.davidpublisher.com
Publication Information:
Chinese Business Review is published monthly in hard copy (ISSN 1537-1506) and online by David Publishing
Company located at 616 Corporate Way, Suite 2-4876, Valley Cottage, NY 10989, USA.
Aims and Scope:
Chinese Business Review, a monthly professional academic journal, covers all sorts of researches on Economic
Research, Management Theory and Practice, Experts Forum, Macro or Micro Analysis, Economical Studies of Theory
and Practice, Finance and Finance Management, Strategic Management, and Human Resource Management, and other
latest findings and achievements from experts and scholars all over the world.
Editorial Board Members:

Kathleen G. Rust (USA), Moses N. Kiggundu (Canada), Yutaka Kurihara (Japan), Christian Seiter (Germany),
Agnieszka Izabela Baruk (Poland), Kazuhiro TAKEYASU (Japan), Marvin E. González (USA), Roberta Guglielmetti
Mugion (Italy), Natalia Petrovna Kusnezova (Russia), Shelly SHEN (China), Moira Polyxeni (Greece), Sarath WSB
Dasanayaka (Malaysia), Bonny TU (China), Carlos Salcedo-Perez (Columbia), Aysegul Yildirim kaptanoglu (Turkey),
Francisco J. Valderrey (Mexico), Reza G. Hamzaee (USA), Luís Abel da Silva Filho (Brazil)
Manuscripts and correspondence are invited for publication. You can submit your papers via Web Submission, or
E-mail to economists@davidpublishing.com, business.review.USA@hotmail.com. Submission guidelines and Web
Submission system are available at http://www.davidpublisher.com.
Editorial Office:
616 Corporate Way, Suite 2-4876, Valley Cottage, NY 10989, USA E-mail: economists@davidpublishing.com
Copyright©2016 by David Publishing Company and individual contributors. All rights reserved. David Publishing
Company holds the exclusive copyright of all the contents of this journal. In accordance with the international
convention, no part of this journal may be reproduced or transmitted by any media or publishing organs (including
various websites) without the written permission of the copyright holder. Otherwise, any conduct would be
considered as the violation of the copyright. The contents of this journal are available for any citation, however, all
the citations should be clearly indicated with the title of this journal, serial number and the name of the author.
Abstracted / Indexed in:
Database of EBSCO, Massachusetts, USA SCRIBD (Digital Library), USA
Ulrich’s Periodicals Directory, USA PubMed, USA
ProQuest/CSA Social Science Collection, PAIS, USA Open Academic Journals Index (OAJI), Russia
Cabell’s Directory of Publishing Opportunities, USA Electronic Journals Library (EZB), Germany
Summon Serials Solutions, USA Journals Impact Factor (JIF) (0.5)
ProQuest WZB Berlin Social Science Center, Germany
Google Scholar UniMelb, Australia
Chinese Database of CEPS, OCLC NewJour, USA
ProQuest Asian Business and Reference InnoSpace, USA
Index Copernicus, Poland Publicon Science Index, USA
Qualis/Capes Index, Brazil Turkish Education Index, Turkey
NSD/DBH, Norway Universal Impact Factor, USA
Universe Digital Library S/B, ProQuest, Malaysia BASE, Germany
Polish Scholarly Bibliography (PBN), Poland WorldCat, USA
Subscription Information:
Print $520
David Publishing Company, 616 Corporate Way, Suite 2-4876, Valley Cottage, NY 10989, USA
Tel: +1-323-984-7526, 323-410-1082 Fax: +1-323-984-7374, 323-908-0457
E-mail: order@davidpublishing.com
Digital Cooperative Company: www.bookan.com.cn
D DAVID PUBLISHING
David Publishing Company

www.davidpublisher.com
Chine se
Busine ss Revie w
Volume 15, Number 7, July 2016 (Serial Number 157)
Contents
Family Farms—A New Challenge in the Current World Context 311
Mihail Dimitriu, Otilia Manta
Civic Engagement in Services Design and Provisioning: A Case of We-government 326
Silvia Cosimato
Islamic Finance in Theory and Practice 334
Muhamad Abdul Aziz Muhamad Saleh Jumaa
The Silk Road Imaginary in the Central Asia as an Emerging Geopolitical Discourse 356
Cavit Emre Aytekin, Elnur Hasan Mikail

Chinese Business Review, July 2016, Vol. 15, No. 7, 311-325
doi: 10.17265/1537-1506/2016.07.001
D DAVID PUBLISHING
Family Farms—A New Challenge in the Current World Context
Mihail Dimitriu, Otilia Manta

Romanian Academy, Bucharest, Romania
The overall goal of European Union and Food and Agriculture Organization of the United Nations is to reposition
family farming at the center of agricultural, environmental, and social policies in the national agendas by
identifying gaps and opportunities to promote a shift towards a more equal and balanced development. They want
to promote directions in order to generate discussion and cooperation at the local, national, regional, and global
levels; increase awareness and understanding of the challenges faced by smallholders; and help to identify efficient
ways to support family farmers. This paper presents some information on the status and evolution of Romanian
agriculture small and medium enterprises (SMEs) and it presents a model for determining the founds needs to
support family farmers.
Keywords: inclusion, microfinance, economic models, family farms abstract
Introduction
In Europe, family farmers manage 63 percent of all farmland and guard the agro-biodiversity of soils,
water, forests, and fish stocks—resources those future generations will need in order to survive. Despite the
differences among the countries in Europe, there are issues that are common to all and this includes the
challenges of strengthening sustainable family farming and small-scale production. Romania is part of a
growing international movement to recognize the economic, environmental, and cultural value of family farms.
Romania has already taken clear and concrete steps to support its estimated 700,000 smallholders. But
there is always more to be done:
y Supporting and invigorating smallholder agriculture requires a comprehensive platform of policy and
development initiatives that are tailored to the unique and diverse needs of family farmers.
y To preserve the long-standing tradition of family farming, favourable policy and regulatory environments
are needed.
y Improving access to land, water, markets, and credit—as well as standardizing land use and property
laws—creates a sound foundation for productivity, solid ground on which farmers can and will invest in the
future of their farms.
y Public investment in rural infrastructure, public services, training, and education can give smallholders the
help they need to be competitive in an increasingly globalized marketplace.
y Empowering women and young people to participate in agriculture will guarantee the long-term viability
Mihail Dimitriu, Ph.D., Head of Microeconomic Department, Victor Slavescu Centre for Financial and Monetary Research,
Romanian Academy, Bucharest, Romania.
Otilia Manta, Ph.D. student, associate researcher, Victor Slavescu Centre for Financial and Monetary Research, Romanian
Academy, Bucharest, Romania.
Correspondence concerning this article should be addressed to Otilia Manta, 13 September Street, no. 13, building B, 5th floor,
room 5313, Bucharest, Romania.
312 A NEW CHALLENGE IN THE CURRENT WORLD CONTEXT
of family farming.
The benefits of such a rural development agenda will be evident here in Romania, and today’s event will
also contribute to making a step forward in this process.
The overall objective of the EU and FAO is to reposition agriculture on the outskirts of agricultural
policies, environmental and social national agendas, identifying gaps and opportunities to promote a shift
towards a more equal and balanced development. They want to promote the directions to generate discussion
and cooperation at local, national, regional, and global levels; raise awareness and understanding of the
challenges faced by small farmers; and help to identify effective ways to support family farmers.
Family agriculture includes all agricultural activities family and is related to many areas of rural
development. Family agriculture is a means of organizing forestry, fishing, agricultural production, pastoral,
and aquaculture, which is managed and operated by a family and work predominantly dependent family,
including both women and men. Both in developing countries and developed countries, agriculture is the
predominant form of family agriculture in the production of food. Family agriculture is the most common
operational model of agriculture in Europe and therefore it is of great importance in the EU. Most of the 12
million EU farms are family farms passed from one generation to another, and contribute to sustainable
socio-economic and environmental development of rural areas. There are a variety of family farms in the EU in
terms of their size, the activities they engage in, resource availability, the degree of market integration,
competitiveness, etc. They operate in different economic contexts, agro-ecological and social ensuring food
security while meeting the growing expectations of society for food safety, quality, value, origin and diversity
of food, and thus contribute to smart, sustainable, and inclusive. In developing countries, most poor people live
in rural areas (Sen, 1999).
Social studies and statistics show that today almost 40% of rural inhabitants are exposed to ongoing famine.
Apart from projections issued by some analysts, specialists in rural areas continue to support the need for a true
national development strategy for agriculture, which should have as a starting point in the causes of involution
investment process in rural areas and especially those that put farmers unable to accumulate financial resources or
access to microcredit/microfinance. Finalizing a strategy for economic development of rural areas must be based
on the truth that, under the circumstances, a great chance to ensure food security of the nation lies in restoring
production and trade in the area of family farms. In the context of the reality of activities in rural areas,
desideratum is a kin to help the development of models of microfinance to respond to these realities and to
contribute to the current phenomenon of social inclusion and financial, as well as sustainable development of
farms and support non-agricultural activities (Chitea, 2013).
Materials and Methods

Regarding the methodology of research on microfinance, complexity and diversity of the issues addressed
have required the use of methods, techniques, tools, and procedures of scientific investigation and interpretation
to which it’s attached particular importance:
y Documentation, namely, accessing and studying general and specialized bibliography, domestic and foreign,
state approach to knowledge issues investigated rural microfinance and scientific substantiation of the
research.
y Rational method, used as an instrument of knowledge, reflection, analysis, organization, and ongoing
scientific research approach.
A NEW CHALLENGE IN THE CURRENT WORLD CONTEXT 313
y Integration of forms, methods, and logic operations research carried out through the use of analysis and
synthesis, abstraction and concretization, comparison, generalization, and systematization.
y Statistical methods, through the use of descriptive statistics and statistical analysis.
y Observation method, carried out systematically and analytically.
y Discussions with experts from institutions and national and international institutions, but also the
beneficiaries of microfinance products and services.
y Data analysis and interpretation, using graphs, tables, and figures to highlight various developments in
microfinance.
Using the classic instruments of scientific research, based on analysis and synthesis, induction and
deduction, general and particular, and adding modern methods, authors achieved substantial and pertinent
analyses and studies on rural microfinance main ways, both internationally and especially national. Contributions
of authors on investigated issue are highlighted during the research work and theoretical and applicative
significance value resulting from the conclusions and proposals that they have formulated and promoted.
The research results are presented using tables, figures, and graphs. The theoretical information needed for
the research was taken from literature and specialized works in the field of microfinance investigated, from home
and abroad. Statistical information and concrete data on how microfinance works were taken from reports and
statistics of institutes involved in microfinance in the country and abroad as well as to public bodies and private
specialist.
The paper uses software, created specifically for analysis of the business environment in Romania
(“Diamond”), which can serve foreign investors who are interested in direct investment capital (establishment
of foreign companies in Romania, the acquisition of stakes in domestic companies, etc.) or in cooperation
with Romanian companies from various fields of interest. Studies and analyzes are completed at the
microeconomic level thereby providing a reality as close as possible to the local business environment. Used data
come from the annual accounts of traders in the real economy of Romania in the period 2008-2014 (more than
400,000 balances for each year of the period). Given that the analysis does not use data obtained through
questionnaires or surveys, results accurately reflect the economic and financial status (margin of error is minimal
and only refers to the processing of data and not the number of operators analyzed). This method of analysis
provides a more rigorous substantiation of the decision-making process and also maximum reduction in
uncertainty.
Results and Discussions

Most rural poor depend on agriculture base for most of their meager livelihoods. Others depend on basic
non-farm activities such as agro-processing, petty trade, and informal sectors (Herman & Stefanescu, 2009a).
Many of the poor live in rural areas, in regions where arable land is limited, low agricultural potential and
environmental degradation are common. Smallholders and family farmers face many challenges (Herman &
Stefanescu, 2009b):
y Climate change and climate variability.
y Lack of tenure security in a context of increasing competition for land and water (population growth,
urbanization) and inadequate governance of land tenure.
y Limited access to financial resources, inputs, technology, training, research, advisory services, and
education.
y Price volatility (energy, food, etc.) and limited access to markets.

At the national level, a number of factors there have are a key for successful development of family
farming, such as: agro ecological conditions and territorial access to technology and extension services; access
to finance; demographic, economic, and socio-cultural conditions; and specialized and availability of education
among others.
The goals of the study are to attain better understanding the real financial, social, and economic situation
of family farming, and with direct contribution to:
y Economic growth and employment generation towards oriented actions by generating local value added
and at the same time ensuring maximum employment options for the local workforce.
y Diversification of the labor force and income generating activities, especially activities by identifying
competitive advantages locales—exploit the specialized agriculture, energy, tourism, etc.
y Products (expansion/replacement), markets (sub-products, brands), and processes (cost reduction).
y Business innovation and strengthen actions arising dynamic innovative enterprises at different levels.
y The quality of services, especially education, health, and communications, reflecting the need for
adaptation to the challenges of globalization and competitiveness. Emphasis will be only placed on issues of
efficiency and accessibility of services.
The study is to be conducted to propose through a series of activities conducted by three partner’s
organizations, with the assistance of local professional/academic institutions.
Data Collection and Analysis

Data were collected and analyzes were conducted in the following directions:
y Identification and documentation of family farming policies at national and/or other levels.
y Main organizational bodies that carry out policies.
y Support systems (R&D, extension services, organizations for access to credit and markets, and support for
non-agriculture activities in family farms).
y The best practices in organizations.
y Documentation inside the communities—physical and climate factors, demographic structure agriculture
structure, labor force and employment, cultural and social structure, organization, and previous experiences in
adoption of innovations.
y The best practices in the community.
y Identification and harnessing of local assets/constrains (economic, social-cultural, demographic, physical,
gender, environmental, institutional, and organizational factors).
Formulation and Analysis of Alternative Support and Enterprise Models

The collected information will be analyzed, highlighting the major constraints and bottlenecks for
development and identifying potential advantages and development focal points.
y Identification of technical support options for capacity development actions including policies.
y Identification of non-agricultural activities is complementary with family farming.
y Identification of actors (public-private) is in order to increase their involvement in the support and
enterprise models of family and smallholder agriculture in the area.
y The appraisal will include all main assessment factors.
y Technical (layout, types of technologies, size, scale, types of equipment, location, etc.).
y Institutional (analysis of the implementing and operating agencies regarding their organization and
management, examination of the efficiency of utilizing local capabilities and initiatives, and investigation of
alternative policy or institutional changes required).
y Economic: an appraisal of the economic costs and benefits of the alternative models, and its impact on the
economy and on the welfare of the people who are directly or indirectly affected by it.
y Social: appraisal of social costs and benefits. Special attention will be given to gender, youth, and cultural
issues.
y Financial: the model assessment will include formulation of financial analysis that will indicate that there
are sufficient funds to cover the costs of implementing it, verifying financial viability.
y Environment: direct or indirect environmental impact.
y Development of human resources and social capita. What is the impact of model on strengthening skills of
human capital?
y Sustainability—options that ensure environmental and social sustainability of the projects will be chosen.
y Feasibility: options that are viable from an economic, social, and political view.
y Multiplier effect—options that will enhance the creation of other activities.
Romania joined the EU in 2007, although it has benefited from the financial support of the European
institutions, and felt the full impact of the financial crisis since 2008. The situation was even more unfavorable
in agriculture, where the predominant activity sized entities small and very small (subsistence farms, small and
middle enterprises, etc.).
More reliable information coming from companies was registered as legal entity (annual balance sheets for
companies that are registered at the Ministry of Finance as taxpayers). For other entities such as “subsistence
farms” are only partly based on information obtained from surveys and questionnaires and only a limited
number of units (representative sample).
Based on these considerations, it analyzed the status and progress of SMEs in agriculture in the period of
2008-2014, in terms of the level of production potential, the potential, and the use of economic and financial
results.
The Evolution of Indicators Status

