1.0 INTRODUCTION
Islam always
provided the rules and guideline for the things in our lifestyle. In economic,
Islam has set some standards, based in justice and practicality in order to
establish an economic system. It is true that gathering of money concerns for
every human being. Yet, while these standards recognize money as being among
the most important elements in society, they will not lose the sight to worship
their God. In Islamic economic system do not concerned with the amount of
income, expenditure, imports, and exports. But Islam will be concerned more on
the spirit of economic system.
If the society
had implant Islamic laws and also had promote Islamic manners, we will find
that it brings together all the systems, for example, social, economic, and so
forth. Islam teaches that GOD has created the provision for everyone who HE has
brought to life. So, competition of natural resources is presumed to exist
among the nations of the world is an illusion. Besides that, the relationship
between the individual and his CREATOR, between the person and others person,
between the person and universe, and between the person to himself is a set of
beliefs in Islam. From this, we know that Islam regulates human behaviour, and
economic behaviour is one of the type on human behaviour. This economic behaviours
is dealt by Muslims as a means of production, distribution, and consumption of
goods and services.
2.0 PROBLEM STATEMENT
In Malaysia, which is an
Islamic country, we can see more conventional banking institutions rather than
Islamic banking institutions. We believe that this is due to the fact that
people are not aware of the principles of Islamic banking. Most conventional banking
are only looking for profits rather than mutual growth of the society. This is
the opposite of Islamic economy and we should implement the teachings into our
current situation to help the growth of our country.
3.0 OBJECTIVES
i.
To understand the economy institution in
Islam.
ii.
To spread the knowledge of our findings.
iii.
To apply the principles we learnt in our
daily lives.
4.0
DISCUSSION
We will discuss those who related to
economic institution for Islam.
4.1 Concept of Islamic Economy Institution
The concept of economy in
Islamic teachings are not as clear cut as what we can see in western type
economies. One of the characteristics of Islam is
that it covers every aspects of life, including the livelihood of humans, which
is the economy.
An important section from the Quran sets
the basis for concept of Islamic economy - 5:120 The Qur'an, where it states
that dominion of the cosmos belongs to God (Allah) and therefore we are but His
vice-regents (or trustees) of all this dominion, whether we seemingly own some
part of this individually, jointly or otherwise. Naturally therefore, all
economic and financial activities that would effect and regulate our lives,
must be driven by this key principle.
Besides that, Islamic economy is one
that obeys the laws of Shari'ah, which is clearly stated in the Quran. This is
the biggest difference from conventional economies where laws are man-made.
Islamic economy aims to guarantee
individual liberty, freedom of choice, private property and enterprise, the
profit motive and possibilities of unlimited effort and reward. This is due to
the fact that all humans are merely trustees of God to take care of his
resources on Earth. Therefore, everyone should work hard to earn their keep and
be given the chance to do so.
4.1.1 Islamic banking
Islamic banking refers to a system of
banking or banking activity that is consistent with the principles of the
Shari'ah (Islamic rulings) and its practical application through the development
of Islamic economics. The principles which emphasise moral and ethical values
in all dealings have wide universal appeal. Shari'ah prohibits the payment or
acceptance of interest charges (riba) for the lending and accepting of money,
as well as carrying out trade and other activities that provide goods or
services considered contrary to its principles. While these principles were
used as the basis for a flourishing economy in earlier times, it is only in the
late 20th century that a number of Islamic banks were formed to provide an
alternative basis to Muslims although Islamic banking is not restricted to
Muslims.
In 2014, Shari'ah compliant financial
institutions represented approximately 1% of total world assets. By 2009, there
were over 300 banks and 250 mutual funds around the world complying with
Islamic principles and as of 2014 total assets of around $2 trillion were
sharia-compliant. According to Ernst
& Young, although Islamic Banking still makes up only a fraction of the
banking assets of Muslims, it has been growing faster than banking assets as a
whole, growing at an annual rate of 17.6% between 2009 and 2013.
The origin of the modern Islamic bank
can be traced back to the very beginning of Islam when the Prophet himself
acted as an agent for his wife's trading operations. Islamic partnerships
(mudarabah) dominated the business world for centuries and the concept of
interest found very little application in day-to-day transactions.
This type of partnership went on to be
successful due to the fact that it combined the three most important factors of
production, capital, labour, and entrepreneurship. An individual with capital,
contributes the funds, and the partner managed the business. We can see this
kind of partnership in Islamic banking with the bank as the capital-owner and
the people as the partner when taking a loan from the bank.
