ECONOMIC SYSTEM OF ISLAM

What is meant by economy?

The word economy is taken from the two Greek words
“Oikos” and “Nomos” which means “household
management”.
Production and consumption of goods and services and the
supply of money by a region or country is called economy.
Or
Careful management of available resources is the economy.
TYPES OF ECONOMY
• CAPITALISM
• COMMUNISM
• SHARIA-BASED ECONOMY
FEATURES OF ISLAMIC ECONOMY
• Allah is the Creator and Sustainer of everything and man as the
trustee of Allah
• Prohibition of unlawful activities
• Spending in the way of Allah
• Hoarding of money is prohibited
ALLAH AS THE OWNER OF EVERYTHING AND MAN
AS THE TRUSTEE OF VICEGERENT OF ALLAH

Believe in Allah and His Messenger (Muhammad SAW), and spend of

that whereof He has made you trustees. And such of you as believe
and spend (in Allah’s Way), theirs will be a great reward. (57:7)
PROHIBITION OF RIBA
The word Riba means an addition to or an increase over and above
the original amount/money, that is unlawful addition.
Interest is the the amount paid for the the amount lent.
Usury is the act or practice of lending money at interest especially at
very high level. (Exorbitant interest)
Both the terms interest and usury cover the term Riba which is
prohibited in Islam. Money which is increased at interest whether it is
at low rate or high rate is haram.
O you who believe! Be afraid of Allah and give up what remains (due
to you) from Riba (from now onward), if you are (really) believers.
(2:278)

And if you do not do it, then take a notice of war from Allah and His
Messenger but if you repent, you shall have your capital sums. Deal
not unjustly (by asking more than your capital sums), and you shall
not be dealt with unjustly (by receiving less than your capital sums).
(2:279)
 BRIBERY

And eat up not one another’s property unjustly (in any illegal way e.g.
stealing, robbing, deceiving, etc.), nor give bribery to the rulers
(judges before presenting your cases) that you may knowingly eat up
a part of the property of others sinfully. (2:188)
 STEALING AND ROBBING

Cut off (from the wrist joint) the (right) hand of the thief, male or
female, as a recompense for that which they committed, a
punishment by way of example from Allah. And Allah is All-Powerful,
All-Wise. (5:38)
INTOXICANTS, GAMBLING, IDOLS AND
FORTUNE-TELLING

O you who believe! Al Khamr (intoxicants - all kinds of alcoholic

drinks), Al Maesir (gambling), Al-Ansab (sacrificing to stone alters to
other than Allah), and Al-Azlam (arrows for seeking luck or decision)
are an abomination of Shaitan’s (Satan) handiwork. So avoid (strictly
all) that (abomination) in order that you may be successful. (5:90)
 PROSTITUTION

And force not your maids to prostitution, if they desire chastity, in

order that you may make a gain in the (perishable) goods of this
worldly life. But if anyone compels them (to prostitution), then after
such compulsion, Allah is Oft-Forgiving, Most Merciful (to those
women, i.e. He will forgive them because they have been forced to do
this evil action unwillingly). (24:33)
 EATING ORPHANS’ PROPERTY

And give unto orphans their property and do not exchange (your) bad
things for (their) good ones; and devour not their substance (by
adding it) to your substance. Surely, this is a great sin. (4:2)
HOW TO SPEND WEALTH?
• The likeness of those who spend their wealth in the Way of Allah, is
as the likeness of a grain (of corn); it grows seven ears, and each ear
has a hundred grains. Allah gives manifold increase to whom He
pleases. And Allah is All-Sufficient for His creatures’ needs, All-
Knower. (2:261)
• If you disclose your Sadaqat (alms-giving), it is well, but if you
conceal it, and give it to the poor, that is better for you. (Allah) will
forgive you some of your sins. And Allah is Well-Acquainted with
what you do. (2:271)
• Truly those who believe, and do deeds of righteousness, and
perform As-Salat (Iqamat-as-Salat), and give Zakat, they will have
their reward with their Lord. On them shall be no fear, nor shall they
grieve. (2:277)
• Worship Allah and join none with Him in worship, and do good to
parents, kinsfolk, orphans, Al-Masakin (the poor), the neighbour
who is near of kin, the neighbour who is a stranger, the companion
by your side, the wayfarer (you meet), and those (slaves) whom
your right hands possess. Verily, Allah does not like such as are
proud and boastful. (4:36)
As-Sadaqat (Charity) are only for the Fuqara (poor) and Al-Masakin
(the poor) and Al-Amileen (those employed to collect the funds) and
for to attract the hearts of those who have been inclined (towards
Islam); and to free the captives and Al-Gharimeen (for those in debt)
and in the way of Allah and for the wayfarer; a duty imposed by
Allah. And Allah is All-Knower, All-Wise. (9:60)
 HOARDING OF WEALTH
O you who believe! Verily, there are many of the scholars and the
monks who devour the wealth of mankind in falsehood, and hinder
(them) from the way of Allah. And those who hoard up gold and
silver, and spend it not in the Way of Allah, announce unto them a
painful torment. (9:34)
On the Day when that it will be heated in the Fire of Hell and with it
will be branded their foreheads, their flanks, and their backs, (and it
will be said unto them):-”This is the treasure which you hoarded for
yourselves. Now taste of what you used to hoard.” (9:35)
BALANCE OF SOCIETY
What Allah gave as booty (Fai’) to His Messenger (Muhammad SAW)
from the people of the townships, - it is for Allah, His Messenger
(Muhammad SAW), the kindred (of Messenger Muhammad SAW), the
orphans, Al-Masakin (the poor), and the wayfarer, in order that it may
not become a fortune used by the rich among you. And whatsoever
the Messenger (Muhammad SAW) gives you, take it, and whatsoever
he forbids you, abstain (from it), and fear Allah. Verily, Allah is Severe
in punishment. (59:7)