In general, SMEs represent a significant share in the work of Romanian agriculture.
Thus, at the end of 2014, the SMEs group (approximately 90.72% of the companies working in agriculture)
provides approximately 27.61% of the turnover in agriculture, having about 37.03% of total assets agriculture
and approximately 33.98% of the total number of employees in agriculture. It is obvious that the main role in
agricultural production is the big companies, but provides SME with about two to three employees (average)
agriculture “survival”.
As can be seen from the data of Table 1, the assets of SME companies (the activity performed in the
reporting year) in agriculture increased on average by over 90% in 2014 compared to 2008, especially in
forestry and hunting industries (forestry, logging, and related services, including related service activities
hunting).
However, the higher average assets recorded in plant growing and animal breeding basic activities in
agriculture in Romania.
In 2014, SMEs average unit inventories were 57.47% higher than those of 2008, with the highest values in
the livestock sub-branch (+80.10%).
The number of employees is one of the most significant indicators of economic potential, which in the
period under review remained approximately constant (–7.51%), standing at a very low level (three employees
on average for the SME agriculture!).
As can be seen from the data of Table 1, the number of SMEs in agriculture in the period under review
increased by 34.96% to 16,602 in 2014. The structure, most SMEs are still in the activities of plant growth and
animal husbandry, which together give more than 62.02% of all SMEs in agriculture.
Table 1
The Number of SME in Agriculture Spread Over Sub-sectors in the Period 2008-2014
The number of Dynamics (2008 = 100%)
microenterpris
Nr.
Sub-sectors of agriculture es at december
Crt. 2009 2010 2011 2012 2013 2014
31, 2014
-lei-
1 Total Romanian real economy 457,446 109.20 103.77 104.94 104.71 109.97 109.45
2 Total agriculture 18,299 106.00 112.98 120.97 124.83 130.56 133.07
3 Total agriculture (SME) 16,602 109.28 115.79 122.35 127.22 132.50 134.96
4 Plant growing 6,697 106.77 112.88 119.58 125.93 131.67 135.02
5 Animal breeding and veterinary care 3,599 116.07 123.44 131.06 137.26 143.63 149.83
6 Activities in mixed farms and related services 2,918 112.44 126.38 141.56 145.84 150.49 150.65
7 Hunting including related service activities 52 126.83 114.63 146.34 126.83 143.90 126.83
8 Forestry, logging, and related services 2,820 103.24 103.28 102.97 104.69 107.51 107.51
9 Fishing, aquaculture 516 124.26 140.53 138.46 142.90 155.03 152.66
Source: Calculated using data from the economic and financial situations reported by economic operators from Agriculture,
Romanian Ministry of Public Finance (2008-2014).
In terms of the use of economic and financial potential, it is noted that labor costs rose by 50.04% in the
period under review, the average for SMEs in agriculture, although the number of employees remained
approximately constant (–6.51%).
Due to the faster increase in material costs, operating costs increased in the period by 60.36%, mainly in
sub-branches basic plant growth and livestock (+64.85% and 69.79%). Territorially, the highest increases were
registered in the North-East and Bucharest-Ilfov.
From the point of view of economic and financial results, it notes that:
y A significant increase in turnover average in agriculture (+73.03%) in the period under review, even under
ecoomico financial crisis.
y Faster growth in turnover compared with operating profit (+89.95%), especially in sub-branch hunting
(122.45%), forestry (+122.04%), and crop (105.55%).
y A doubling of operating losses in agriculture (166,205), especially in plant growth (+211.68%), hunting
(+189.87%) and livestock.
y Increases in SME activity in agriculture in terms of turnover were achieved by increased 88.07% over the
period analyzed the short-term debt and 79.72% in the medium and long term debt.
In those circumstances, the following problems occur:
y If Romania wants a future based on SME agricultural production?
If so, then the following questions arise:

y Production mechanism based on debt can be sustainable in the medium and long term?
y In the circumstances, the current mechanism for providing financial resources is viable or should be
restructured?
y Stimulating employees to achieve agricultural production is real or only apparent (given that the level of
inflation in the period is under review crescutcu 28.70%)?
Given the data presented, the determination of the annual funding of agricultural production by SME can
use formula:
NF = CT + DPS – AC
where: NF—necessary financing; CT—total cost of ownership; DPS—short-term debt; and AC—current
assets.
For example, in 2014, active SMEs (which recorded turnover) of Romanian agriculture, according to data
from Table 2 to Table 19, were recorded as follows:
1. Number of companies—16,602.
2. The average total cost of operation per unit—731,308 lei.
3. Accounts payable average unit—623,640 lei.
4. Current assets average unit—605,710 lei.
Thus, borrowing for 2014 would be as: NF = 16,602 ∗ (731,308 + 623,640 – 605,710) = 12,438,849,276
lei, or 749,238 lei on average for SMEs in agriculture.
These results must, however, correlated with the main indicator of “performance” (debt recovery) which is
546 days (averaged for 2014)! So on average output, it needs one and a half years to pay off existing debts only
in 2014. However, this situation is getting worse. While agricultural production in SMEs increased in 2014 by
9.23% compared to the previous year, total debt increased by 13.61% (2014/2013).
Table 2
The Total Value of Assetes per Unit for Micro-enterprises (SME) in Agriculture Spread Over Sub-sectors of
Activity, 2008-2014
Total assets Dynamics (2008 = 100%)
per unit
Nr.
Sub-sectors of agriculture at december
Crt. 2009 2010 2011 2012 2013 2014
31, 2014
-lei-
1 Total Romanian real economy 2,641,346 90.88 105.25 112.10 111.04 111.33 114.08
2 Total agriculture 3,352,697 98.66 111.88 107.48 117.45 114.74 126.40
3 Total agriculture (SME) 1,368,727 115.84 130.36 155.15 167.15 169.93 193.96
4 Plant growing 1,971,391 111.20 122.28 145.05 159.60 166.59 193.75
6 Activities in mixed farms and related services 1,014,535 112.30 140.37 173.28 173.67 174.46 180.91
7 Hunting including related service activities 911,064 186.19 141.62 191.25 197.07 171.58 300.74
9 Fishing, aquaculture 1,134,261 85.06 145.03 154.54 201.62 183.27 185.28
Table 3
The Value of Fixed Assets per Unit for SME in Agriculture Spread Over Sub-sectors of Activity During 2008-2014
Assets per unit Dynamics (2008 = 100%)
Nr. at december
Sub-sectors of agriculture
Crt. 31, 2014 2009 2010 2011 2012 2013 2014
-lei-
4 Plant growing 1,054,178 114.33 123.31 144.26 156.63 164.80 182.31
9 Fishing, aquaculture 601,482 87.50 97.63 170.97 252.51 210.04 209.40
Table 4
The Value of Material Stocks per Unit for SME in Agriculture Spread Over Sub-sectors of Activity During
2008-2014
Material stocks Dynamics (2008 = 100%)
per unit at
Nr.
Sub-sectors of agriculture december 31,
Crt. 2009 2010 2011 2012 2013 2014
2014
-lei-
4 Plant growing 317,132 94.19 105.05 108.92 130.51 134.37 160.28
Table 5
The Money Availabilities per Unit for SME in Agriculture Spread Over Sub-sectors of Activity During 2008-2014
The money Dynamics (2008 = 100%)
availabilities
Nr. per unit,
Crt. december 31, 2009 2010 2011 2012 2013 2014
2014
-lei-
4 Plant growing 123,918 128.32 169.44 191.56 191.45 214.59 259.52
Table 5 continued
The money Dynamics (2008 = 100%)
availabilities
Nr. per unit,
Crt. december 31, 2009 2010 2011 2012 2013 2014
2014
-lei-
Table 6
Circulating Assets Value per Unit for SME in Agriculture Spread Over Sub-sectors of Activity During 2008-2014
Circulating Dynamics (2008 = 100%)
assets value
Nr. per unit at
Crt. december 31, 2009 2010 2011 2012 2013 2014
2014
-lei-
4 Plant growing 917,213 107.07 120.93 146.10 163.50 168.93 208.80
Table 7
The Average Number of Staff per Unit for SME in Agriculture Spread Over Sub-sectors of Activity During
2008-2014
The average Dynamics (2008 = 100%)
number of
Nr. staff per unit at
Crt. december 31, 2009 2010 2011 2012 2013 2014
2014
-lei-
1 Total Romanian real economy 8.49 88.07 84.49 87.41 85.15 81.01 79.78
2 Total agriculture 7.29 84.16 85.67 82.74 79.82 74.65 73.54
3 Total agriculture (SME) 2.73 230.92 153.37 110.36 96.41 95.58 93.49
4 Plant growing 2.76 90.11 232.33 93.95 92.72 91.60 91.60
5 Animal breeding and veterinary care 2.38 91.26 94.47 96.54 95.68 96.22 94.24
6 Activities in mixed farms and related services 2.92 575.70 117.89 191.36 115.42 113.99 109.22
7 Hunting including related service activities 2.10 90.59 80.74 98.87 93.11 82.80 91.43
8 Forestry, logging, and related services 2.93 403.24 96.42 97.93 94.99 94.31 91.19
9 Fishing, aquaculture 2.72 77.72 77.82 82.22 82.86 82.26 74.89
Table 8
The Amortization Expense of Tangible Assets per Unit for SME in Agriculture Distributed by Industry During
2008-2014
The Dynamics (2008 = 100%)
amortization
expense of
Nr. tangible assets
Crt. per unit at 2009 2010 2011 2012 2013 2014
december 31,
2014
-lei-
4 Plant growing 96,646 128.36 157.94 187.53 215.57 233.15 257.82
Table 9
Labor Costs per Unit for SME in Agriculture Distributed by Industry During 2008-2014
Labor costs per Dynamics (2008 = 100%)
unit at
Nr.
Crt. 2009 2010 2011 2012 2013 2014
2014
-lei-
4 Plant growing 49,004 105.21 103.25 112.87 125.29 132.80 147.99
Table 10
Operating Costs per Unit for SME in Agriculture Distributed by Industry During 2008-2014
Operating Dynamics (2008 = 100%)
costs per unit
Nr.
Crt. 2009 2010 2011 2012 2013 2014
31, 2014
-lei-
Table 10 continued
costs per unit
Nr.
Crt. 2009 2010 2011 2012 2013 2014
31, 2014
-lei-
4 Plant growing 955,807 96.70 119.07 142.70 165.26 149.70 164.85
Table 11
Total Costs per Unit for SME in Agriculture Distributed by Industry During 2008-2014
Total costs per Dynamics (2008 = 100%)
unit at
Nr.
Crt. 2009 2010 2011 2012 2013 2014
2014
-lei-
4 Plant growing 1,012,586 98.01 118.98 141.65 163.81 149.79 165.85
Table 12
Turnover per Unit for SME in Agriculture Distributed by Industry During 2008-2014
Turnover per Dynamics (2008 = 100%)
unit at
Nr.
Crt. 2009 2010 2011 2012 2013 2014
2014
-lei-
4 Plant growing 877,519 98.76 132.79 171.12 189.86 172.15 187.06
Table 13
Operating Income per Unit for SME in Agriculture Distributed by Industry During 2008-2014
income per
Nr. unit at
Crt. december 31, 2009 2010 2011 2012 2013 2014
2014
-lei-
4 Plant growing 1,018,904 93.60 117.93 152.47 169.31 152.61 162.91
Table 14
Total Income per Unit for SME in Agriculture Distributed by Industry During 2008-2014
Total income Dynamics (2008 = 100%)
per unit at
Nr.
Crt. 2009 2010 2011 2012 2013 2014
2014
-lei-
4 Plant growing 1,063,729 94.44 119.85 154.12 170.64 155.71 167.99
Table 15
Operating Profit per Unit for SME in Agriculture Distributed by Industry During 2008-2014
profit per unit
Nr.
Crt. 2009 2010 2011 2012 2013 2014
31, 2014
-lei-
4 Plant growing 153,153 78.58 105.86 209.19 180.64 175.28 205.55
Table 15 continued
profit per unit
Nr.
Crt. 2009 2010 2011 2012 2013 2014
31, 2014
-lei-
Table 16
Operating Losses per Unit for SME in Agriculture Distributed by Industry During 2008-2014
Losses per
Nr. unit at
Crt. december 31, 2009 2010 2011 2012 2013 2014
2014
-lei-
4 Plant growing 90,056 117.07 109.79 102.71 117.15 152.63 311.68
Table 17
Gross Profit per Unit for SME in Agriculture Distributed by Industry During 2008-2014
Gross profit Dynamics (2008 = 100%)
per unit at
Nr.
Crt. 2009 2010 2011 2012 2013 2014
2014
-lei-
4 Plant growing 147,595 70.32 106.10 223.45 187.92 186.10 226.12
Table 18
Total Loss per Unit for SME in Agriculture Distributed by Industry During 2008-2014
Total loss per Dynamics (2008 = 100%)
unit at
Nr.
Crt. 2009 2010 2011 2012 2013 2014
2014
-lei-
4 Plant growing 96,452 108.60 86.40 81.66 99.22 117.44 226.34
Table 19
Total Debts per Unit for SME in Agriculture Distributed by Industry During 2008-2014
Total debts per Dynamics (2008 = 100%)
unit at
Nr.
Crt. 2009 2010 2011 2012 2013 2014
2014
-lei-
4 Plant growing 1,399,443 112.08 122.87 136.35 150.54 154.66 184.66
7 Hunting including related service activities 1,144,759 205.38 126.63 158.79 222.69 222.35 368.75
Conclusion
Rural areas, as reported by the EU Rural Review, are estimated to generate 48% of the gross value of the EU
economy and 56% of total employment in the Member States. The future is for the rural economy SMEs, many of
which are micro-enterprises with a high percentage of self-employment jobs (Rippey, 2009). As in all fields, the
agriculture policies give decisive significance fair allocation of investment to agricultural production and
productivity. Supporting these policies give new models of microfinance adapted to the current environment of
structuring the farm to the needs of small farmers; given that at present Romania has over 2,500,000 small farms
semi-subsistence (Ministry of Agriculture and Rural Development 2014-2020, 2014), contributing directly and
indirectly to sustainable development of the Romanian village. After a period of searching and waiting, Romania
is obliged to approach the decisions that lead to the restoration of new principles and creat new institutions to
provide loans for actors and local sectors vital to the economic consolidation of settlements and human welfare.
It’s about creating specialized microfinance institutions to finance economic entities with legal personality;
non-banking financial institutions in rural areas to support crediting legal entities and individuals active:
institutions that conduct microfinance institution specialized education in rural areas (Madgearu Virgil, 1914).
The capital required to establish such institutions should be ensured through government financial contributions
for the payment to be repaid in time. Another very important aspect is to create innovative models of microfinance
and continuous training of human capital involved in providing financial services in rural areas and in the financial
education of those accessing microcredit (Borzaga, 2013). To achieve this goal of establishing a rural
microfinance innovative and coherent, it would be desirable to start with what was good in areas of the credit
system in Romania in the interwar period, especially the innovative models today existing in some EU countries
and creating own innovative models of microcredit.
What to Do Next?
Creation of a mechanism is to help stimulate the creation of a value-added manufacturing chain more
higher, so turnover is to ensure both current manufacturing costs and pay old debts.
The funding mechanism structure is adapted to the specific needs of SME’s financing in agriculture
(seasonal production, risk of natural disasters and other unforeseen events, minimum guarantees, etc.).
References
Borzaga, C. (2013). Unlocking the potential of social economy and social enterprises. EURICSE.
Chitea, L. (2013). Opportunities and constraints for rural communities. Romanian Publishing Agricultural capital, Bucharest.
Herman, E., & Stefanescu, D. (2009a). Impact of lending in agriculture lending process. PIM Publishing House, Iasi.
Herman, E., & Stefanescu, D. (2009b). An analysis of domestic credit granted for types of institutional sectors. PIM Publishing
House, Iasi.
Madgearu Virgil, N. (1914). Structure and trends popular banks in Romania. Romanian Printing House, Bucharest.
Ministry of Agriculture and Rural Development 2014-2020. (2014). National plan for rural development. Bucharest. Retrieved
from www.madr.ro
Rippey, P. (2009). Microfinance and climate change: Threats and opportunities. CGAP.
Romanian Ministry of Public Finance. (2008-2014). Balance sheet for the SMEs in Romania 2008-2014.
Sen, A. (1999). Development as freedom. Oxford University Press.
doi: 10.17265/1537-1506/2016.07.002
D DAVID PUBLISHING
Civic Engagement in Services Design and Provisioning:

A Case of We-government
Silvia Cosimato
University of Salerno, Salerno, Italy
In recent years, public management literature has focused its attention on communities’ role in public service
design, production, and delivery. The present paper is focused on the review of the main academic contributions
describing the most common models that frame citizens’ engagement in service co-production. Among these
models, a specific attention has been paid to one of the most recent: the “we-government” paradigm. Consequently,
to better understand we-government conversational and cooperative potential, the analysis has also interested the
influence of recent mass collaboration channels and in particular of social media on citizens engagement in public
service co-production, in order to better understand how and when they act as local and national governments’
partners. To support theoretical evidences, a case study analysis has been conducted in order to check the appliance of
a we-government platform to a specific area. In particular, it has been analyzed the FixMyStreet social platform and
its implementation in the city of Gloucester (UK).
Keywords: civic engagement, social media, co-production, e-government, we-government, FixMyStreet
Introduction
Over the past decades, literature has posed a growing attention on citizens’ participation in public life,
especially in public services design, development, and provisioning. Several scholars have considered the recent
expansion of civic engagement as a response to the recent declining of citizens’ participation in electoral
competition (Warren, Sulaiman, & Jaafar, 2014). However, this concept seems to be used to cover several issues,
such as those related to elections, charity, and civic organizations’ activities. In this context, the spread of the
Web 2.0 and social technologies offers to institutions “unimagined opportunities to do more for themselves”
(Johnston & Hansen, 2011, p. 22), responding to citizens’ demands for participation. Conversely, a silent, but
strong revolution has led public management towards participative policies, based on government-citizen
interaction that some scholars have defined “we-government” (Linders, 2012). This changing pattern is clearly
related to the “e-government” evolution (Weerakkody, Irani, Lee, Osman, & Hindi, 2015), a phenomenon that “is
understood as the use of ICT to promote more efficient and cost-effective government, facilitate more convenient
government services, allow greater public access to information, and make government more accountable to
citizens” (Bhatnagar, 2004, p. 19). Therefore, the evolution of e-government (citizen as a customer) towards
we-government (citizen as a partner) has led to new forms of civil participation, often based on social media
Silvia Cosimato, Ph.D. in marketing and communication, research assistant at the Departement of Business Studies and
Innovation Systems (DISA-MIS), University of Salerno, Salerno, Italy.
Correspondence concerning this article should be addressed to Silvia Cosimato, Università di Salerno, DISA-MIS, via Giovanni
Paolo II, 84080, Fisciano (Sa), Italy.

CIVIC ENGAGEMENT IN SERVICES DESIGN AND PROVISIONING 327
adoption. However, research on the influence of social media on civic behavior and engagement is still limited
and not focused on the way these social media are reshaping the phenomenon of civic engagement. Therefore,
this study examines online and offline political engagement and pays special attention to the role of social
networking sites in people’s political and social activities. Starting from the previous considerations, two
research questions have been defined:
RQ1: Which are the most involving and challenging civic issues?
RQ2: How collaborative platforms impact citizens’ commitment and involvement in public services design
and implementation?
The study is organized in two main sections; the first one dedicated to the review of the most important
academic contributions on co-production, civic engagement, and we-government; and the second one based on
the analysis of a real case of we-government (FixMyStreet).
Civic Engagement: An Overview

In current era, citizens’ involvement in public polices and services’ design and provisioning has been often
defined as “civic engagement” (Uslaner & Brown, 2005). This concept lacks of a unique definition, being based
on different ideas such as the possibility to improve problem-solving or avoid disputes, the ongoing citizens’
involvement in processes’ planning, and citizens’ ability in terms of self-mobilization. The civic engagement is
strictly related to the most general paradigm of “engagement” (Brodie, Hollebeek, Juric, & Ilic, 2011), emerging
from marketing domain and defined as a phenomenon concerning employees and/or customers’ disposition to
cooperate to the building of “loyalty beyond reason” (Roberts, 2005). The appliance of this general paradigm to
public sector has led to a better definition of citizens’ participation in public polices and services. In fact, civic
engagement refers to those individual and collective actions designed to describe and address public concerns or
as the individual responsibility that people should have as a part of a community. This concept also refers to “the
ways in which citizens participate in the life of a community in order to improve conditions for others or to help
shape the community’s future” (Cegarra-Navarro, Garcia-Perez, & Moreno-Cegarra, 2014). Consequently,
citizens, clients, consumers, volunteers, and/or community organizations can be now involved “in producing
public services as well as consuming or otherwise benefiting from them” (Alford, 1998, p. 128). This has led to
the emergence of co-production processes, highlighting the “conjoint responsibility of lay citizens and
professional government agents for the delivery of public services” (Sharp, 1980, p. 105). In recent times,
literature has been focused on a better understanding of civic participation in public issues, investigating the
reasons why people decide to take part in these activities. In this stream of research, deliberative theorists stated
that individuals generally led to share resources and in particular information, in order to face or solve social
problems and learn the better way to participate in civic activities. It has to be noted that the emergent
technologies (e.g. ICTs, social media, mobile technologies, etc.) are deeply influencing the evolution of civic
engagement, enabling citizens to participate directly and in real-time to public activities.
Social Media Influence on Civic Engagement and Co-production Processes

In addition, the spread of the most recent ICTs has deeply influenced social changes, enabling “the most
helpless and marginalized social groups to access the information base on which decisions are made, and
ultimately, to enhance the responsiveness to people’s real needs” (Gigler, Custer, Bailur, & Dodds, 2014, p.
211). The Web 2.0 and in particular social media have influenced both civic engagement and co-production in

328 CIVIC ENGAGEMENT IN SERVICES DESIGN AND PROVISIONING
terms of public consultation and participation, opening government core activities to citizens’ contribution
(Linders, 2012). In fact, these media seem to have deeply affected the co-production of public services’ design,
reshaping, and provisioning, supporting institutions in critical sector such as education, health, and justice.
However, scholars and practitioners are still argumenting about the influence of emergent technologies on
citizens’ participation in public polices (Bateman, Xiong, Benzinger, Fagan, Goate, Fox, ... Morris, 2012). In
particular, some authors have highlighted governments and public institutions interest into Web 2.0 and social
media, and considered it as able to enhance the transparency of their activities and promote citizens’ online
participation (Bonsón, Torres, Royo, & Flores, 2012). It has to be reported that:
Social media include blogs and web forums, social bookmarking sites, photo and video sharing communities, as well
as social networking platforms such as Facebook and MySpace, which offer a combination of all these with an emphasis
on the relationships among the users of the community. (Kietzmann, Hermkens, McCarthy, & Silvestre, 2011, p. 438)
In particular, these media have promoted a balance shifting from government to society, contributing to the
reinterpretation of government role and functions, and enabling citizens to participate in institutional processes.
In literature, two main definitions of social media influencing civic engagement have emerged: the first one
related to their ability to support social activism and virtual solidarity (Wellman, Haase, Witte, & Hampton,
2001) and the second one that considers them as a real expression of consumerism over citizenship, social
relations’ fragmentation, and the subsequent erosion of civic involvement. However, in terms of civic
engagement, according to Norris and Moon (2005), these media support three different processes: 1) the
downward of information flows from government to citizens; 2) the upward of information flows from citizens to
government, in order to facilitate decision making; and 3) the definition of horizontal communication flows that
can flat traditional hierarchies. These processes get on other three fundamental concepts: participation,
transparency, and accountability (Linders, 2012). In particular, participation is related to the ability of social
media to facilitate the public access to institutional information and policies. Transparency is connected to “any
attempts (by states or citizens) to place information or processes that were previously opaque in the public
domain, accessible for use by citizen groups, providers, or policy makers” (Joshi, 2013, p. 3), and, finally,
accountability is based on specific processes such as information acquiring, decision-making, and unsatisfactory
performance identification and sanction. Participation, transparency, and accountability can be also supported by
ICTs and social media, enabling the “disintermediation”: a process that makes citizens able to directly interact
with institutions. This practice has been also defined “re-intermediation” being strictly related to the involvement
of “new intermediaries (or new roles for existing intermediaries) to address persistent information asymmetries
and bridge digital inequality resulting from high costs” (Gigler et al., 2014, p. 215). Therefore, civic engagement
can be considered as the latest step of some processes (e.g. socio-economic development, technological diffusion,
democratization, etc.) that are influenced not only by resources availability and citizens’ motivation, but also by
social media and Web 2.0 potential that offers a better management of potential or real institutional and civic
issues.
We-government: The Roots of an Emerging Paradigm

The spread of the Web 2.0 has contributed to the emergence of new e-government models and a better
cooperation among institutional and non-institutional actors. In literature, terms as “Government 2.0” (Chun,
Shulman, Sandoval, & Hovy, 2010) and “we-government” (Linders, 2012) are used to better define the

influence of social technologies on governments’ disclosure towards different forms of social participation to
public policies and actions. The emerging phenomenon of web-facilitated co-production has had several and
sometimes different definitions, such as: crowdsourcing, “citizen sourcing” (Torres, 2007), “collaborative
government” (McGuire, 2006), “Wiki Government” (Noveck, 2009), “open government” (Orszag, 2009),
“co-governance” (Ackerman, 2004), “e-participation” (Dunleavy & Margetts, 2010), “do-it-yourself government”
(Linders, 2012); and “government as a platform” (O’Reilly, 2010). However, the concept of we-government is
not new, but often misunderstood; thus, several scholars have used it in a no consistent and scientific way,
eventough this paradigm tries to summarize the influence of the most recent web collaborative tools on citizens’
engagement in public policy and services. We-government seems to be the natural evolution of the traditional
e-government paradigm, considering the new Internet and social technologies a network able to enhance citizens’
participation in public services.
Research Method
This study analyzes we-government’s best practice reported by some British institutions, in order to better
understand citizens’ participation in political and institutional activities. In particular, drawing on Hoffman and
Fodor’s (2010) framework and later adapted to Eisenhardt’s (1989) and Yin’s (2003) case study methodology, it
has investigated a complex phenomenon (the online civic engagement) within its context. Civic engagement has
been empirically examined considering the main online topics and activities in which citizens are involved.
Starting from Hoffman and Fodor’s (2010) framework, a new one has been developed to analyze social media
and/or social tools effectiveness in terms of awareness, engagement, and word of mouth (see Table 1) in order to
show citizens’ online participation. In fact, if literature considers civic engagement as citizens’ endorsement in
public polices, it can be evaluated also by counting the number of: comments, active users, likes, user-generated
items, used widgets, impression-to-interaction ratio, and rate of activities. However, citizens’ awareness can be
evaluated by counting the number of: members, installs of application, viewed pages, impressions, bookmarks,
and ratings/reviews.
Table 1
Key Metric for Social Media Application
Social media application Brand awareness Brand engagement Word of mouth
y Number of comments
y Number of members y Number of active users
y Frequency of appearance in
y Number of installs of y Number of likes
y Number of user-generated
y Number of posts on wall
time line of friends
y Number of viewed pages
application
y Number of reports/shares
y Number of impressions y Number of used widgets
Social networks items
y Number of responses to
y Number of bookmarks y Number of impression-
y Number of ratings/reviews
friends referral invites
y Number of rate of activities
to-interaction ratio
Source: adapted from Hoffman and Fodor (2010).
A content analysis has been conducted on users’ messages posted on the selected social platform from
January 2014 till August 2014 to better understand citizens’ participation in their municipalities’ life and define
the hottest topics. The analysis has been based on a specific semantic level: the word (Berelson, 1952; Merton,
1968), the smallest unit used in content analysis. Consequently, words occurrence and their frequency
distribution have been counted. The collected posts have also been ordered in four different categories: road

network, environment, society, and problems. The frequency of the words occurring in the selected text (reports
published on FixMyStreet from January to August 2014) has been counted and the fitting ones have been
reported in the above-mentioned categories (road network, environment, society, and general problems). The
posts, which met these classification criteria, have entered into online open software (Concordance) in order to
calculate words’ high frequency (Stemler, 2001). The analysis has provided a list of all the words and times they
occur in the selected text. To restrict the analysis, stop words have been excluded. To better evaluate FixMyStreet
awareness rate, the visitors’ number has been divided for published posts’ number.
Findings
The present analysis has been conducted retrieving data from FixMyStreet social web site, which promotes
the online civic participation since 2010 and enables British people to report urban problems or complains. The
web site collects reports from all the municipalities of United Kingdom and publishes that related posts in
specific sections. The most common reports often link to a photo and other geographical indicators, and relay to
the protection of urban life, environmental resources, and road network maintenance. These reports are sent as
short as possible to civic administration in order to make it able to quickly solve the related problems. Then, the
reports are ordered in the following online categories: road network, environment, society, and general problems.
Table 2
Words Occurrences and Their Related Categories
Categories Words and occurrences
Tunnel (1; 0.11%), Parking (6; 0.66%), Road (7; 0.78%), Street (7; 0.78%), Car (10; 1.11%), Access (2; 0.22%),
Road network Alley (2; 0.22%), Pavement (2; 0.22%), Pedestrian (2, 0.22%), Vehicles (3; 0.33%), Footpath (4, 0.44%),
Manhole (3; 0.33%), Path (3; 0.33%).
Park/landscape (3; 0.33%), Park (8; 0.89%), Tree (3; 0.33%), River (3; 0.33%), Garden (2; 0.22%), Blocks (3;
0.33%), Water (1; 0.11%), Waste (2; 0.22%), Rubbish (8; 0.89%), Building (2; 0.22%), Fly tipping (9; 0.99%),
Environment
Green (2; 0.22%), Recycling (1; 0.11%), Littering (1; 0.11%), Litter (1; 0.11%), Grass (1; 0.11%), Homes (1;
0.11%), Inhabitation (1; 0.11%).
Job (2; 0.22%), Mess (2; 0.22%), Police (3; 0.33%), People (3; 0.33%), Taxpayers (1; 0.11%), Children (4;
Society 0.44%), Dog (4; 0.44%), Council (40; 4.40%), City (26; 2.88%), Gloucester (25; 2.75%), Women (2; 0.22%),
School (2; 0.22%), Adult (1; 0.11%), Resident (1; 0.11%), Neighbors (1; 0.11%).
Missing (3; 0.33%), Broken (4; 0.44%), Abandoned (4; 0.44%), Burnt (3; 0.33%), Complaint (1; 0.11%), Risk
General problems (1; 0.11%), Damaged (1; 0.11%), Destroyed (1; 0.11%), Security (1; 0.11%), Drugs (1; 0.11%), Anonymously
(16; 1.77%).
Source: our elaboration.
As shown in Table 2, most of reports are related to environmental issues, while the highest number of
occurrences is related to the following words: Council (40; 4.44%), City (26; 2.88%), and Gloucester (25; 2.75%),
which are included in the category named “Society”. This situation is not so significant because all the analyzed
posts are related to the city of Gloucester and published in its specific area. The words with the highest occurrence
rate have been ordered in the following categories: Road Network (Parking 6; 0.666%; Road 7; 0.78%; Street 7;
0.77%; Car 10; 1.11%) and Environment (Park 8; 0.89%; Rubbish 8; 0.89%; Fly tipping 9; 0.99%). A particular
relevance has also the term “Anonymously” (16; 1.77%), occurring into the category named “General Problems”
referring to those reports lacking in information about the author. This means that people often choose to not
publish their name. The main topics in FixMyStreet social site are related to environmental and social issues (see
Table 2), Gloucester citizens are particularly sensitive to environmental issues and protection (this category is
made up of 18 recurrent words), even if they pay great attention also to Parking (6; 0.66%), Road (7; 0.78%),