Islamic banking consists of three main
components for its success, principles of Islam, resources, and effort. The
principles of Islam is important for ensuring a halal economy adhering to the
laws of Shari'ah, creating a fair and just finance system. Management of
resources is the second principle, fairness in distribution, uses for halal and
lawful purposes, and limit wastes. Finally, is the effort of man to uphold the
principles of Islam in economy, strive for cooperation and mutual benefit and
equality in effort are the key points.
4.2 Basic Principles of Islamic
Economics
Islamic
economic principles are based on three sources: Sunnah (Quranic instructions),
Ijma (the consensus of religious scholars), and Oiyas (personal opinions based
on analogy and religious doctrines). Islam provides specific instructions on
the following economic principles:
4.2.1
Individual Liberty
Islam teaching
does not interfere with the freedom of speech, work and earnings of an
individual provided this freedom is not harmful to the greater good of society.
Every individual will be answerable to Allah swt for his or her actions (4:7,
36:71, 16:111). Every individual is allowed liberty by God to earn wealth, own
it, enjoy it and spend it as he likes. It also entails freedom to adopt any
profession, business or vocation to earn livelihood as long as it is halal
(lawful).
4.2.2 Right to
Property
Private
ownership of resources is recognized as Allah has created the world with
natural resources for people to enjoy. Private owners are entitled to returns
on their labor and capital investments. In addition, individuals involved in
free trade must be rewarded for their investments and willingness to take
risks. However, they all must contribute to the betterment of the community by
making tax and charity payments. Unproductive hoarding of resources is
prohibited and profit making is encouraged. Collective ownership of resources
is not recognized as absolute ownership is only limited to Allah.
4.2.3 Economic
Inequality with Natural Limits
Allah has not
distributed His gifts and favor equally among mankind but, in His infinite
wisdom, has given some individuals more than others. Just as this is true of
pleasantness of voice, excellence of physique and intellectual power and so on,
so, too, is it the case with the material conditions of life. Human existence
has been so ordained that divergence, variety and inequality among men in their
ways and standards variety and inequality among men in their ways and standards
of living seems to be natural. Variety is the spice of life, and the driving
spirit of behind human endeavor and excellence. Consequently, all those
ideologies which want to force an artificial economic equality on mankind are
mistaken, unrealistic and impossible to realise. The equality which Islam
believes in is equality of opportunity to secure a livelihood and to climb the
ladder of success and prosperity. Islam desires that no obstacles should exist
in society to prevent an individual from striving for a living according to his
capacity and talents; nor should any social distinctions exist with the object
of safeguarding the privileges of a certain class, race, dynasty or group of people.
4.2.4 Social
Equality
Allah has
placed in the earth sustenance and provisions for all to cater their needs.
However, on account of various reasons, the distribution of these provisions
does not remain fair among all the human beings, thus making some lucky ones
very rich who possess wealth more than their needs and making many others very
poor who possess nothing or too little to meet their very basic necessities of
life. Islam meets this challenge of disproportionate division of wealth by
making it obligatory on the rich to surrender a part of their wealth for
helping the poor and unfortunate members of the community. Al-Quran says:
“Establish worship, pay Zakat and bow your heads with those who bow (in
worship)”- (2 : 43). The Holy Book again says “Ye will not attain unto piety
until ye spend of that which ye love. And whatsoever ye spend, Allah is aware
thereof.”(3:92). It further pronounces: “And in whose wealth there is a right
acknowledged, for the beggar and the destitute” (70 : 24-25).
In order to
make distribution of economic resources fair and just, the Islamic economic
system has established an elaborate system of Zakat and Sadaqat. In addition to
that, many restrictions have been placed barring an individual to earn wealth
through unfair, illegal and unjust means. Besides that the Islamic state can
also levy taxes. If all the economic teachings of Islamic are acted upon, the
distribution of incomes and wealth properly based on the principles of
socio-economic justice will be automatically achieved.
4.2.5 Wide
Circulation of Wealth
Moral
teachings and legal provisions of Islam are geared towards circulation of
wealth. Payments of ushr and zakat are obligatory on agricultural produce and
non-agricultural savings respectively and the system takes care that the
beneficiaries are disadvantaged members of the society. This is done by taking
wealth from the rich and distributing the same to the poor and the needy. This
is a conscious and well-designed effort for circulation of wealth.
