Islamic Economy Issue to be discussed The state of economy after 60 years The role of the government
Governments proactive Fiscal Policy
Eradication of Zulm Concept of Taxation in Islam Bait-ul-Maal – Subsidy Powerhouse Inflation control Pro-employment policies Pro-development policies Monetary policies Important Hadith (Bukhari-vol3,book 43 Hadith # 655) Narrated Abu Huraira ®: The Prophet (s) said, "When an adulterer commits illegal sexual intercourse, then he is not a believer at the time, he is doing it, and when a drinker of an alcoholic liquor drinks it, then he is not a believer at the time of drinking it, and when a thief steals, then he is not a believer at the time of stealing, and when a robber robs, and the people look at him, then he is not a believer at the time of doing robbery. The state of economy after 60 years –Islamic Republic of Pakistan The state of economy after 60 years –Islamic Republic of Pakistan The state of economy after 60 years –Islamic Republic of Pakistan The state of economy after 60 years –Islamic Republic of Pakistan The state of economy after 60 years –Islamic Republic of Pakistan The state of economy after 60 years –Islamic Republic of Pakistan The state of people after 60 years Progress primarily because of the technological era in which we live! What the Qur’an DECLARES (4:59): Ayah Verily! Allah commands that you must render back the trusts to those, ignored to whom they are due; for and that when you judge between men, centuries! you judge with justice.
Verily, how excellent is the teaching which He (Allah)
gives you! Truly, Allah is Ever All-Hearer,
Establishment of Justice – FARD!
Government’s Role To provide & facilitate in the people’s interest, as ordered by ALLAH
Build economic environment
Provide ALL kinds of safety
Implement Shariah with enforcement !
Seek the Help & Guidance of ALLAAH
Responsibility must be answered for!
Common Government Satanic Practices All injustices in the name of ISLAM
Intention: to please other than ALLAH
Excessive taxes & inefficiencies
Excessive luxuries/protocols MUST lead
Blatant ignorance with best example ! Leaders right to always rule = BEST Decision
Criticism intolerable = Punishable !
Good Governance Example Saheeh Muslim (Book 20, Number 4494):
Abd al-Rahman bin Shumasa who said: I came to A'isha
to inquire something from her. She said: From which people are you?
I said: I am from the people of Egypt.
She said: What was the behaviour of your governor
towards you in this war of yours?
I said: We did not experience anything bad from him.
Good Governance Example (contd) If the camel of a man from us died, he would bestow on him a camel. If any one of us lost his slave, he would give him a slave. If anybody was in need of the basic necessities of life, he would provide them with provisions. She said: Behold! the treatment that was meted out to my brother, Muhammad bin Abu Bakr, does not prevent me from telling you what I heard from the Messenger of Allah (may peace be upon him).
He said in this house of mine: O God, who (happens to) acquire
some kind of control over the affairs of my people and is hard upon them-be You hard upon him, and who (happens to) acquire some kind of control over the affairs of my people and is kind to them-be You kind to him. Pro-active Governance 20% direct influence on economy (C+I+G+[X-M])
Maximize GDP Compare
Pro-competition Pakistan & Japan Anti-Monopoly
Enhancing productivity & efficiency
What should the tax rate be ?
Erradication of Zulm - Injustice Eradication of all un-islamic practices & injustices
Lawful dealings only (ban all Satanic trades)
Avoidance of Gharar (uncertainties)
Eliminating hoarding, shortage, monopolies
Cheating & fraud – totally unacceptable
Taxation in ISLAM 100% taxation ? Zakat is not tax 0% taxation ?
What should the tax rate be ?
What should tax revenue be used on ?
The more the tax, the more the inefficiencies,
corruption, luxuries & protocols Bait-ul-Maal – Subsidy Power House Subsidy is an integral component
Strategic use of subsidies
Subsidy on core consumer items
Effect of subsidy on technology
Receivers of Zakat Poor Needy Travelers To reconcile hearts towards islam (Da’wah) To spread Islam (Jihad) Collectors of Zakat Freeing slaves Debtors Sadaqah-Charity A religious obligation changing humanities attitude towards the “have-nots”
The concept of saving = Sharing ?
The concept of wealth multiplication
Private sector Sadaqah-e-jariah
How can a tax-free, subsidy-based economy survive ? By efficient management of natural resources (oil, gas, chromite, marble, precious stones, etc)
Ifno natural resources, must be creative &
innovative (Coke/Pakola, medicine, handicraft, hand made wonders, etc)
Example: Middle Eastern countries, North
Korea Pro-employment & Pro-investment Problem of unemployment, over-employment, & national inefficiency
Converting population into skilled-labour
Nurturing & retaining human capital
Investment in infrastructure -> Nation building
Real investment in evolving military assets
Monetary policy – ANTI-inflation
Biggest note ? Interest rate ? Restrict money supply Investment in real industry
DEFLATION ??