Street (7; 0.78%), and Car (10; 1.11%) problems. The final feature set does not consider words put into stop
words (e.g. and, or, the, can, etc.); consequently, the result is 901 tokens and 451 types. British citizens are deeply
engaged in FixMyStreet website services contributing to its activities and of course to the local welfare and
reporting to the related authorities’ local problems, complains, and emergencies, in order to solve them as soon as
possible (see Table 3). In United Kingdom, FixMyStreet has also a good rate of awareness, because it has
developed a growing community made up of about 500 members. Consequently, citizens’ awareness of this
online social platforms is quite high, having an elevate rate of traffic and interaction (e.g. 479 members; 1,550
daily pageviewers; 379,708 daily rank, etc.).
Table 3
Key Metric for Social Media Application
Social media application Social web site awareness Social web site engagement
479 members
479 install of application 509,419 comments
1,500 daily pageviews 87,000 different active users
FixMyStreet 45.50% bounce rate 81,601 pageviews per month
6 external links 2,133 reports
11 internal links 510,014 updates on reports
379,708 daily visitors rank
Source: our elaboration.
Citizens’ engagement in Gloucester municipality services has been also analyzed, counting the number of
active users (25)1 of the social site page dedicated to this city and then data have been divided by the municipality
population (110,207). Engagement has been evaluated over the last eight mounts (January-August, 2014); thus,
the analysis has demonstrated that Gloucester citizens are not so engaged in FixMyStreet. In fact, just 4% of them
are aware about social site services. In particular, civic engagement in FixMyStreet social site has been analyzed
retrieving information from some secondary sources, such as: corporate documents and web site
(https://www.fixmystreet.com) and online rating society reports (http://urlm.co.uk/;
http://www.domainleia.com/). Last but not least, the average level of Gloucester citizens’ awareness has been
analyzed considering the visits’ number in the last eight months (1,601), and the number of published post (41).
According to this measurement, just the 2% of Gloucester population seem to be aware about the services that the
municipality offers through FixMyStreet.
Discussion
This study was aimed at investigating social media contribution to the enhancement of citizens’ participation
to public polices and services development. According to literature review, public administrations currently are
somewhat obliged to manage social media (Bryer & Zavattaro, 2011) in order to protect their public image
from unofficial communication and make citizens sure about their activities and commitment with local issues.
Furthermore, these open and participative tools have given to co-production new possibilities, making it much
more reliable and open to take in charge citizens’ contribution and suggestions. Generally, this process roots not
only on the reinterpretation of government’s role and function, but also on balance shifting from government to
society power (Linders, 2012). In fact, the recent evolution of the Internet and the related social technologies has
enhanced citizens’ online involvement in a growing number of public activities, such as: the support for
1
It has been counted the number of FixMyStreet users that have posted a report between January and August 2014.

social/political organizations, candidates, and social/political goals; mobilization campaigns; or even political
hacking. The achieved results have led to answer to the above-mentioned research questions. In particular, the
first one (Which are the civic issues in which citizens are most involved?) has been discussed through both
literature review and case study analysis, identifying citizens’ most challenging issues that promote their
cooperation with local authorities to design, produce, and provide better and high quality public services.
Moreover, the case study and, in particular, the content analysis results have offered a response to the second
research question (How collaborative platforms impact citizens’ awareness and participation in public polices
and services?). In fact, even if the adoption of a specific social platform can help national or local government to
interact with citizens, these tools are still considered as mere promotional channels and not real co-creational
spaces. This situation is even more evident in local municipalities, where people seem to be not so open to these
media, not considering they are able to support the solution of civic issues.
Conclusion
This paper offers some interesting insights in terms of how the most recent social platforms contribute to
citizens’ participation in public activities. In particular, the case study analysis has confirmed some theoretical
statements underlined in literature review; thus, these technologies have opened and simplified citizens’ access to
public services. In fact, they can contribute to public service design, development, and provisioning not only
posting and sharing links, news, photos, videos, and images on social issues (Warren et al., 2014), but also
making them able to participate in strategic and decision-making activities. In terms of theoretical implication, it
has to be noted that the mere adoption of a social platform seems to not have a direct and positive influence on
civic engagement and awareness. Although, in terms of policy implications, to achieve a better civic participation,
public administrations cannot avoid the implementation and the management of concrete online communication
strategies. In fact, the spread of social media requires not only new rules, but also a general rethinking of the
traditional co-production logic (Romero & Molina, 2011). In particular, the spread of social media in public
sector has led to the emergence of a need for innovative research to better understand their influence on
institutions-citizens relationship and civic contribution to public services design, creation, and provisioning.
However, this study is somewhat limited by the analysis of a single case study, in other words, a single
municipality participating to FixMyStreet network: Gloucester, a medium size city located in center of England.
Consequently, results cannot be considered representative and cannot be generalized to other cities involved in
we-government and/or in online participative initiatives.
References
Ackerman, J. (2004). Co-governance for accountability: Beyond “Exit” And “Voice”. World Development, 32(3), 447-463.
Alford, J. (1998). A public management road less travelled: Clients as co-producers of public services. Australian Journal of
Public Administration, 57(4), 128-137.
Bateman, R. J., Xiong, C., Benzinger, T. L., Fagan, A. M., Goate, A., Fox, N. C., ... Morris, J. C. (2012). Clinical and biomarker
changes in dominantly inherited Alzheimer’s disease. New England Journal of Medicine, 367(9), 795-804.
Berelson, B. (1952). Content analysis in communications research. Glencoe, Ill: The Free Press.
Bhatnagar, S. (2004). E-government: From vision to implementation—A practical guide with case studies. London: Sage.
Bonsón, E., Torres, L., Royo, S., & Flores, F. (2012). Local e-government 2.0: Social media and corporate transparency in
municipalities. Government Information Quarterly, 29(2), 123-132.
Brodie, R. J., Hollebeek, L. D., Juric, B., & Ilic, A. (2011). Customer engagement: conceptual domain, fundamental propositions,
and implications for research. Journal of Service Research.

Bryer, T. A., & Zavattaro, S. M. (2011). Social media and public administration. Administrative Theory & Praxis, 33(3),
325-340.
Cegarra-Navarro, J. G., Garcia-Perez, A., & Moreno-Cegarra, J. L. (2014). Technology knowledge and governance: Empowering
citizen engagement and participation. Government Information Quarterly, 31(4), 660-668.
Chun, S. A., Shulman, S., Sandoval, R., & Hovy, E. (2010). Government 2.0: Making connections between citizens, data and
government. Information Polity, 15(1), 1-9.
Dunleavy, P., & Margetts, H. Z. (2010). The second wave of digital era governance. 2010 Annual Meeting of APSA.
Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532-550.
Gigler, B. S., Custer, S., Bailur, S., & Dodds, E. (2014). Closing the feedback loop: Can technology amplify citizen voices?
Closing the Feedback Loop, 211.
Hoffman, D. L., & Fodor, M. (2010). Can you measure the ROI of your social media marketing? Sloan Management Review,
52(1), 41.
Johnston, E. W., & Hansen, D. L. (2011). Design lessons for smart governance infrastructures. American Governance, 3, 197-212.
Joshi, A. (2013). Do they work? Assessing the impact of transparency and accountability initiatives in service delivery.
Development Policy Review, 31(1), 29-48.
Kietzmann, J. H., Hermkens, K., McCarthy, I. P., & Silvestre, B. S. (2011). Social media? Get serious! Understanding the
functional building blocks of social media. Business Horizons, 54, 241-251.
Linders, D. (2012). From e-government to we-government: Defining a typology for citizen coproduction in the age of social
media. Government Information Quarterly, 29(4), 446-454.
McGuire, M. (2006). Collaborative public management: Assessing what we know and how we know it. Public Administration
Review, 66, 33-43.
Merton, R. K. (Ed.). (1968). Social theory and social structure. London: Simon and Schuster.
Norris, D. F., & Moon, M. J. (2005). Advancing e-government at the grassroots: Tortoise or hare? Public Administration Review,
64-75.
Noveck, B. S. (2009). Wiki government. Washington, DC: Brookings Institutions Press.
O’Reilly, T. (2011). Government as a platform. Innovations, 6(1), 13-40.
Orszag, P. (2009). Open government directive. White House, Washington, DC.
Roberts, K. (2005). Lovemarks: The future beyond brands. New York: Powerhouse Books.
Romero, D., & Molina, A. (2011). Collaborative networked organisations and customer communities: Value co-creation and
co-innovation in the networking era. Production Planning & Control, 22(5-6), 447-472.
Sharp, E. B. (1980). Toward a new understanding of urban services and citizen participation: The coproduction concept. The
American Review of Public Administration, 14(2), 105-118.
Stemler, S. (2001). An overview of content analysis practical assessment. Research & Evaluation, 7(17), 137-146.
Torres, L. H. (2007). Citizen sourcing in the public interest. Knowledge Management for Development Journal, 3(1), 134-145.
Uslaner, E. M., & Brown, M. (2005). Inequality, trust, and civic engagement. American Politics Research, 33(6), 868-894.
Warren, A. M., Sulaiman, A., & Jaafar, N. I. (2014). Social media effects on fostering online civic engagement and building
citizen trust and trust in institutions. Government Information Quarterly, 31(2), 291-301.
Weerakkody, V., Irani, Z., Lee, H., Osman, I., & Hindi, N. (2015). E-government implementation: A bird’s eye view of issues
relating to costs, opportunities, benefits and risks. Information Systems Frontiers, 17(4), 889-915.
Wellman, B., Haase, A. Q., Witte, J., & Hampton, K. (2001). Does the Internet increase, decrease, or supplement social capital?
Social networks, participation, and community commitment. American Behavioral Scientist, 45(3), 436-455.
Yin, R. (2003). Case study research: Design and methods. London: Sage Publication.

doi: 10.17265/1537-1506/2016.07.003
D DAVID PUBLISHING
Islamic Finance in Theory and Practice
Muhamad Abdul Aziz Muhamad Saleh Jumaa

City University College of Ajman (CUCA), Ajman, UAE
Perspectives of the early scholars of Islamic management of an account concurred that the arrangement of organization
partnership in general and Murabah (benefit sharing) specifically is the fundamental technique on which Islamic
banks must depend on contributing their money to related assets. Also, the research has found that financing under
the Islamic management of an account has decreased intensely from the methodology created by the early scholars.
In reality, these banks have received obligation based on financing techniques and underestimated the routines for
financing taking into account benefit and loss sharing. This adjustment in financing technique has perversely
influenced the bad name and the desire tied with the monetary part of these banks. The study focused on the reason
behind the gap between theory and practice in Islamic finance. So, the study was divided in two parts: the first
theoretical part of Islamic economy and Islamic banking system, the second practical part by analysing and
evaluating the relative distribution of Islamic financing methods in four famous Islamic banks. The study selected a
group of Asian Islamic banks as a model for analysis and evaluation through the period from 2012 to 2014. The
study concluded that the gaps result from the misuse of the roles and norms of Maqasid Al-Shariah along with the
diversion in the relatively allocation of the financing methods toward debt instruments rather than equity instruments.
Keywords: Islamic banks, Islamic finance, conventional banks, accounting, finance, financial statements
Introduction
Two perspectives shape the relationship in the middle of Islam and account. One is Islamic law, the
Shariah cases to control all parts of life, moral, and social, and to envelop criminal as ill as common preview.
Each demonstration of devotees must adjust to Islamic law and watch moral guidelines got from Islamic
standards. These moral standards characterize what is genuine, reasonable, and simply, the nature of corporate
obligations and the needs to society. Second, notwithstanding giving an arrangement of business morals, certain
Islamic financial and money related standards have an immediate effect on monetary frameworks. These
standards incorporate, in particular, the organization of zakat (the religious charity) and the forbiddance of
Reba (usury) and the foundation of an interest free financial framework.
The two speculatives in Islamic jurisprudence are the rightful appropriate decades who can rely on them in
the establishment of the Islamic banks served as usurious banks.
Initiating looking for other tools which are more profitable and less risky as well as easier application
resorted to finance instruments of business for margin profit, which led to the emergence of a variety of funding
methods such as Murabaha and Ijara. These operations overshadowed the other and it is what made the
Muhamad Abdul Aziz Muhamad Saleh Jumaa, Ph.D., assistant professor, Chair of Department of Finance & Accounting, City
University College of Ajman (CUCA), Ajman, UAE.
Correspondence concerning this article should be addressed to Muhamad Abdul Aziz Muhamad Saleh Jumaa, Department of
Finance & Accounting, City University College of Ajman (CUCA), 18484, Ajman, UAE.

ISLAMIC FINANCE IN THEORY AND PRACTICE 335
practical application of the experience of Islamic banks deviate from the theory which Italians have developed,
which still has the support of most of those people who are interested in the Islamic financing system of the
modern era.
Is this fact makes people wonder about the extent of deviation witnessed practical experience of Islamic
banks which have a framework for a theory? The question is also about how these banks need to evaluate their
career?
And it is what the research will try to answer in the study which aims to shed light on the financing
function of sites in the Islamic banking currently by monitoring the experiences of some Islamic banks relying
on high-descriptive analytical method which includes the search along with the point view from issuing the
book of Islamic banking.
Practical side the stufy will focus on analysing policy of funding in the financial annual reports for some
Islamic banks relying on financial statements for being more styles appropriate to the nature of the study and its
objective is to evaluate the extent of the gap between the theoretical and practical side of Islamic finance.
Literature Review
Utilizing from different studies that follow the year 2000, which presented the subject of Islamic banks
notion and highlighted its congruity for Islamic account; clarified the real components of Islamic law and
preclusion concerning Islamic account; addressed the utilization of “nominate” that contracts and guarantees
(or legitimately tying one-sided endeavours) in organizing Islamic monetary issues; and discussed the
administrative that issues an defined administration and social obligation.
Also a lot of studies and researches discussed the success factors of Islamic banks and the problems faced
by Islamic banks.
y Monzer Kahf (2005) studied entitled: “The success factors of Islamic banks”.1
Kahf, in his study, discussed several cases related to the standards of success of the Islamic banking, he
selected a sample from famous Islamic banks “Bahrain Islamic banks” in four years from 2001-2004, and
concluded a success criterion through basic indicators relating to Islamic banks profit system.
y Nasser Al Ghareeb studied in 2010, entitled: “Islamic banking assets and operating issues”.2
The study discussed the legitimacy for banking issues and the history of Islamic banking and Islamic
funding framework. Also he handled the problems that are faced by Islamic banks and their relationship with
the central bank; he discussed the measurement and distribution of profits in Islamic banks and determined the
criteria of distributing profits.
y Manawar Iqbal studied, in 2007, entitled: “A comparing study between Islamic and conventional banks in
the nineties”.3
The study’s purpose was to discuss the Islamic banks system in order to bridge the gap in data from
2003-2006. The researcher used multiple hypotheses, experiments, and analytical equations to achieve the goals
needed to compare Islamic banks with conventional banks.
1
Kahf Monzer (2005). The success factors of Islamic banks, Islamic Study and Training Institute, Islamic Development Bank,
Jeddah, KSA.
2
Nasser Al Ghareeb (2010). Islamic banking assets and operating issues, Islamic Study and Training Institute, Islamic
Development Bank, Jeddah, KSA.
3
Manawar Iqbal (2007). A comparing study between Islamic and conventional banks in the nineties, Islamic Study and Training
Institute, Islamic Development Bank, Jeddah, KSA.