4.2.6
Prohibition of Riba
An Islamic
economy is free of interest. Islam prohibits all transactions involving
interest. Interest is neither a trade nor a profit. It is a means of
exploitation and concentration of wealth. The Qur’an says:
"They
say, trade is like interest and Allah has allowed trade and prohibited
interest." (2:275).
"Whatever
you pay as interest, so that it may increase in the property of (other) men, it
does not increase with Allah."(30:39).
"O you
who believe, do not take interest, doubling and quadrupling, and keep your duty
to Allah, so that you may prosper." (3:130).
"O you
who believe, observe your duty to Allah and give up what remains (due) from
interest, if you are believers. But if you do not do it, then be warned of war
from Allah and His messenger; and if you repent, then you shall have your
capital. Do not exploit and be not exploited." (2:278-279).
4.2.7 System
of Zakah
Compulsory
payment of Zakah is one of the main principles of an Islamic economy. Every
Muslim who owns wealth more than his needs must pay the fixed rate of Zakah to
the Islamic state. Zakah is a means of narrowing the gap between the rich and
the poor. It helps the fair distribution of wealth. It is a form of social
security. The Islamic state is responsible for providing the basic necessities
of food, clothing, housing, medicine and education to every citizen. No-one
should have any fear of insecurity or poverty (9:69, 103, 98:5).
4.3
Benefits of Islamic Economics
Islamic banking and the finance industry
is growing at an annual rate of 20%
according to Central Bank of Malaysia. International giant banks such as HSBC
(HSBC Amanah), Citi Bank (Citi Islamic) established their Islamic units and
functioning in the Middle East region have proved the importance of Islamic
Economics.
First of all,
it can reduce economic disparity. This is because Islam does not promote
accumulate wealth. One of the five pillars of
Islam is zakat, or
giving a portion of your wealth to charity as Human beings are the trustees of
Allah. It benefits people at all points on the wealth spectrum and causes less
violence and thus, creating greater stability.
Secondly,
Islamic economics link savings and investment together. Putting the money into
an Islamic savings account is like putting into an investment
vehicle. This is because people
and institutions who participate in Islamic financial products interact as
buyers and sellers or as partners in a transaction rather than as lenders and
borrowers.
Thirdly, Islamic economics encourage stability in investment.
The approaches used by Islamic economics prohibits transaction involve any
excessive uncertainty (Gharar) or speculation. It eliminates all the companies
which financial practices are too risky and thus, it reduces risk and creates
greater investment stability. Investors following Islamic principles tend to follow a path
that encourages more thoughtful selections and longer-term commitments such as Intensive screenings, reduced risk, greater
stability, socially responsible investment selections.
Last but not least, it reduces the impact of harmful products
and practices. The companies that cause harm to surrounding environment and
people are avoided by Islamic investors. This is because Sharia prohibits financial transactions that involve
interest, speculation, or gambling, which is why Muslims can’t use most
conventional financial products. Sharia
prohibits financial transactions that involve interest, speculation, or
gambling, which is why Muslims can’t use most conventional financial products. The list of prohibitions also includes
weapons of mass destruction, cloning, and more.
4.4 Comparison between Islamic economic system and
conventional economic system
Conventional economic
system is mean by an economic that already been adopted and applied in the
economic systems. Conventional economic systems do not have absolute standard,
it can be change according to the conditions in the society. There are
capitalism economic, command economic and mixed economic in conventional
economic system. The country that applied capitalism economic is Germany,
United States, and others. For command economic the country is North Korea,
Soviet Union, China and Cuba. And for mixed economic, the country is Malaysia,
England, and Sweden. While, Islamic economic system is based in the proceeding
of Al-Quran and Al-Sunnah. In Islamic economic system, usury, gambling and
prostitution is prohibited. The country that applied Islamic economic system is
Pakistan.
We can compare Islamic
economic system and conventional economic system in 4 aspects. The first one is
right to ownership. In conventional economic system, there are existence of
right of private ownership especially in the capitalism economic. It means by
the production, distribution and exchange are managed by either individual or
groups of individual in order to gain private profit. It will disturb the
balance of distribution of wealth in the society. For example, the rich become
richer, and the poor will remain poor. But in Islamic economic system,
ownership belongs to God. But there are some rights given to the man in order
to fulfill the purpose of the God. Besides that, legal ownership by individual
is recognized in Islamic economy system but it is subject to moral obligation
where all wealth all section of society has the right to share. So in others
term, all production is not under private ownership but under public ownership.
