Islamic Economics

The present paper examines and evaluates research experiences in the area of the history of Islamic economic thought during the last 30 years with the objective to see the pace of research and its coverage, both author-wise and idea-wise, and to determine the future research agenda in the light of the past progress and trends of the literature. The paper begins with a brief survey of the early literature on the history of Islamic
economic thought, prior to 30-years, to provide a background. Then it studies and evaluates the research during the last thirty years, 1976-2006. It finds that hitherto the research in the history of Islamic economic thought has been language, region and period specific – Arabic, the Middle East and up to 9th/15th century respectively. More
attention has been paid to write on economic thought of few personalities than others. The situation is still worse in case of idea-wise research. However, this literature has exerted some effects on scholars of the main stream economic thought and a few of them are trying to rehabilitate it in the main body of economic thought. At the end, the
paper emphasizes on need for intensive and extensive research to include more personalities, ideas, periods, languages and regions and to write a systematic history of the subject.

A well-regulated economic system requires incentives that reward productive and withhold rewards from unproductive activity. Such incentives are put in place by means of legislation and enforced with the help of regulatory agencies. A well-managed system will allocate resources more efficiently than a system in which income may be gained without active participation in economic activity, by lending at interest in particular, which invariably increases the prices of finished goods without, however, adding any value. Interest-based lending produces a range of important, though rarely highlighted, side effects. They include inefficiency, indebtedness, instability, inflation, unemployment, slow or declining economic growth, and an uneven distribution of wealth. (224 pages)

In Our Economy, al-Sadr strives to show that Islam has answers to problems of the modern world by presenting an Islamic alternative to both capitalism and socialism. He rejects socialism on the basis that Islam distinguishes between the individual and the ruler in an Islamic state in a manner that requires a distinction between private and public property. However, he also rejects capitalism's notion that private property is justified in its own right, arguing instead that both private and public property originate from God, and that the rights and obligations of both private individuals and rulers are therefore dictated by Islam. He also rejects the conclusion that this makes Islamic economics a mixture between capitalism and socialism, arguing that capitalism and socialism each come about as the natural conclusion of certain ideologies, while Islamic economics comes about as the natural conclusion of Islamic ideology and therefore is justified entirely independently of other systems of economics.

This book is divided into 4 sections. Volume 1 - I, Volume 1 - II, Volume 2 - I and Volume 2 - II.

Bu araştırma 1990’lı yıllarda İslamcıların temelde kapitalizme, özelde ise hem dönemin iktisadi gündemine, hem de bir dizi iktisadi kavrama ve olguya bakışlarını ele almaktadır. Türkiye’de 1980 yılında öne çıkan 24 Ocak ve 12 Eylül tarihleri beraberinde önemli değişim ve dönüşümleri meydana getirmiştir. Bu değişimlerin ve dönüşümlerin muhafazakâr bir parti ve lider öncülüğünde gerçekleşmesi meseleyi din - dindarlar, İslam - İslamcılar bağlamında önemli hale getirmektedir. Özellikle 1990’lı yıllardan itibaren yükselişe geçen İslamcılık da mezkûr dönüşümden etkilenmiştir. İslamcılığın siyasal ve toplumsal yükselişinin yanı sıra iktisadi yükselişi, İslam-iktisat ilişkisinin ve bu ilişkinin alt başlıklarının mesele haline gelmesine sebep olmuştur. O dönemde İslamcıların kapitalizm bağlamında sermaye, piyasa, bankacılık, faiz, girişimcilik, özelleştirme, gümrük birliği, tekelleşme, liberalizm, kültür, ahlâk, tabakalaşma ve eşitsizlik gibi kavramların dergilerde tartıştığı görülmektedir.
Türkiye’de İslamcılık hareketi 2. Meşrutiyet döneminden itibaren ortaya çıkışıyla birlikte daima temel olarak dergiler üzerinden varlığını sürdürmüş, gelişimini sağlamıştır. Bu çalışmada da 1990’lı yıllar boyunca yayın yapmış İslamcı dergilerden Çerçeve, Haksöz, İktisat ve İş Dünyası ve İzlenim’in bağlamı ele alınıp İslamcıların kapitalizme ve kapitalizmden doğan bir dizi olgu ve meseleye bakışları incelenmiştir.

It is shown in this study that most of the Muslim farmers' crops in Glagahagung village are sold to the middlemen. Therefore, the this study aims to find out the reasons of the Muslim farmers sell their crops to the middlemen and to know the trading practice done by the middlemen. This study is a case study with descriptive qualitative approach. This study discovered several reasons of the Muslim farmers in Glagahagung village selling their crops to the middlemen, they are: 1) the place is close to the rice field, 2) the whole crops can only be bought by the middlemen, 3) the farmers are accustomed to sell their crops tho the middlemen, 4) the middlemen is the only buyer of the farmers' crops, 5) the middlemen ease the selling of the crops, and 6) the middlemen provide workers to harvest the crops. Those reasons demonstrate that the middlemen is perceived as something that can give advantage to the Muslim farmers in Glagahagung village. Nevertheless, though giving advantages, there are some middlemen who contravene the Islamic business norms in crops trading with the Muslim farmers in Glagahagung village.