336 ISLAMIC FINANCE IN THEORY AND PRACTICE
Study Objective
The main purpose of this study is to:
(1) understand the basic rules and sources of Islamic financing;
(2) address the reason behind the gap between theory and practice in Islamic financing that violate the
Islamic economic principles.
Study Question
(1) Do banks misuse the rules and norms of Maqasid Al Shariah, and if yes in what ways?
(2) Who is responsible for the misuse of the rules and norms of Maqasid Al Shariah?
(3) Why Islamic banks depend mostly on debt instruments rather than equity instruments?
Hypotheses
H1: The gap results from the misuse of the roles and norms of Maqasid Al Shariah only.
H2: The gap results from the misuse of the roles and norms of Maqasid Al Shariah along with the
diversion in the relatively allocation of the financing methods between debt and equity.
Methodology
The study will depend on two sources, first on principle of Islamic economy which relays on The Holy
Quran, The Sunnah, and Maqasid Al Shariah that have not been changed since the Islamic revolution and
compare them with the new methodology used by Islamic banks in offering the new services in the absence of
clear direction from both “Quran and hadith”.
Secondly, analysing and evaluating different financing methods offered by Islamic banks in Asia.
A Theoretical Method of Islamic Banking Financing

Basic Principles of Sharia Law
y The Holy Quran includes message and command from Allah which has been sent down by Prophet
Muhammad peace is upon him to guide people to the right direction.
y Hadith “Sunnah” is a collection of information, history, account, variation, and records of the Sunnah that
was created by Prophet Muhammad (P.B.U.H.). Hadith also describes the prophet’s behaviour, method of any
action, declaration, and saying under assortment of circumstances during prophet’s lifetime.
y Ijma is the unanimity of opinion on agreements of Muslim juries on any problem to determine a special
legislation.
y Qiyas and Ijma are branches of Sharia law, these sources are a solely complete and overall the Sharia law
itself has yet to be formulated so as to adjust foreseen consequences and also to overlook Islamic banking
system with it.
y Means of legislation: ijm’a, qiyas, and ijtihad.
y Typically, most analysts of Shari’a write that ijm’a is the third source of legislation. In reality, it is ijtihad.
One may consider ijtihad to be the third source because this is the result of either individual scholarly effort or
collective scholarly and juristic analysis. The latter, or collective, ijtihad is ijm’a. The areas which comprise
ijtihad include: qiyas, istihsan, and urf (Archer & Abdel Karim, 2007; Choudhry & Mirakhor, 1997).
y Gharar (Interest): Gharar (Interest) is not allowed in Islamic banks, but in commercial banks, they may use

Gharar to the client and get as much profit as they can from the customer.
Gharar transaction occurs when one party can only benefit by the other’s loss. Under conditions of
uncertainty, commercial insurance is given as an example, since either the insured pays a premium and receives
no counter value, or the insurer pays out much more on a claim than was received by way of premium.
Professor Mahmoud el-Gamal stated that Gharar involves the trading of unknown risk. For example, if a home
owner insures his home conventionally against damage by fire, then the homeowner can be said to have
separated the risk of fire from the right of ownership of the house (in other words, to have “unbundled” risk and
ownership). The insurance company is paid to accept the risk of damage by fire, while the homeowner retains
ownership of the house.
Establishment of Islamic: Brief Historical Perspective
Figure 1 illustrates a brief history about the establishment of Islamic banks and institutions (Archer &
Abdel Karim, 2007, p. 27).
Figure 1. Establishment of Islamic banks and institutions: a brief historical perspective.
Basis, Objectives, and Principles of Islamic Economics as a System

An Economic System is an organised way in which a state or nation allocates its resources and apportions
goods and services in the national community.
The ethical base of the Islamic Economic System provides the Value System through which it governs all
forms of economic interaction in society (e.g.: religion, ideology, ideals, morals, etc.).

Thus, the Islamic Economic System has its basis and objectives on one hand and with its axioms and
principles on the other hand.
Islamic economics created a new system, the features of which can be defined as:
(1) It describes, analyses, and prescribes with a background of Shariah.
(2) It deals with production, consumption, and distribution activities of human beings according to Islamic
worldview.
(3) It offers economic and financial choices according to Islamic norms.
(4) It is part of a Religion (Islam).
(5) It depends on different sources for the theory of knowledge (Epistemological sources) i.e.: the Holy
Qur’an and the Sunnah.
Its fundamental concepts—being based on the Qur’an—are divine and not open for changes in meaning.
Methodology of Islamic Economics
The methodological postulates of Islamic economics can be summarised as follows (Kahf Monzer, 2003):
y Socio-tropic individual, for whom independence as ill as social concern is an essential.
y Behavioural postulates: socially concerned God-cognizant people who
- in looking for their preference are worried with the social great;
- conduct financial movement rationally as per Islamic limitations with respect to individual and social
environment and the great beyond;
- in attempting to expand his/her utility try to amplify social welfare too by considering the hereafter.
y The primary component of financial operation in the Islamic framework is market exchange separated
through an Islamic process that does not harm the society environment.
Mechanisms and Instruments of Islamic Economic System
The objective of the establishment of the Islamic financial system is to accept the case that Islamic financial
system is an “option framework with its particular quality, aphorisms, foundational standards, and organizations”.
Islamic financial system gives establishments honing the Islamic economy differently contrasted with
other conventional system. These Islamic establishments are “identified with business (muamalat) additionally
to the administration of the economy and business sector, for example, (hisbah) as a regulative foundation for
the business sector framework”.
Islamic economic and financial activities are shaped by three kinds of measures and institutions:
(1) Positive measures, such as Al Zakah to react to the necessities of poor people and ease destitution.
Strategies have been produced to methodically deal with the Al Zakah stores: rather than essentially offering
assets to the poor for their quick utilization, “creating ventures for the supportability, survival, and congruity of
the financially less blessed is the new technique with Al Zakah reserves”. “Hisbah is another vital positive
organization in the Islamic monetary framework that manages the business sector component by reacting to its
disappointments and deficiencies and beating its overabundances”.
(2) Voluntary measures, for example, Al Sadaqah goes for giving the quick needs of a person.
Al Waqf (pious foundation) is a piece of the voluntary sector, pointing to give merchandise and benefits,
wellbeing administrations, instruction, sustenance appropriation, and so on. Notwithstanding, human advancement
undertakings are done so as to improve their commitments to the financial advancement of the social orders.
(3) Prohibitive measures, such as Reba money related action. (Islamic financial framework proposes

benefit and misfortune sharing and chance taking and sharing against foreordained capital increases to thought
process people to effectively take part in the economy).
Takaful or Islamic protection is another critical part of Islamic money related establishments, which work
on a non-premium premise. It gives Islamic consistent protection items to people and business, yet it likewise
oversees reserves in an Islamic way, adding to financial development.
The presence and effective operation of these establishments are an indication that Islamic financial
matters are its very own arrangement with its qualities, sayings, and foundational standards, furthermore, with
its specific organizations, which work inside of the Islamic structure (Hassan & Lewis, 2007).
Islamic Finance: Ideals & Realities
However, Islamic finance follows a very pragmatic development that is located within the neo-classical
paradigm.
Along these lines, in its present state, Islamic account does not appear to share the foundational cases of
Islamic financial aspects. A particular component of the late talks on Islamic managing an account has been the
developing wedge between its routine hypothesis and current practice.
The outcome, subsequently, has been the uniqueness between the suspicions, standardizing standards, and
goals of Islamic financial matters as a framework and Islamic money as an instrument of that framework.
In other words, a particular element of the late talks on Islamic managing an account has been the
developing wedge between its customary theory and current practice. The substances of budgetary markets
which organize monetary motivating forces as opposed to religious behavioural standards has “constrained”
Islamic money to wind up a portion of the worldwide monetary framework, in which it is perceived as
heterogeneity of monetary items denied of their worth framework.
Currently, Islamic fund speaks to half breed monetary results of the worldwide money related framework.
In this manner, the distinction has been decreased to detail, and the worth framework is no more said past
quoting so as to portray the disallowance of Reba verses in the Qur’an.
Despite what might be expected, Islamic financial aspects’ perusing of the same Shariah rules underscore
social equity, need satisfaction and redistribution, in particular a socio-political perusing inside of a political
economy structure.
Tolerating the present condition of Islamic money is a trade-off earnestly requiring new model of
improvement inside of the idea of Islamic good financial framework.
The failure of Islamic finance needs to be urgently moderated.
Basic Principles of Islamic Financing
Fundamental principles of the Islamic finance. Islamic Finance gives high thought to the concept of
social justice and deals with poor people and frail.
Development of Islamic finance. In the course of the most recent 40 years, Islamic saving money has
risen as a reasonable and productive model of budgetary intermediation. Trusts were this new model of
monetary intermediation which could convey to society development and improvement, as Islamic managing
an account satisfies the religious prerequisites of an extensive rate of worldwide populace and extends the
decision for all, in this way expanding productivity and asset distribution.
Evolution of Islamic financial institutions. The Islamic Finance Sector is showing fast development
modes with a yearly development rate of more than 15%, but it does not cover the Islamic nations; additionally,

include around 360 financial establishments in more than 50 nations.

According to “islamicfinance.com”, the size of the Islamic finance market is evaluated to be in the reach
from $1.66 trillion to $2.1 trillion with desires of business sector size to be $3.4 trillion by end of 2018.
In light of $1.66 trillion, Islamic Finance resources spoke to 1% of the worldwide money related business
sector of $127 trillion in assets (Figures 2, 3, 4, and 5) (Hussein, 2012).
Asset value per asset.
Figure 2. Islamic finance assets by domicile.
Figure 3. Global Islamic finance assets.
Figure 4. Global Islamic finance assets (2009-2014E).

Figure 5. Global Islamic fund assets trend.
Many commercial global banks are providing Islamic banking services through special “Islamic Windows”.
Islamic Finance Methods

Financing Instruments
Murabaha in Islamic banking. Murabaha is the major channel of financing in Islamic banking because it’s
a legal commercial transaction in Islamic law; furthermore, it provides customers with finance without Reba since
the Islamic bank buys the commodity and sells it to the customer by instalments which meet his cash flows ability.
The bank receives an agreed profit in return. Bank’s profit = selling price – buying price. The bank gets
this profit from the followings (Shaker, 2010):
(1) It provides the customer with the appropriate financing versus acceptable profit.
(2) It bears a risk during the period between buying and selling the commodity to the customer.
The study can use Murabaha to finance all legal and commercial transaction.
Bank can carry out Murabaha for deferred purchasing orders which are listed below:
y First phase: The customer applies for product purchasing order through Murabaha.
y Second phase: Secondly, the bank studies the customer’s credit worthiness through analysing his character,
capital, capacity, conditions, collaterals, commodity legality, and commodity of profitability which must be
able to comply with the bank’s credit policy.
y Third phase: Third step is that, if the bank agreed with customer’s statements then the customer would
have to sign a contract of promising purchasing order and pay the demanded amount to the bank.
y Fourth phase: The bank contacts the supplier and buys the product for its customer, and they would bear a
risk during the period in which he owns the commodity. Usually, the bank retains an agent on the costumer’s
behalf to buy the product and own it under his name until it is completely under the name of the costumer.
y Fifth phase: In fifth phase, the bank signs a selling contract with the customer after the collaterals for the
credit have been accepted and approved by the bank.

y Sixth phase: The customer will be committed to pay the instalments on time, but if he defaults to pay on
time (ta’asa), the bank would study his situation:
- If he was insolvent (mo’ser), he will be given an extension period without any addition fees. Verse: (wa in
can tho o’srah fnathertn ela maisera);
- If customer owns the money but he does not pay, the bank will charge him the expenses that the bank
bears (the real expenses not the expected ones).
y Seventh phase: Finally, if the customer fails to fulfil the promise and does not receive goods, the bank will
sell the product. If there are losses, he will take it from the safe margin.
- However, in the reality, the customer is not contacting with the banks directly, but the customer is going to
the showroom and chooses the car that they want to sale and agree with the exhibition, and they will agree how
much he has to pay, after that the bank will send delegate to sign the agreement with him, then the process will
be completed by the banks and the owners of the car, in this situation, it will be considered as (Gharar) interest,
the bank is involved in cheating the customer in this way.
- Furthermore, the bank should negotiate with the owner of the car not the customer and the customer
should not contact with the owner of the car without the presence of the third party (bank).
Case Study
Calculating the product cost. The cost = purchasing expense + all expense until the commodity would be
received. Suppose that one customer asks the bank to import goods for him through Murabaha, The costs and
expense Ire: (Invoice) = 1,000,000 AED; Credit expenses = 100,000 AED; Customs tariffs = 200,000 AED;
Transportation charges = 50,000 AED; So, the total cost = 1,300,000 AED.
Calculate Islamic bank’s profit. Suppose that bank agrees with customer that: Bank profit = 15% of the
total cost; Safe margin = 300,000 AED; Murabaha duration: 20 months; Total cost = 1,300,000; Minus profit
margin –300,000 AED; Finance amount = 1,000,000; Plus Murabaha profit +150,000; Total indebtedness =
1,150,000 AED; Instalment amount = 57,500 AED.
Profit & instalments distribution. The instalments plus profit are: Year 2000: 8 instalments 57,500 × 8 =
460,000 AED; Year 2001: 12 instalments 57,500 × 12 = 690,000 AED. The profit distribution: Instalment’s
share of the profit = 150,000/20 = 7,500 AED; First year profit = 7,500 × 8 = 60,000 AED; Second year profit
= 7,500 × 12 = 90,000 AED.
The customer breaches the contract and does not receive the product. Assuming that the customer
refuses to buy the product after the bank buys it: (Turnover) Total cost = 1,300,000 AED; Safe margin =
300,000 AED. The bank sold the goods: The bank sold the goods at price = 1,400,000 AED, in this situation,
bank returns the safe margin (300,000) plus 100,000 profit. The bank sold the goods at price = 1,100,000 AED,
in this situation, banks returns 100,000 AED of safe margin 10,000 = (Safe margin – losses amount). The bank
sold the goods at price 800,000 AED, in this situation, the bank never returns profit margin, and he bears losses
at 200,000 AED.
Mudarabah Financing
In any contract of Mudarabah, the Islamic bank will provide the entrepreneur of the capital he asks for,
and he should contribute with his management and experience. Also, the loan will be borne by the bank while
the profit will be shared on agreed base, Accounting and Auditing Organization for Islamic Finance Institution
(AAOIFI). Shariah standards for Mudaraba have certain rules, these rules should be adhered from both parties