Next, we will compare the economic freedom. In conventional economic system,
the economic is unrestricted and non-interference of the state especially in
capitalism economic. Everyone has the permission to initiate, organize and
establish any business, trade, enterprise and others. And people can earn their
income and spend their money every way they like it. The unrestricted economic
freedom will lead to bad ways to earn money, such as human trafficking, drug
trafficking, prostitution and gambling. It also will lead to the madness of
race for earning more money and ignore the moral value. Capitalism will become
a religion of money or dollar dictatorship. But in Islamic economic system, any
individual have the right to earn wealth, own wealth and spend his wealth, but
it will be limited. Islam makes distinction between halal and haram in every
economic activity. Others than that, a Muslim man need to pay Zakat and give
Sadaqah to those poor and needy. These is to promote the moral values in
Islamic society.
The third aspect is
monopoly. Competition always happen in conventional economic system. It will
lead to destruction of minor enterprises and firms. And these minor enterprises
need to merge with major organizations. It kills free competition, cause inflation
in market prices, and increase the unemployment in the society. While, in
Islamic economic system, unhealthy competition and monopolies is prohibited and
bans all the way lead to it. The Prophet Muhammad had said whoever monopolies
is a sinner. Commodities and services which are common interest of the
community are not allowed to be monopolized. The last aspect is institution of
interest. In conventional economic system, the institution of banking and
interest is the importance aspect. Bank will borrow capital form depositors and
investors at low rate of interest and lend to big enterprises at high rate of
interest. But in Islamic economic system, interest is the most exploitive
institution for humanity and has eliminated. It is called as Riba in the Syariah
law. According to Al-Quran that, taking interest is the biggest sin ever.
Therefore, in Islamic economic system, interest free basis.
4.5
Contract of Sale (Bai’)
Bai’ is refer both to the activities of
buying and selling. Derived from term Ba’ (for arm) because one extend one’s
arm to give or to take. It also means exchanging property for property, money
for property or property money.
“O you who believe, do not eat each
property among with a false way, except by way of trade applicable to the
mutual love between you. And do not kill yourselves; surely Allah is Merciful
to you.” Al Nisa’ 29.
There are 4 element of Bai' which is
Sellers and Buyers, Price, Item sold and lastly Contract. Both buyers and
sellers must be capable of taking responsibilities, not
prohibited from dealing with their own property and lastly no forcing and
threatening. The price must be known in currency either barter of monetary.
Items sold must be exist, pure and have use according to Shari'ah, known and
specific and capable of being delivered and free from encumbrances. Last
element of Bai' is contract. Both party must be absolute, definite and decisive
language. Offer and acceptance must be made one and same meeting and lastly the
acceptance must agree with the offer.
There are 11 type of Bai';
Type of Bai'
|
Definition
|
Bai’ Bithaman Ajil
|
refer to sale with deferred payment of
the price.
|
Bai’ Al Inah
|
defined as double sale involving
“buy-back”.
|
Bai’ Murabahah
|
sale of commodity
whereby price have addition of the stated profit.
|
Bai’ Al Musawamah
|
the seller is not obligated to
disclose the price paid.
|
Bai’ Al Salam
|
payment being made while the good
delivered at the agreed time.
|
Bai’ Al Dayn
|
sale of debt that is created under
Shari’ah compliant business activities.
|
Bai’ Al Tawarruq
|
buying a commodity on differed payment
and selling it with lower price.
|
Bai’ Al wadi’ah
|
The seller resell the goods at a
discount from the original cost.
|
Bai’ Al Tawliyah
|
resale of goods at the stated original
cost.
|
Bai’ Al Istijrar
|
recurring sale, repeat sale or supply
contract.
|
Bai’ AL Istisna’
|
sale on order which is price is paid
in advance but the goods is manufactured and will be delivered at the
specific time.
|
4.5.1 Defination of Khiyar
Khiyar means specific type of right of
either or both parties to the contract to confirm or rescind the contract.
Khiyar Al-Majlis (Session Option) is the option only occur during the session
which both parties have the right to withdraw as long as they remain in the
same majlis. Khiyar Al- Syart (Condition Option) is both or one party has the
choice of either confirming or canceling the contract during a period of time.
Khiyar Al-Ayb’ (Defect Option) Is an option that is caused by the defect in the
object of sale itself. Khiyar Al- Ru’yah (Inspection Option) Is an option that
is caused when a person buy a piece property without seeing the property.
5.0
Application Islamic Economic in Organization
5.1Banking
Institutions / Bayt al-Mal Institutions
Islamic banking is a concept that is
based on Sharia’ah Principles. Besides that, it is based on the faith that
everything belongs to God, and man being His agent on the earth possess these
things temporarily and secondarily.