This study aims to analyze the economic value of the application of biogas technology based on dairy farming. The data analysis used a quantitative method with an approach to the value of biogas waste production. The results showed that 23.575 kg of livestock manure in Enrekang Regency was able to produce 688,390 m3 / year of biogas production which was equivalent to 426,802 liters of kerosene so that annual savings of IDR 4.694.822.000 / year and the equivalent of 3 kg of Liquefied Petroleum Gas were IDR 2.111.062.667/year. Economically, it has been proven that the application of biogas installations is feasible as rural alternative energy.

Based on the failure to cut down poverty rate to 7% by 2019, I argue that the Indonesian Government needs not only planning and identifying targets, but also look for ways to realise its objectives. The State Budget spent through social spending only have a minuscule impact on poverty reduction, which I strongly suspect to eventuate because the poor lacks the capability to decide on which aspects they should utilise the funds.

I then explained two underlying aspects of blockchain technology: smart contracts and digital identity, and how these two could help the Government achieve its development objectives.

The Government must be both a planner and a searcher. Identify what needs to be resolved and search for ways to resolve it.

Islamic finance presents itself as based on the uniqueness of Islamic ethics, originating in divine revelation (the Quran) and the actions and sayings of the Prophet (Sunna). It is argued, first, that there is nothing unique in this ethics and second, that on the contrary some parts of the Quran and the Sunna can in the 21st century only be found reprehensible. A radically different way of looking at the Quran and the Sunna is called for. A number of Muslim intellectuals has been leading the way. A brief review of their ideas is given.

This conceptual review aims to analyze the performance measurement of Islamic banks based on sharia principles using the Tawhid String Relationship (TSR) concept. The method used is descriptive and qualitative, where the data sources from previous studies in the form of journals and books related to the research topic. Therefore, the formulation of the problem in this conceptual review consists of research questions as follows: (i) How should the performance of Islamic banks be based on the perspective of the Tawhid String Relationship (TSR)?; (ii) How is the implementation of the TSR concept on the performance of Islamic banks?; (iii) What is the role of the government in supporting to achieve of excellence Islamic bank performance?. The study results are that Islamic banks based on TSR have four crucial pillars: spiritual aspects, financial aspects, social aspects, and environmental aspects. Furthermore, based on this, the performance measurement of Islamic banks needs to be equipped with an Islamic Performance Ratio (IPR). Further, the government also has a significant role in improving the performance achievemnet of Islamic banks through policies that support increasing market share, such as converting state-owned conventional banks into Islamic banks. The outcome of this research is to provide information to stakeholders of Islamic banks to use an additional ratio, namely IPR, to measure the performance of Islamic banks.

تحاول هذه الورقة البحثية تسليط الضوء على الأزمة المالية العالمية من خلال تحليل جذور ودوافع حدوثها وأهم خصائصها، وكذا تداعياتها على الاقتصاد العالمي من خلال التطرق إلى آثارها على بعض المتغيرات الاقتصادية، مع محاولة إبراز سبب بقاء البنوك الإسلامية في منأى عنها مقارنة بالبنوك التقليدية.

This paper is trying to shed light on the global financial crisis through the analysis of the roots and motives of the most important characteristics of occurrence, as well as its repercussions on the world economy by addressing the implications of some economic variables, while attempting to highlight why the Islamic banks shielded from them compared to traditional banks.

In-state revenue, the tax sector is one of the biggest contributors to the country's infrastructure development. Tax contribution to protecting the financial sector. However, lately, the condition of some countries is less stable because of the COVID-19 virus which limits all human activities that have an impact on decreasing tax revenues and economic decline. Thus, the purpose of this study is to analyze the right policies to be implemented by the Indonesian government in optimizing tax revenues in the midst of the COVID-19 pandemic. Descriptive qualitative method is used to directly see the impact and tax regulations set by the governments of the member countries of the Islamic Cooperation Organization (OIC). By looking at the results of the research, the government's policy of providing tax breaks and cuts in Indonesia with an unstable financial condition provides an opportunity for people to make tax payments. This must also be supported by increased public awareness of the importance of taxes and regulations or tax violation fines. The government can also optimize taxes by increasing the accurate and selective supervision of goods that endanger human health so that they do not occur in other expenses caused by goods entering Indonesia.