Which is more powerful Fiscal or
Monetary? How did U$ get out of the Great Depression?
Stock market crash Isn’t this situation
Severe drought similar to the High unemployment (30%) current High Inflation Pakistani Social unrest economic Increase in organized crime disaster ? Fear of spreading communism Dwindling economy Capital flight Banking system failed Pro-Active Fiscal Policy Maximizing GDP (Investment, Production, Export), Minimize government spending on luxuries Tax rate ~ ZERO Real use of Bait-ul-Maal (Zakah Fund, Sadaqah Funds, resource harvesting/mining) Subsidization of all core consumer items (wheat, rice, sugar, petrol, gas, electricity, cement, plastic, metal, wood, etc) Education 100% FARD Transforming population into labor force Widely dispersed vocational training institutes, avoid non-sense industries Nurturing & retain human capital Promote permanent residency (only temporary travel) Curb capital flight, pro-investment Strategic employment Pro-competition, anti-monopoly Build infrastructure (roads, electricity, gas, water, education, health, etc) Evolve strategic military assets Strict and strategic use of imports Strict law enforcement & regulations Trade creates surplus Unlike RIBA, trade creates surplus (money) Compare with RIBA example:
Riba-free loan Raw->supply
Sajid 1,000 Fishes Earning profit to pay Navid 1,000 Farms interest-free loan Farid 1,000 Fruit Jam (manufactures) State bank introduces money, value is added to products, individual wealth is earned, money circulation continues. Future of Islamic Economy All other economies have failed!
No economy has performed as stated theoretically
Human made economies have evolved, adapted
and failed
Islamic economy has always succeeded when
applied
Proof of the global spread of Islamic Economy !
Future of Islamic Economy ah has promised those among you who believe, d do righteous good deeds, t He will certainly grant them succession to e present rulers) in the earth, He granted it to those before them, d that He will grant them the authority to practise their religio t which He has chosen for them (i.e. Islam). d He will surely give them in exchange a safe security er their fear (provided) they (believers) rship Me and do not associate anything (in worship) with Me. t whoever disbelieved after this, y are the Fasiqun (rebellious, disobedient to Allah). urah Nour, ayah # 55) Future of Islamic Economy -Allaah bin Masud (r) reported the Prophet (s) as saying:
nly one day of this world remained,
ah would lengthen that day ording to the version of Za'idah), e raised up in it a man who belongs to me or y family whose father's name is the same as my father's, o will fill the earth with equity and justice t has been filled with oppression and tyranny” ording to the version of Fitr). d Ahmed:(1/448) & (1/376/377). Also authenticated by Dr Bastawi in Al-Mahdi Al-Muntadhar, page 239, #21. Isnad are Sahee woud: Kitab Al-Mahdi, volume 3, page 1191, hadeeth # 4269. hi: Authenticated (judged Sahih) in Sahih At-Tirmithee (4/505), hadeeth # 1819. Future of Islamic Economy tar narrates:
have been told that Mahdi will make something that
ar bin Abdul-Aziz did not do.” We asked: “What is it ?”
aid: “A man will come to him and ask him
ive him), then he will say: inside (cashier) and take.’ will go inside and take. n he will go out and see people not hungry (satisfied) n he will become sorry (feel guilty) come back to him and say: ‘Take what you gave me.’
will reject and say: ‘We give and don’t take.’”
tar is a follower of the followers (Tabi Al-Tabiye’en). (99), and Al Waredah fi Al-Fitan (5/1064), # 585. icated by Dr Bastawi in Al-Mahdi Al-Muntadhar, page 226, # 18. Conclusion: Isnad are saheeh. Future of Islamic Economy Muhammad Al-Tijani Al-Samawi:
‘Imam Muhammad ibn Al-Hasan Al-Mahdi,
o will fill the earth with justice and equality t has been filled with injustice and despotism, ind whom Maryam’s son (Jesus will pray, by whom Allaah will perfect His light and the believers will rejoice.
d from Al-Samawi, Dr Muhammad Al-Tijani. Translator Hasan Muhammad Najafi.
hia:The Real Followers of the Sunnah (Ash-Shia Hum Ahlul-Sunnait. Ansariyan Publications, Iran. Page 143. Future of Islamic Economy
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