“Interest” in Sharia’ah is known as
“Riba” or “Usury”. And Riba is prohibited in Islamic so there will be no Riba
in Islamic banking. Other than that, Islamic bank also in charge in
distribution of the Zakat to the poor people and needly.
5.2
Riba
The Arabic word 'riba' means 'increase in' or 'addition to' anything.
It is the premium that must be paid by the borrower to the lender along with
the principal amount as a condition for the loan or for an extension in its
maturity. However, Islam prohibits the lending of money for profit in order to
protect the weak from exploitation.
There are two type of Riba which can categorized into Riba al-duyun and
Riba al-buyu. Riba al-duyun refers to the the increase for the repayment
deferment or postponement in contract of loan. It is the interest that earned from lending money to other
individuals or parties. For
instance, the transaction in which
an individual paid Rm12,00 for an amount of RM10,00 after one year. The
increment in the amount is called Riba. The other type of Riba is Riba al-buyu.
In Riba al-buyu, we can
divide into two small part which are Riba al-Fadl and Riba al-Nasiah. Riba
al-Fadl derived from the Arabic root, fadl which means "increase" or "growth". It is referring to the
inequality of quantity between the ribawi counter values. For instance, the
exchange of 10 kg of excellent-quality dates for 20 kg of poor quality dates.
While Riba al-Nasiah, it derived from the Arabic root ''nasa'a'' which means to ''delay" or "defer“. It refers to deferment of one
of the ribawi counter values which share the common characteristics. For
instance, 100 kg of dates to be paid back with 120 kg six month later.
Ribawi
materials are divided
into two basis and under each basis are the different kinds as follows:
Medium of exchange
|
Food stuff
|
·
Gold
·
Silver
·
USD
·
Singapore Dollar
·
MYR
|
Grains
·
Rice
·
Wheat
·
Corn
Meats
·
Beef
·
Mutton
·
Chicken
·
Fishes
Vegetables
·
Tomatoes
·
Beans
Fruits
·
Oranges
·
Apples
Salts
·
Salt
·
Sugar
|
There are some rules of exchange for
Ribawi materials. For the same classifications in the same category of Ribawi materials, the
materials must be of the same weight, measurement or number of units. As an
example, 5 grams of 916 gold for 5 grams of 750 gold; 10grams of Basmathi rice
for 10 grams of A1 rice. For Ribawi materials of different classifications in the same
category, different in weight, measurements or number of units allowed.
The payment must still be on cash terms. The examples included: Rm3800 for
USD1000 ,10kg of rice for 15kg of wheats as well as 1 tonne of palm oil for 2
tonnes of sugar. For different categories of Ribawi materials, there are no rules
being imposed. Different in weights, measurements or number of units allowed.
For instance, 30kg of wheat for USD10 and 1 tonne of palm oil for Rm1500.
Since the
individual with money can gain his capital through interest, therefore overly
rely on interest could prevent people from working. It leads that the
individual will not bother to operate a business or involved himself in
industry sector, thus the human capital to decrease in a country. As a result,
the welfare of people around the world will be deprived because all the industries,
constructions and commences need capital at risk. In term of economic view, it
is a very serious matter.
Moreover,
taking of interest is against the teaching of Islam because it discourages
people from doing good deeds. People are willing to lend to each other
whole-hearted without expecting back no more than what he has loaned if
interest is prohibited in this society. This
can prevent the effect of enlarging the economic gaps where the
richs become richer and the poor becomes poorer.
5.3 Takaful
Insurance has existed since
at least 215 BC. This concept has been practiced in various forms for over
1400 years. It originates from the Arabic word Kafalah, which means
"guaranteeing each other" or "joint guarantee". The concept
is in line with the principles of compensation and shared responsibilities
among the community. Takaful is commonly referred to as Islamic insurance;
this is due to the apparent similarity between the contract of kafalah
(guarantee) and that of insurance. In takaful, the policyholders are joint
investors with the insurance vendor (the takaful operator), who acts as a
mudarib – a manager or an entrepreneurial agent for the policyholders. The
policyholders share in the investment pool's profits as well as its losses. A
positive return on policies is not legally guaranteed, as any fixed profit
guarantee would be akin to receiving interest and offend the prohibition
against riba. Takaful complies with the Shari’ah (which outlines the principles
of compensation and shared responsibilities among the community) and has been
approved by Muslim scholars. There is now general, health and family (life)
takaful plans available for the Muslim communities.