for any finance contract and any contract has to get passed from Sharia compliant, any customer wants to involve
in Mudarabah finance will become Mudarib, the bank or the institution will provide him with Islamic finance
service (IFI) and he/she will become (Rab al mal) all of this and will be on an agreement between bank and
customer and this will establish an executed transaction via Mudarabah contract (Ausaf Ahmad, 1993).
(1) Memorandum of understanding (MOU) will be followed by execution of all multiple Mudaraba
contracts or Mudarib contract.
(2) The state of MOU:
1. Mode of intended financing i.e. unrestricted or restricted instrument of mudaraba finance.
2. Mudarib should bear a pre-agreed percentage to cover any losses that appear from negligence breach of
misconduct of contact.
3. Profit allocation ratio.
Types of Mudaraba Tools
Mudaraba financing has two main types: restricted and unrestricted. In restricted contract, the capital of
(Rab al mal) will have the authority to manage the fund but with certain restriction. For instant country
exposures, however, in unrestricted the Mudaraba contract allows the capital to manage the funds without any
restriction and Mudaraba capital must be intangible asset or cash.
In Mudaraba, there are links between Maqasid al-Shariah and Islamic economy (The Application of
Maqasidal-Shariah in Islamic Finance, n.d.). The study reported that the bank will be a supplier and the
borrower will take the money to start the project, whenever he gets the profit, it will be shared on an agreed
base. In this situation, the bank will take his original money and the profit; furthermore, it is concluded that no
gap is found in Mudaraba.
The Practical Dimension of the Islamic Banking Format of the Mudaraba Contract
A client who is unable to finance an asset requires financing for that asset and thus approaches the bank.
Since the Islamic bank cannot lend the client money in return for interest, the bank offers to buy the
required asset from the seller in order to gain ownership, which is an Islamic pre-requisite for it is able to sell
the asset to the client.
The cost of purchasing the asset from the bank is calculated (entailing the cost of the goods + % percentage
marked up by the bank). Other legal and administration costs are then also added in order to calculate the final
cost. The % percentage marked up by the bank varies in relation to the period of repayment and is also determined
by Islamic banks in non-Muslim and Muslim countries via the current interest rates of conventional banks.
Normally, any up-front payments towards financing the asset sought by the client are deducted, and a
mark-up is placed only on the amount financed. For example, in car stuffs, the value of any car traded in as part
of the sale is deducted from the purchase price of the car that is purchased.
If the customer accepts the final and calculated or pre-determined cost of purchasing the asset from the
bank, the bank purchases the asset from the seller and sometimes profits through receiving a cash discount. If
such discounts are received, the asset cannot be sold on the basis of a Murabaha if the discount is concealed.
However, prior to purchasing the asset, the bank also has the client signed a legally binding contract that he will
subsequent to the bank’s purchase that asset himself from the bank for the specified amount. The bank will not
buy the asset unless the (potential) buyer’s promises to purchase are binding. The asset is either purchased
directly by the bank or, as is customary, the client is asked to act as an agent on behalf of the bank. An agency

agreement is concluded in which the client is also authorized to take delivery of the goods. However, the
supplier of the goods shall invoice the bank and not the agent for the goods. This requirement has been waived
by some banks in order to meet local tax requirements.
The bank bears any risks from the date of delivery by the supplier to the bank until the date and time of
resale of the asset to the client.
Ownership is transferred to the client only after full payment of the purchase price. In the interim prior, the
bank retains constructive possession.
Clients are obliged to insure the assets at their own cost, even though owner-ship may not have been
legally transferred to them.
Musharaka (or Sharika) Financing
Musharaka is partnership between the client and the bank as each of them participates in the contract
either on assets or working capital, furthermore the Musharaka contract has no fixed rules, each of the contracts
is dealt with on its own worth, there is no restriction on the contract, so it means one contract might last for
couple of weeks or even couple of years. Profit share in the contract is based on the agreement between the
parties as they discussed and agreed on. But in some cases of loss, it will be shared by the capital provider. So,
in few words, Musharaka contact is simply, a contract between two partners, each of them participates in
projects in forms of cash or expertise and they share the profit and loss depending on the contract that has been
agreed between both of the parties (Totaro, 2009).
In Musarkaha finance, there is a gap between the bank and Maqasid al-Shariah as typically the bank has
the opportunity to cancel the agreement any time, as soon as the bank finds any fault from the customer or if
there is any risk that might affect the bank.
Salam (Baie al Salam)
Salam is a sale where the seller undertakes to supply a specific product to the buyer at a future date, so
they can agree on a specific price and a specific delivery time as agreed in the contract. This Islamic type of
finance was created to meet the needs of small farmers who required money to grow their crops as they were
allowed to sell some of their products in advance and after collecting the new crops they can return the money
or profit to the bank. Salam can be used for the type of products where the quality and quantity can be
measured in advance. For instance, it cannot be used for vegetables or fruits as there is a probability that the
tree might be destroyed before the yield (Figures 6 and 7).
In salam (baie al salam), there is a gap between the bank and Maqasid al-Shariah as typically some banks
might misuse the gap in baie al salam which contains a high risk for some banks, for example, a customer
borrowing the money has the opportunity not to give the money back for any reason so the bank will not take
the risk and they will charge high profit to be in the safe side, as they might create their own fatwa to support
themselves (Figure 8) (The Holy Qur’an, Al-Baqarah, 2:278).
Figure 6. Quran verse of prohabiting interst (The Holy Qur’aan, Al-Baqarah, 2:275).

Figure 7. Quran verse of contradiction of (baie al salam) (The Holy Qur’an, Al-Baqarah, 2:278).
Figure 8. Mechanizm of (baie al salam) in Islamic banks.
Ijarah
Ijarah term means to give something on rent, literally, it can be utilized for specific transaction when the
service is provided for someone in exchange for something. For example, hiring (renting) a lawyer or an
engineer to provide a service for exchange of money. However, in renting a specific property, there is a third
party, the third party will benefit from the profit but the ownership remains the same.

346 ISLAM
MIC FINANCE
E IN THEOR
RY AND PRAC
CTICE
There is
i a contract ffor leases for specific
s periodd that has beeen agreed amo
ong all the parrties (Ausaf A
Ahmad,
1993).
Type of Ijarah Contactss
(1) Thee rental paid ffor specific du
uration of the lleases.
(2) Thee lessor unilatterally agreed to sale the renntal at the endd of the period
d.
In Ijaraah, the study ddid not see any
y gap becausee it’s simply a deal between n the tenants and
a rented, they rent
a product orr a service too a client and in this situattion there is no n risk for the banks and thet parties innvolved
(Figures 9, 10,
1 and 11).
Figure 9. Thee mechanizm off Ijarah.
Figgure 10. Quran verse

v to explain Ijarah (The Holly Qur’an, Al-Im
mran, 3:130).
Figure 11. Quraan verse to explaain Ijarah.
Investmentt Instrumentss
These are
a vehicles fofor capital instruments as ann association.
y Mudaraabah (‫)اا ﻤﻀﺎرﺑﺔ‬: A fund adm ministration innstrument couuld be short, medium,
m or loong term, wheereby a
financial speecialist deposits money to operators
o to atttempt a task.
y Musharrakah (‫)ا ﻤﻤﺸﺎرآﺔ‬: A value organization instrument which w could be either meedium or longg term

association, where two or more persons join either their capital or their work to share the profit and losses.
The Sukuk Market
y Sukuk are investment certificates (Islamic Bonds).
y Sometime, they represent “ownership” in the assets underlying the issue.
y Those with variable profits are based on Mudarabah or Musharakah.
y More pervasive are those with pre-picked and adjusted wage. The clearest of these is the one considering
ijarah, i.e., rent or use. A building (or an oil tanker) is procured and leased; the cash paid for buying the asset
and then leased to the borrower should be pre-agreed by the two parties. Proprietors of these affirmations would
meet all pre-requisites for getting a touch of the rent.
y These certificates can be traded in the market. These assets are sold by the originator to a Special Purpose
Entity (SPE) and then are leased back at a specified rent. The SPE securitizes the assets by issuing Sukuk
certificates that can then be purchased by investors.
y There are Sukuk based on Salam or istisna’ contracts (Agricultural produce or manufactured goods to be
available in the future may form the basis of salam/istisna’ bonds).
y Also there are hybrid issues whose underlying assets are mixtures of these.
y Murabahah receivables being debt obligations are not considered fit for Sukuk issue, but they have been
accepted in such a mixture as long as they are in a minority.
Islamic Financial Institutions
Islamic banks. These come as a half of customary business banks and venture banks. They might fit in
with the general population or private part.
Islamic windows (in conventional banks). These are uncommonly setups that offer Shariah-agreeable
items.
Islamic investment banks & funds. These are “planning to profit by substantial venture syndications,
market-production and under composing opportunities”.
Islamic mortgage companies. These companies’ objectives are fundamentally to lodge the market for
Muslim groups in western nations. They act through usage of:
y Ijarah ‫ إﺟﺎرة‬.
y Diminishing Musharaka (Equity partnership‫)ﻣﺸﺎرآﺔ ﻣﺘﻨﺎﻗﺼﺔ‬.
y Murabahah (Sales transaction ‫)ﻣﻌﺎﻣﻠﺔ ﺑﻴﻊ‬.
y Along the lines of corporative societies.
Islamic Insurance Companies (Takaful ‫)ا ﺘﻜﺎﻓـ‬
The Takaful means a given solidarity, a common or joint surety, whereby the members attempt to share
their misfortunes by contributing intermittent premiums as venture. They need to recover the lingering
estimation of benefits in the wake of satisfying cases and premiums, which is a basic distinction between
contemporary protection and Takaful.
Mudharaba Companies
Similar to that of closed-end fund managed by specialized professional management companies, unlike the
Islamic bank, they are not allowed to accept deposits, funded by equity capital.
These may be multipurpose (more than one venture reason), or specific reason organizations.

Outline of the Basics of Islamic Finance

y Usury-free practices.
y Risk-sharing.
y Divinity of honouring contracts.
y Moral/Ethical dimension.
y Socio-economic background (empathy, equity, and fairness).
Analysis of Islamic Financing Methods by Islamic Banks

It became clear that the theoretical side is posed by intellectual sources, the initial system is the primary
method of posts which must rely upon the Islamic banks and that’s because of the positivity of this system on
the side of economic conditions. Is the practical application of the way of Islamic banks in line with this
proposal?
To find out the reality of Islamic finance in the practical application, the study will examine the relative
distribution of the Islamic financing methods in some Islamic banks, and it has chosen a group of Asian Islamic
banks as a model for the study through funds provided by these banks in the period from 2012 to 2014 analysis.
Table 1
Malaysian Bank
2012 2013 2014 Mean
Years/Financing methods Amount Amount Amount
% % % %
RM ’000 RM ’000 RM ’000
Murabahah & sell on account 22,427,825 56.49 27,829,382 58.40 30,986,549 66.65 60.52
Ijarah 15,232,593 38.37 18,736,382 39.32 14,373,482 30.92 36.20
Mudarabah 30,233 0.08 25,712 0.05 0 0.00 0.04
Musharakah 1,866,505 0.36 998,267 2.09 1,113,863 2.40 1.62
Selling loans 64,696 1.36 28,754 0.06 3,004 0.01 0.48
Other service 78,637 2.36 33,456 0.07 11,243 0.02 0.82
Total 39,700,489 100.00 47,651,953 100.00 46,488,141 100.00 100.00
0 10 20 30 40 50 60 70
Murabahah & sell in account
Ijarah
2012
Mudarabah 2013
2014
Musharakah
Selling Louns
Other Service
Figure 12. Allocation of Islamic financing tools at Malaysian Bank.
From Table 1 and Figure 12, the displayed data become clear as follows:

(1) Murabaha and forward sales ranked first in total funds with an average of 60.52%.
(2) Then comes the leasing, which ends with ownership weighing as much as an average of 36.20%.
(3) Mudarabah and Musharakah occupied a very marginal importance of reaching an average of 1.62% for
the post of diminishing while for the non-existent of Mudarabah, it’s only 0.04%.
(4) Bank did not use the process of Mudarabah in their financing in 2014.
(5) The absence of some other financing methods such as al Salam and Istisna during all the years of
studies.
Table 2
Qatar Islamic Bank
2012 2013 2014 Mean
Years/financing methods Amount Amount Amount
% % % %
QAR ’000 QAR ’000 QAR ’000
Musharakah 58,634 0.18 49,872 0.13 55,982 0.13 0.15
Murabahah 22,093,837 68.67 25,983,744 70.26 30,987,383 69.63 69.52
Istisna contract 3,378,273 10.50 3,368,374 9.11 4,983,748 11.20 10.27
Mudarabah 583,736 1.81 682,736 1.85 1,113,863 2.50 2.05
Ijarah 5,982,733 18.59 6,763,528 18.29 6,872,834 15.44 17.44
Other service 78,645 0.24 133,965 0.36 487,432 1.10 0.57
Total 32,175,858 100.00 36,982,219 100.00 44,501,242 100.00 100.00
0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00
Musharakah
Murabahah
2012
Istisnah Contract
2013
Mudarabah 2014
Ijarah
Other Service
Figure 13. Allocation of Islamic financing tools at Qatar Islamic Bank.
From Table 2 and Figure 13, the explanations are as follows:

(1) Murabaha comes in the first priority in financing tools by the bank with an average of 69.52%.
(2) Leasing ended by ownership comes in second, with an average of 17.44%.
(3) Mudarabah and Musharakah occupied a very marginal importance of reaching an average of 2.05% for
speculation while virtually non-existent for the Musharakah, as it stood at 0.15% only.
(4) The absence of some other financing methods such as al slam and Alasisnaa during all years of studies.
(5) Noting that: Murabaha and Alsaomat continue to increase over three years although the rates of
increment, there is an indication of growing interest of the bank to these tactics.
(6) Mudarabah, leasing, and Istisna continuously decline in all years of study.