5.4
Zakat
As one of the
Five Pillars of Islam, zakat is a religious obligation for all Muslims who meet
the necessary criteria of wealth. It is not a charitable contribution but
rather considered a tax. The payment and disputes on zakat have played a major
role in the history of Islam, notably during the Ridda wars.
Zakat is based
on income and the value of all of one's possessions. It is usually 2.5% of a
Muslim's total savings and wealth above a minimum amount known as nisab, but
Islamic scholars differ on how much nisab is and other aspects of zakat.
Muslims with income less than nisab, does not have to pay zakat. The collected
amount is paid first to zakat collectors, and then to poor Muslims, to new
converts to Islam, to Islamic clergy, and others.
During the
Islamic period, Zakat payments were collected by the State and the funds were
used to alleviate all kinds of human distress including setting free the slaves
by paying off their masters. The objective is to take away a part of the wealth
of the well-to-do and to distribute it among the poor and the needy.
Although it is
mostly a voluntary contribution, in Malaysia, it is mandated and collected by
the state.
If not this
obligation is not fulfilled, actions can be taken depending on the country and
its sets of laws regarding zakat.
The following
are the ones that are eligible to receive zakat:
• Those living without means of livelihood (Al-Fuqarā'), the
poor
• Those who cannot meet their basic needs (Al-Masākīn),
the needy
• To zakat collectors (Al-Āmilīyn 'Alihā)
• To persuade those sympathetic to or expected to
convert to Islam (Al-Mu'allafatu Qulūbuhum), recent converts to
Islam and potential allies in the cause of Islam
• To free from slavery or servitude (Fir-Riqāb), slaves
of Muslims who have or intend to free from their master by means of a kitabah contract
• Those who have incurred overwhelming debts while
attempting to satisfy their basic needs (Al-Ghārimīn), debtors who
in pursuit of a worthy goal incurred a debt
• Those fighting for a religious cause or a cause of God
(Fī Sabīlillāh), or for Jihad in the way of Allah by means of
pen, word, or sword, or for Islamic warriors who fight against the
unbelievers but are not part of salaried soldiers.
• Wayfarers, stranded travellers (Ibnu Al-Sabīl), travellers
who are traveling with a worthy goal but cannot reach their destination without
financial assistance.
5.5
Gharar
Gharar is
defined in English as 'uncertainty' or 'deceptive uncertainty'. The Qur'an uses
the word "al-gharūr" to mean "deceptive". Unlike riba,
gharar is not specifically and extensively defined. While the prohibition of
riba is absolute, some degree of gharar or uncertainty is acceptable in the
Islamic framework. Taking excessive risks is prohibited.
Minor gharar is
allowed in the Islamic economy. An example of this is allowing a farmer to
short-sell his produce. This involves the farmer to sell his produce and
deliver it to the buyer at a later date under the contract of bay` al-salam.
Another example is business investment, because the outcome of the business is
unknown, gharar is involved. However, it is not prohibited.
What is
prohibited is activities that involves great gharar, because becomes similar to
gambling. An example is involvement in the stock market, there is a lot of
deceptions and risk taking involved, and therefore it is prohibited.
6.0 Conclusion
In a nutshell, we can see
clearly that Islam is the only major religion that imparts detailed
prescriptions for the economic life of its followers. Islam addresses the value
of natural resources, sets standards for the exploitation of minerals and
stipulates guidelines on inheritance, finance, taxation and banking. It also
emphasizes the importance of education, healthcare, hard work, investment and a
social safety net, among other things. Furthermore, Islam always believes in
justice and fairness in the economic field. Abolition of interest, institution
of sadaqat and Zakat, concept of lawful and unlawful, equitable distribution of
wealth, prohibition of hoarding and stress on circulation of wealth , concern
for well being of the poor are the distinctive features of the Islamic economic
system. Thus, it is proven that Islamic teaching brings many benefits to
mankind. It teach us how to become a better person. Therefore, it should not be
only implemented in economic field but our daily life as well.
7.0 References
a) http://www.islamic-banking.com/what_is_ibanking.aspx
b) http://www.islamic-banking.com/islamic-economics.aspx
c) http://www.islamic-finance.com/item160_f.htm
d) http://www.angelfire.com/bc3/johnsonuk/eng/dawa/economic.html
e) http://www.islam101.com/economy/economicsPrinciples.htm
f) http://www.slideshare.net/echizen94/fie-assignment
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