Table 3
Jordan Islamic Bank
2012 2013 2014 Mean
Years/Islamic financial service Amount Amount Amount
% % % %
JD ’000 JD ’000 JD ’000
Murabahah 876,376 67.84 856,767 66.00 909,873 69.06 67.63
Sell in account 2,182 0.17 2,767 0.21 3,028 0.23 0.20
Rent end up with owns 398,298 30.83 422,873 32.58 387,873 29.44 30.95
Musharakah 14,987 1.16 15,676 1.21 16,787 1.27 1.21
Total 1,291,845 100.00 1,298,085 100.00 1,317,563 100.00 100.00
0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00
Murabahah
sell in account 2012

2013
Rent end up with owns 2014
Musharakah
Figure 14. Allocation of Islamic financing tools at Jordan Islamic Bank.
From Table 3 and Figure 14, the data shown above give a clear picture which is as follows:
(1) Murabaha holds the lion’s share of the other modes of financing where Murabaha ranked first with an
average estimated 67.63%.
(2) What comes in second place is the rent ended by ownership with averaging 30.95%.
(3) Musharakah weight appeared very weak, where it reaches an average of only 1.21%.
(4) The bank did not depend on Mudarabah during the three-year study.
(5) Not only Mudarabah formula is absent from the methods of financing in the bank, but also absence of
both the peace and also Istisna.
(6) Noting: Murabaha recorded a steady decline in three years, but in very small amount which did not affect
the acquisition of this formula on the bulk of the funding plans which did not go down to 80% during these years.
Table 4
Al Rajhi Bank
2012 2013 2014 Mean
Years/Islamic financial service Amount Amount Amount
% % % %
SAR ’000 SAR ’000 SAR ’000
Trading 44,898,374 32.75 41,727,342 30.15 49,873,874 32.37 31.76
Murabahah & installment 90,938,728 66.33 95,637,872 69.11 102,983,748 66.84 67.42
Istisna contract 598,940 0.44 293,892 0.21 398,273 0.26 0.30
Other service 673,622 0.49 728,273 0.53 827,363 0.54 0.52
Total 137,109,664 100.00 138,387,379 100.00 154,083,258 100.00 100.00

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00
Trading
Murabahah & Installment 2012

2013
Istisnah Contract 2014
Other Service
Figure 15. Allocation of Islamic financing tools at Al Rajhi Bank.
From Table 4 and Figure 15, the data become clear as follows:
(1) Bank is depending primarily on sales formats.
(2) Murabaha and instalment sales occupied the first place among the funding formulas and reaching an
average of 67.42%.
(3) Murabaha and instalment sales recorded a steady position during the three years and reached their
highest level in 2013, where as much weight to 69.11%.
(4) Al Rajhi Bank has not used any methods of Musharakah during all the years of the study.
(5) That not be considered to participate is the only way that the bank has not been adopting their finance
approach but the study finds other methods which have been neglected by the bank leasing, selling salam.
Study Findings and Evaluation

After studying and understanding the theory and practice of Islamic financing in Islamic banking system,
the study raised the following three questions below:
(1) Do banks misuse the rules and norms of Maqasid Al Shari’ah, and if yes in what ways?
Presently, few Islamic banks are dedicated in taking after Shari’ah Rules and agreeing to Maqasid al
Shari’ah.
In any case, the greater part of Islamic banks is abusing the standards of Maqasid al Shari’ah, by
practically adhering to shallow or poor translation of the all-inclusive statements of Islamic Law, while
“shying-endlessly” from the genuine objectives of Islamic Law and the Socio-Economic Values of Islam that
are exemplified by Social Justice, Fairness, Empathy, Equity, and so forth.
These banks are rolling out improvements in the general comprehension of Islamic rules under the
“standard” of modernisation that keeps Shari’ah “adaptable” and utilizable in each time and put. Their
“invented” rationale here is that: Islamic banking could increment hazard because of such elements as the
many-sided quality of Islamic credit contracts, restricted default punishments and good peril motivating forces
brought about by PSLB (profit sharing and lose bearing) contracts.
The Buy-Back Arrangements, for instance, are broadly utilized as a part of all divisions of the economy
including managing an account fund. Being that as it may, there are not kidding reservations among scholars
with respect to the legitimacy of purchase back courses of action. “Such plans may be a minor subterfuge to go

around the denial of Reba”. Purchasing and offering in the meantime are just another strategy for loaning on
hobby. Moreover, offering something which one does not have is abusing another Islamic standard.
Islamic banks are gradually abandoning the ethical norms of Islamic finance. The basic principles of
Islamic ethical norms elucidate that:
y Islamic finance supports adjusted exchanges: Lenders must impart benefits or misfortunes to borrowers.
y Islamic finance rejects “creating” cash from cash, on the grounds that the part of cash in Islam is “worth
characterizing” and a medium for trade.
y Islamic finance disallows the expansion of credits for securing or putting resources into illegal merchandise,
(for example, pork and alcoholic) or serves (for example, betting, usury, and extortion).
y Islamic finance rejects contracting under high hypothesis (Gharar), as this prompts misusing or imperilling
“the powerless”.
y Islamic finance rejects the deal and the buying obligations of any business sector with pre-determined
profit and loss sharing, it will be regarded Riba, which is restricted in Islam for the reasons of exploitation and
human felicity.
(2) Who is responsible for the misuse of the rules and norms of Maqasid Al Shari’ah?
Directly responsible for the abuse of the guidelines and standards of Maqasid Al Shari’ah is stated below:
The Senior Management of Islamic Banks, due to either: (1) Academic impatience for implementing a
“brisk fix”, an “Answer”, for the “issues” thwarting the development of the moderately are much “more
youthful” Islamic Banking in the opposition with the more experienced traditional banking that controls the
worldwide money related markets. This accompanies a “satisfactory” penance of “a few snags” (Maqasid Al
Shari’ah); and/or (2) professional ambition for accomplishment of “eminence” and notoriety for accomplishing
high benefits, by any methods; and/or (3) personal ambitions for fulfilment of “record” results that “entice”
contributors and customer base, this manner brings about the extension of the base of customers of the bank,
and along these lines securing them advancements and rewards.
The members of the Sharia Supervisory Boards, whose capacity is to go about as review and oversight for
guaranteeing bank consistence with Shari’ah Law and its dedication is to apply Maqasid Al Shari’ah. These
tend to side bank administration and acknowledge and “advertise” the “obscured” and contorted sentiment and
vision of the administration about the Islamic Law, and “be permissive” in the support of these perspectives
which progressively forsake the quintessence of Maqasid Al Shari’ah. Individuals from these boards take after
their own advantage, really being “remunerated” by the bank to assume a submission part for the reluctant open
and potential clients, and for embracing routes for “danger evasion”.
Indirectly responsible for the abuse of the principles and standards of Maqasid Al Shari’ah is the bank
customers, who intentionally incline toward “Islamic-ally un-legitimate” benefits and profits to their religious
responsibility and immaculateness of inner voice.
Why Islamic Banks Focusing on Murabaha in Their Financial Resources?

Clearly illustrated by the previous study that Islamic banks go to sales formats, led by Murabaha in the
recruitment of financial resources and at the expense of Musharakah formats and this tendency is because of
several important reasons as bellow:
(1) Lack of risk in Murabaha transaction because of taking guarantees that client well paid, in contrast
with the other finance methods specially if there weren’t any previous deals.

(2) Easy processing in Murabaha contract, where the employees of the bank do not spend any efforts in
studying or following or having responsibilities with the owner like Musharakah.
(3) Financing or resources available to the bank in the Islamic mostly come from short- or medium-term
and that are capable with methods of Murabaha, also sale includes fixed return that agreed and signed in
Murabaha contract between the bank and the customer.
(4) Employee of commercial bank faces same procedure like what they work on in credit department.
(5) Customers who have dealt for so with conventional banks on the funding formula have benefit when
turn them to deal with Islamic banks that this formula is appropriate especially with regard to non-interference
by the bank in their business after receiving financing and in order to preserve their secrets to their desires and
this is what is not available in Musharakah.
(6) Murabaha does not require the implementation of the bank, but the existence of a specialized expertise
is required and in Murabaha process, the banks do not need to keep or store the purchases item, so the cost is
less.
(7) Lack of employee experience and expertise in the Islamic banking methods and investment and
other formats make them vary of risk taking, especially if the bank has some successful experiences of other
banks.
Recommendations
In light of the results obtained previously, it is clear that this group of banks is almost similar in terms of
the degree of dependence on financing methods to apply their resources where noted that the adoption of the
majority of these banks in its funding formulas on sales, particularly to Murabaha is the main reason for the gap
between theory and practice which result to have negative impact on economic conditions, so the experts and
specialist should work on to achieve the following objectives:
(1) Activate the Islamic financial methods based on participation in the profit and loss of funding tools by
the following:
y Careful selection of clients with new financial records, and who deal in accordance with the financial rules
and norms of customary accounting and adhere issued by standards, so they have to have special department to
deal with this issue.
y Restrict Mudarabah with conditions and restrictions that fit the ownership in all aspects of investment
activity because the contract is the foundation upon disclaimer and the speculative or worker should be adhered
to it and not violate it.
y Watching the stages or process before and after the work is done well leads to minimizing of losses or not
to complete and achieve the desired profit.
(2) Do not rely much on Murabaha, to avoid the following negative effects:
y Reduces the ability of Islamic banks to finance large economic projects that require long-term funding that
Murabaha is considered as a short-term approach in general.
y Murabaha sale contributes in the production of behavioural models that are unacceptable in Islam such as
bias to quick profit; avoid the risk, the desire to increase profit margins and lack of attention to the other party
in community.
y Attention to goods imported and ignoring of domestic goods affect the productivity of these countries.

Conclusion
This paper studied the framework and components of Islamic economics, finance and banking, and the
financing techniques utilised by Islamic financial institutions.
Twenty five years ago, the “young” Islamic finance had been at cross-roads. Then, in a haste being fuelled
by the competition for profit and extensive revenues, it gradually started to move into ethically compromised
practices. Thus, the operations of Islamic institutions and their modes of financing have expanded considerably,
while individuals have been deprived from “tasting” the fruits of this enormous growth.
Currently, however, its distinctive feature of Islamic finance is the growing controversy between its
original theory and current practice.
During these last 25 years, Islamic finance has grown and developed in such a way that it converged
towards conventional banking methods, thus becoming, itself, a presenter and producer of hybrid financial
products of the “interest-bearing” international financial system.
So, the “Grand” operations of the massive international financial markets—those which prioritise
economic incentives rather than ethical, religious, and behavioural norms—have “tempted” Islamic finance
institutions to become part of the “usurious” international financial system.
Also, it addressed the diagnosis and analysis of the reality of the Islamic bank financing in the practical
application and this is in order to identify the extent of deviation of the Islamic bank from the theoretical frame
and gets to know the extent of the need for these banks to reconsider their own way, so the study result to some
of the findings and recommendations does not mean to ignore Murabaha but do not rely much on it while they
apply it with right contract in terms of legitimacy and without fraud or intentional misuse.
The banks have rights to sell what God has permitted and humans do not deprive it, but if Islamic banks
are able to distribute their investments by species, possibly such as Mudarabah, Musharakah, and al-slam,
leasing with giving preference relative to formats of Musharakah, it will be a best practise between the banks
and their clients.
Therefore, it has been the divergence among the assumptions, normative principles and aspirations of
Islamic economics as a system and Islamic finance is an instrument of that system.
According to the study, several financing techniques such as Murabaha, Buy-Back transactions, deferred
sale operations, etc. need to be carefully and thoroughly reviewed from the point of view of the Shari’ah Law
and with a backdrop of Maqasid Al Shari’ah.
The study recommends the following steps to stem the gap in Islamic finance:
(1) Establishing an Islamic central bank to monitor and control the Islamic financing methods and match
them with Islamic law.
(2) Shifting toward equity financing methods is gradually with a 5% average annual increase.
References
Archer, S., & Abdel Karim, R. A. (2007). Islamic finance: The regulatory challenge. John Wiley & Sons (Asia) Pte Ltd.
Ausaf Ahmad. (1993). Contemporary practices of Islamic financing techniques. Study Paper No. 20, Published by Islamic Study
and Training Institute, Islamic Development Bank.
Choudhry, N. N., & Mirakhor, A. (1997). Indirect instruments of monetary control in an Islamic financial system. Islamic
Economic Studies, 4(2).
Hassan, K., & Lewis, M. K. (2007). Handbook of Islamic banking. Edward Elgar Publishing Limited.
Hussein, A. (2012). Islamic finance risk-sharing and international financial stability. Yale Journal of International Affairs.

Kahf Monzer. (2003). Islamic economics, notes on definition and methodology. Review of Islamic Economics, 13, 23-47.
Kahf Monzer. (2005). The success factors of Islamic banks: Islamic Study and Training Institute. Islamic Development Bank,
Jeddah, KSA.
Manawar Iqbal. (2007). A comparing study between Islamic and conventional banks in the nineties Islamic Study and Training
Institute. Islamic Development Bank, Jeddah, KSA.
Nasser Al Ghareeb. (2010). Islamic banking assets and operating issues, Islamic Study and Training Institute. Islamic
Development Bank, Jeddah, KSA
Shaker, F. (2010). Islamic banking versus commercial banking: prospects & opportunities, a presentation. FIRST EAST INVEST,
Cairo, Egypt. (Dr. Fouad Shaker is a Senior Advisor & Partner: First East Invest; and was the Former Secretary General:
Union of Arab Banks).
The Application of Maqasidal-Shariah in Islamic Finance. (n.d.).
http://www.maybank2u.com.my/iwov-resources/islamic-my/document/my/en/islamic/scoe/knowledge-centre/articles/Applic
ation_of_Maqasid_al-Shariah.pdf
The Holy Qur’aan, Al-Baqarah, 2:275.
The Holy Qur’an, Al-Baqarah, 2:278.
The Holy Qur’an, Al-Imran, 3:130. (O you who believe! do not devour usury, making it double and redouble, and be careful of
(your duty to) Allah, that you may be successful.)
Totaro, L. (2009). Vatican says Islamic finance may help western Banks in Crisis.

doi: 10.17265/1537-1506/2016.07.004
D DAVID PUBLISHING
The Silk Road Imaginary in the Central Asia as an Emerging

Geopolitical Discourse
Cavit Emre Aytekin, Elnur Hasan Mikail

Kafkas University, Kars, Turkey
This paper examines the use of geopolitical imaginaries, historical narratives, and discourses in Central Asian
politics which have always been used in geopolitical agendas of both regional and external actors. The main focus
in this study is the Silk Road myth as a prominent case of those geopolitical imaginaries. The Silk Road discourse
presents a definite example of mythmaking and geopolitical discourse in the Central Asia used by both regional
actors such as China, Russia and external actors such as the United States. The main argument of this study is that
each of those actors is referring the historical myth of Silk Road as a useful tool for pursuing their geopolitical
vision and interests. So questioning this situation is important in the eyes of critical geopolitics because the same
historical fact is constructed with different meanings and visions by different actors in accordance with their
competing interests. In this study, the critical geopolitical theory and method are used to describe the emerging
geopolitical discourse in the Central Asia such as: rising powers narrative, peaceful rise concept, and silk road
imaginary.
Keywords: the Silk Road, geopolitical discourse, critical geopolitics
Critical Geopolitics
As international relations discipline is progressing through theoretical debates, the traditional concepts,
thoughts, and ideas are being challenged by new approaches. The critical turn in international relations is a
product of such a debate process and the critical theory, in general, it brought new conceptual isations of
ontological and epistemological understandings. Those ontological and epistemological arguments brought by
the critical theory are as a matter of course encountered in geopolitics. And as in the other realms of the
international relations discipline, the study of geopolitics started to face the critique of positivism as the critical
theory reached to the theoretical background of classical geopolitics with its contemporarysocial and political
interpretations.
In geopolitics, positivism is incapable for explaining the relationship among places, spaces, and politics in
international level (Dalby, 1991, p. 269). Especially, it’s fundamentally a priori assumption of distinction
between geography as a material external world out there, and the states as main political actors have an
insufficient understanding of critical concepts such as practice, subject, object, and the role of discourse. So the
Cavit Emre Aytekin, res. asst., Department of Political Sciences and International Relations, Faculty of Economics and
Administrative Sciences, Kafkas University, Kars, Turkey.
Elnur Hasan Mikail, ass. prof., Department of Political Sciences and International Relations, Faculty of Economics and
Administrative Sciences, Kafkas University, Kars, Turkey.
Correspondence concerning this article should be addressed to Elnur Hasan Mikail, Department of Political Sciences and
International Relations, Faculty of Economics and Administrative Sciences, Kafkas University, Kars, Turkey.

CENTRAL ASIA AS AN EMERGING GEOPOLITICAL DISCOURSE 357
so called importance of some places and the concretizing of international politics through drawing attention to
borders and maps neglect their historical constructed nature. The methodological and theoretical considerations
have frequently been given short shrift in international relations debates. The assumption built into the
enterprise is of the difference between political community which exists within states and the absence of such a
community in the international arena. Critical theory opens up the investigation to explore the possibilities for
change and the structural linkages between the materials which are focused on its larger context.
As stated above parallel to the debates in international relations theory, the political geography has been
entered into meta-theoretical discussions. And discursive practices of international relations became a major
subject of political geography. Geography’s traditional role is changed and along with the critical theory
approach, traditional concepts such as power, interest, war, peace, violence, war, and the international system
came into question (Painter, 2008, p. 61). Thus, critical geopolitics became trending approach in analyzing
geopolitical models, imaginaries, and discourses such as the Silk Road narrative.
The critical geopolitics focuses on the writing of worlds or the constructions of geographies according to
Gearoid Tuathail, a major critical geopolitician (Tuathail, 1992, p. 191). This is the effect of post structuralist
approach in the political geography and in fact the methods and ideas of critical geopolitics mostly originated
from the Foucault’s ideas on the power knowledge connection and the constructive importance of discourse
(Dodds, Kuus, & Sharp, 2013, p. 8). So in the view of critical geopolitics, the political geography is discursive.
The essential stages of constructing a geopolitical discourse are naming of territories, appealing to history,
historical narratives, and mythos and consequently constituting a geopolitical imaginery of places. Here, the
construction process begins with the division of places into “our” area and “their” area; its political function is
being to incorporate and regulate “us” or “the same” by distinguishing “us” from “them”, the same from “the
other” (Dalby, 1988).
Critical geopolitics explores geopolitical perceptions of the Silk Road narrative through considering its
relationship with the discourses, practices, and identities of relevant political actors. Analyzing the Silk Road
from critical geopolitics perspective will uncover a concrete example of constructing a geopolitical narrative
and provide possibility to determine to what extent historical narratives can be exploited in a process of
artificially charging a geographical space.
Critical geopolitics considers geopolitics as a discourse of worldview perceptions and political culture, as
opposite to the classical understanding of objective knowledge (Tuathail, Routledge, & Dalby, 2006, p. 11).
Therefore, the Silk Road can be interpreted as a geopolitical imaginary of regional and external actors. Because
along with Russia and the US, China has also entered the realm of Silk Road mythmaking since the early 1990s,
and India’s foreign policy narratives contain mythological features as well.
The Usage of Silk Road Myth as a Geopolitical Construct

There are different visions of the Silk Road showing competing imaginations and interests of different
actors who use geopolitical discourses to pursue those interests (Fedorenko, 2013). International actors suppose
the revival of the Silk Roads in post-Soviet era as a new geopolitical narrative and referred this discourse as a
useful instrument to promote their own interests in Central Asia. By the use of this notion in foreign policy
discourse, different actors charged its meaning with different specific characteristics (Fedorenko, 2013). In this
part, an overview for the usages of Silk Road myth in different actors’ geopolitical discourse is presented. In
doing so, the main aim is to discover the instrumentalization of a geographical concept in accordance with the

358 CENTRAL ASIA AS AN EMERGING GEOPOLITICAL DISCOURSE
interests of great powers.

The Silk Road metaphor has been used in a variety of discourses of different actors such as Japan, China,
Russia, India, and the US. For instance, Japan, emphasized the “Silk Road diplomacy” in 1990s and in 2002
had initiated the “Silk Road Energy Mission” for the purpose of engaging in the energy market, in addition to
its “Central Asia plus Japan” initiative (Len, Tomohiko, & Tetsuya, 2008, p. 7). South Korea also used the Silk
Road myth as a historical and cultural argument which is used to strengthen economic relations with Central
Asia (Evans, 2012, p. 74). India as another regional actor has number of times appealed the concept of Silk
Road in its claims of cultural and identitical relations with the region.
China has the biggest share in using the Silk Road metaphor especially in recent years. Chinese direct
investment in Central Asia has increased and as China is getting more involved in Central Asian politics,
economics through direct investments in infrastructure of transport, communication, and energy market, its
usage, and possessing of the Silk Road narrative become more appeared.
China has used the Silk Road metaphor since the early 1990s but Beijing made it an official policy only in
September 2013 in convention of Chinese President Xi Jinping. China started to officially use the Silk Road
metaphor through introducing its “Silk Road Economic Belt” project in 2013 (Laruelle, 2015, p. 362).
The Silk Road Economic Belt project corresponds a geographical axis in Central Asia from China towards
European continent passing through Kazakhstan, Afghanistan and going west through Iran and Turkey to
achieve the Mediterranean and Europe. Chinese president Xi Jinping officially introduced the project in 2013
and reported that China would contribute $40 billion to set up the Silk Road Fund (WSJ, 2014). China referred
ancient Chinese Silk Road to justify its interests in this project and denominated it as “Twenty-First Century
Maritime Silk Road”, which associates China with the Southeast Asian nations, Africa, and Europe through the
Indian Ocean (Len, 2015).
However, the Silk Road narrative of the US has different meanings from Chinese one. The US Silk Road
strategy focuses on the revival of continental trade instead of the continental strategy based on infrastructure,
railways, and maritime, seen in the meaning of the Silk Road in Chinese usage. As seen from Beijing’s
perspective, the Silk Road offers an opportunity for Chinese direct involvement in the Central Asia, and
particularly contributed by Chinese writing of history and naming of places.
As stated, there are many Silk Road allegories of different actors in the Central Asia. Russia has another
narrative of Silk Road. The use of the term in Russia was mostly likened with the metaphor of Eurasia (Laruelle,
2015, p. 361). Russia is another actor that operationalizes a geographical narrative to justify its involvement in
the region. With its Eurasian terminology, Russia tries to project Central Asia as part of its influence sphere as
Chine does in the Silk Road myth. Thus, Russia tries to disconnect Central Asia from other actors in the region
through constructing the narrative of Eurasia.
The US is another representative of Silk Road narrative as a new geopolitical narrative after the collapse
of Soviet Union. In the US, usage of Silk Road metaphor appears as a symbol of this geopolitical construct of
Transport Corridor Europe-Caucasus-Asia (TRACECA) project which was introduced in 1993 (Laruelle, 2015,
p. 364). It aimed to open up Central Asia and the South Caucasus through the creation of a vast transport and
communications corridor. TRACECA still functions today as a European assistance project, but it did not
impact the main regional trade trends. The United States had its own Silk Road strategy, too, in 1999 and again
in 2006, the Congress tried—without success—to target US assistance to the former Eurasian space,
specifically to Central Asia and the South Caucasus.

CENTRAL ASIA AS AN EMERGING GEOPOLITICAL DISCOURSE 359
This first US Silk Road conceptualization had geopolitical targets, the most prominent benefit of realizing
such a geopolitical construct would be to decline the dependency of Post-Soviet Central Asian Republics on Russia.
Since 2011, the Silk Road metaphor has started to be used in US foreign policy to frame US strategy for
Central Asia. The choice of the Silk Road narrative to give a certain depth to a relatively unstructured US
policy toward Central Asia encapsulates the evolution of US strategic thinking since the collapse of the Soviet
Union. The US Silk Road initiative has thus been developed around four goals (Biswal, 2015):
(1) Building a regional energy market.
(2) Facilitating trade and transport.
(3) Improving customs and border procedures.
(4) Linking businesses and people.
The US Silk Road strategy claims to offer a comprehensive vision towards Central Asia. Thus, this
strategy conveys a background but a forward-looking idea, and interest in Asia-Pacific region. In this point, the
competitiveness of different visions towards the same region and referring the same historical myth of Silk
Road, the roles of Russia, China, Iran, and Europe have different articulations and linkages on Central Asia.
Actually, the US project with the ones advanced by other external actors—obscures the strategic motivations
behind the reorganization of economic dependencies in this part of the world.
The usage of Silk Road metaphor as a geopolitical imaginary is based on the idea that Central Asia
constitutes a center for Asia-Europe commerce and can be constructed as a natural transit route for the 21st
century goes against any statistical analysis or world trade. Today, three-quarters of the world’s trade is carried
out by sea, and continental trade is not likely to dethrone maritime trade just because, once upon a time,
caravans traveled along these routes. Uzbekistan is and will remain one of only two countries in the world that
are doubly landlocked. The US Silk Road approach emphasizes what appears to be the center of a map of
Eurasia—not a network of contemporary trade flows.
As seen, the symbolic power of Silk Road analogy is useful. The disappearance of the Silk Roads was due
to internal evolutions in the region as well as a changing global structure. It preceded imperialism and can by
no means be explained solely by the “Great Game” between Russia and Great Britain in the 19th century. The
old Silk Road discourse conveys transportation of goods and more importantly the ideas, cultures, and
technology. It corresponds with an ideal of constructing great civilizations and fosters great innovations.
Central Asia can have a similarly historic impact today. This begs the question as to how the United States, as
the world’s leading super power, can promote the idea that great innovations will come from building roads and
rail ways. Such thinking represents a 19th century’s vision of “progress” and “development”.
The Silk Road metaphor has a confusing characteristic in the usages of different actors and this reality is
less romantic, but it is more in accordance with what the region is today: a periphery of multiple other cultural
and trade centers, and a “center” only in the geographical sense of the term.
Conclusion
As a conclusion, the Silk Road narrative is appealed by different actors as an instrument for their
geopolitical vision towards Central Asia and their political involvement in the region. And this fact generates a
clear case study for referring Critical Geopolitics to analyze a geopolitical discourse. Accordingly, different
usages of the Silk Road myth for justifying different and competing strategies and ideologies are uncovered.
The US Silk Road tends, for instance, to conflate the Silk Road with the Heartland theory of Halford

360 CENTRAL ASIA AS AN EMERGING GEOPOLITICAL DISCOURSE
Mackinder. As a general argument of the critical geopolitics about the US geopolitical discourse throughout the
cold war era, the notion of Heartland is used in US geopolitical theories. Similarly, today’s Silk Road narrative
appears to pursue this geopoliticized vision of a region critical to the destiny of the West and the leading great
power status of the United States, with “connectivity” and trade routes replacing traditional power competition.
As a historical metaphor, the Silk Road provides a kind of meta-narrative for political involvement of
regional and external actors such as China, Russia, Japan, India, and the US in the region similar to the Great
Game discourse of 19th century. Thus, the metaphor underlines the rivalry of different actors in Central Asia on
increasing their power and influence in the region.
The different usages of the Silk Road in the political discourse of Russia, China, and the US strengthen the
assumptions of critical geopolitics.
Bibliography
Biswal, N. D. (2015). The New Silk Road Post-2014: Challenges and opportunities. Presentation at The Woodrow Wilson
International Center for Scholars, Washington, D.C.
Dalby, S. (1988). Geopolitical discourse: The Soviet Union as other. Alternatives, 13, 415-442.
Dalby, S. (1991). Critical geopolitics: Discourse, difference, and dissent. Society and Space, 9, 261-283
Dodds, K., Kuus, M., & Sharp, J. P. (2013). The Ashgate research companion to critical geopolitics. Farnham, Surrey, England:
Ashgate.
Evans, A. (2012). South Korea’s “New Silk Road” to Central Asia: Diplomacy and business in the context of energy security. In
SAIS US Korea 2012 Yearbook. US-Korea Institute at SAIS: John Hopkins University.
Fedorenko, V. (2013). The New Silk Road initiatives in Central Asia. Rethink Institute: Washington, D.C.
Laruelle, M. (2015). The US Silk Road: Geopolitical imaginary or the repackaging of strategic interests? Eurasian Geography
and Economics, 56(4), 360-375.
Len, C. (2015). China’s 21st century maritime Silk Road initiative, energy security and SLOC access. Maritime Affairs: Journal
of the National Maritime Foundation of India.
Len, C., Tomohiko, U., & Tetsuya, H. (2008). Japan’s Silk Road diplomacy: Paving the road ahead. Washington, D.C.: Central
Asia-Caucasus Institute.
Painter, J. (2008). The SAGE handbook of political geography. Los Angeles i.e. Thousand Oaks, CA: SAGE Publications.
Tuathail, G. (1992). Geopolitics and discourse practical geopolitical reasoning in American foreign policy. Political Geography,
11(2), 190-204.
Tuathail, G., Routledge, P., & Dalby, S. (2006). The geopolitics reader. New York: Routledge.
WSJ. (2014). China to contribute $40 billion to Silk Road Fund (2014, November 8). Wall Street Journal. Retrieved from
http://www.wsj.com/articles/china-to-contribute-40-billion-to-silk-road-fund-1415454995

Chinese Business Review ISSN 1537-1506 Vol.15 No.7 2016-With-cover-page-V2

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chinese Business Review ISSN 1537-1506 Vol.15 No.7 2016-With-cover-page-V2

Uploaded by

Copyright:

Available Formats

Accelerat ing t he world's research.

Chinese Business Review (ISSN 1537-

Related papers Download a PDF Pack of t he best relat ed papers 

T HE APPLICAT IONS OF ISLAMIC BANKING IN T HE LIGHT OF MAQASID AL SHARIA’H

David Publishing Company

Editorial Board Members:

David Publishing Company

Mihail Dimitriu, Otilia Manta

Civic Engagement in Services Design and Provisioning: A Case of We-government 326

Islamic Finance in Theory and Practice 334

Muhamad Abdul Aziz Muhamad Saleh Jumaa

Cavit Emre Aytekin, Elnur Hasan Mikail

Family Farms—A New Challenge in the Current World Context

Mihail Dimitriu, Otilia Manta

Keywords: inclusion, microfinance, economic models, family farms abstract

Materials and Methods

Results and Discussions

y Price volatility (energy, food, etc.) and limited access to markets.

Data Collection and Analysis

Formulation and Analysis of Alternative Support and Enterprise Models

The Evolution of Indicators Status

If so, then the following questions arise:

Civic Engagement in Services Design and Provisioning:

Keywords: civic engagement, social media, co-production, e-government, we-government, FixMyStreet

Civic Engagement: An Overview

Social Media Influence on Civic Engagement and Co-production Processes

We-government: The Roots of an Emerging Paradigm

Source: adapted from Hoffman and Fodor (2010).

Islamic Finance in Theory and Practice

Muhamad Abdul Aziz Muhamad Saleh Jumaa

A Theoretical Method of Islamic Banking Financing

Figure 1. Establishment of Islamic banks and institutions: a brief historical perspective.

Basis, Objectives, and Principles of Islamic Economics as a System

include around 360 financial establishments in more than 50 nations.

Figure 2. Islamic finance assets by domicile.

Figure 3. Global Islamic finance assets.

Figure 4. Global Islamic finance assets (2009-2014E).

Figure 5. Global Islamic fund assets trend.

Islamic Finance Methods

Figure 8. Mechanizm of (baie al salam) in Islamic banks.

Figure 9. Thee mechanizm off Ijarah.

Figgure 10. Quran verse

Figure 11. Quraan verse to explaain Ijarah.

Outline of the Basics of Islamic Finance

Analysis of Islamic Financing Methods by Islamic Banks

Murabahah & sell in account

Figure 12. Allocation of Islamic financing tools at Malaysian Bank.

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00

Figure 13. Allocation of Islamic financing tools at Qatar Islamic Bank.

From Table 2 and Figure 13, the explanations are as follows:

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00

sell in account 2012

Figure 14. Allocation of Islamic financing tools at Jordan Islamic Bank.

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00

Murabahah & Installment 2012

Figure 15. Allocation of Islamic financing tools at Al Rajhi Bank.

Study Findings and Evaluation

Why Islamic Banks Focusing on Murabaha in Their Financial Resources?

The Silk Road Imaginary in the Central Asia as an Emerging

Cavit Emre Aytekin, Elnur Hasan Mikail

Keywords: the Silk Road, geopolitical discourse, critical geopolitics

The Usage of Silk Road Myth as a Geopolitical Construct

interests of great powers.

You might also like