With many women receiving tertiary education, more women have become significant income earners and have the opportunity to save. As a result, more women are expected to become eligible payers of zakat on wealth. This paper examined payment of an important zakat on wealth – zakat on banking deposits among Muslim women in Selangor and Federal Territories. Specifically, the paper examined the demographic profiles between those that paid zakat and those who chose not to pay. Characteristics such as age, education level, employment status, marital status, monthly income, zakat channels, and resident areas were examined to determine the main drivers behind their payment of zakat on banking deposits. Next, the paper explored the level of zakat literacy among the respondents. We assumed that zakat literacy plays important roles behind the payment of zakat on deposits given the advancement of the deposit products. In measuring this, we adapted measurement of financial literacy as introduced by OECD namely awareness, knowledge, skills, attitudes and behaviours.  In achieving these objectives, a survey among  Muslim women respondents was conducted in Klang Valley.  Findings indicated that age, education level, employment status, annual income per month, zakat channels, annual zakat payment and residential areas played important roles in influencing payment of zakat on banking deposits among the respondents. Meanwhile, among the dimensions of financial literacy investigated, only age and monthly income were found to have  positive correlations with zakat awareness and behaviour. Surprisingly, the correlations between age and zakat knowledge and skills were found to be significantly negative. It is expected that this study may help zakat institutions to understand their women zakat clients and guide them to develop appropriate program of zakat literacy suitable for women of various demographic profiles.

Economics is a fundamental part of every society, similarly, Islam is one of the dominant faith practiced all around the world and a complete code of life. It has given some specific guidelines regarding economics. The article discusses the core concepts of the economic system with reference to Islamic teachings. It covers concepts of Zakat, Riba and general guidelines about economic activity within a state, with reference to Pakistan. The paper has made the Quran and the state of Medina as the point of reference to understand the spirit of the economic system implemented in that milieu. And has tried to understand the contemporary basic economics affecting and influencing common life.


Keywords: Zakat, Riba, Islamic Economic System, Usury.

Long before the Dana Gas Sukuk default highlighted how the legal complexity of Sukuk could be exploited in a default situation The  Investment Dar company of Kuwait tried the same strategy.

Did they succeed (like Dana Gas) or Fail? This paper looks in detail at the case and the various legal aspects.

In particular the author looks at the heart of the problem and the source of this 'Shariah  Compliance Risk' - form over substance compliance with Islamic non-interest-based investment principles.

The Six AAOIFI Sukuk principles highlighted by the esteemed and learned Sheikh Taqi Usmani also highlighted these structural issues and are covered here.

The aim of the present study is to identify the extent
to which commercial Islamic banks in Jordan pay
attention to knowledge management and to explore the
interest level with various knowledge resources in their
strategies. The other goal is to identify the part taken by
knowledge resource diversification strategy in the increase
of organizational learning levels among employees.
Participants were (220) employees selected with the
simple random method and recruited from the different
organizational levels at branch Islamic banks in Jordan
representing 20% of the whole population (N=1101). Data
collected using the questionnaires were analyzed to and
the following results were reached:
a. In general, the commercial Islamic banks employ
the diversification strategy management at high level
(M=3.93), and questionnaire areas were in the following
descendent order: organizational entities, human
resources, and artifacts made in the organization.
b. Results show that knowledge resource diversification
strategy management has a significant part at a high
level (M=4.34) in increasing the organizational learning
level among employees at the Jordanian Islamic banks
studied. Specifically, dimensions of knowledge resource
diversification strategy management were in descendant
order: artifacts made by the organization, organizational
entities, and human resources available at the organization.
c. There were no statistically significant differences
attributed to sex and experience regarding the role of
knowledge resource diversification strategy management;
whereas statistically significant differences attributed to
academic qualifications were found regarding the role of
knowledge resource diversification strategy management
excluding the knowledge resources related to artifacts
made by the organization.

Paper ini ditulis oleh mahasiswa prodi Perbankan Syariah, Jurusan Syariah dan Ekonomi Islam, Sekolah Tinggi Agama Islam Negeri (STAIN) Curup, semester 4 RK, dalam mata kuliah Tafsir Ayat Ekonomi. Artikel ini ditulis secara berkelompok oleh:
1. Hidayatullah
2. Jaka Purnomo
3. Nike Safitri
4. Susi Ariani

This study explores research trends in Western literature about Zakāh, which is considered to be an equivalent, to a certain degree, to a charity in the Christian tradition. The study is based on a sample of considerable studies in English and French, collected over a period of eighty one years (1934-2015). The preliminary results highlight three important implications. These are: (1) the multiplicity and the diversity of the conceptualization of Zakāh beyond the purely moral, juristic, discursive and literalistic approaches which seem to be dominating research trends in the Arab-Muslim world; (2) the predominance of theoretical studies over applied ones. (3) Zakāh as a valuable resource is perceived; according to some treatises as an instrument of power from the geo-economics viewpoint .

Waqf Financing for Higher Education: Issues, Challenges and the Way Forward provides fundamental understanding on Waqf financing for higher education in order to highlight the current and future challenges to the institution. The book includes a range of topics such as Aplikasi Wakaf Korporat dalam Pembiayaan Pembangunan Institusi Pengajian Tinggi Islam, Waqf  Financing for Islamic Higher Education: USIM’s Perspectives, The Receptiveness of Students towards the Establishment of Islamic Waqf  Bank, Konsep dan Pembangunan Wakaf di Negeri Sembilan dari Perspektif Majlis Agama Islam Negeri Sembilan, Tinjauan Awal Terhadap Kesediaan Masyarakat Islam Menyumbang Kepada Institusi Bank Wakaf  Islam untuk Pembiayaan Pendidikan and  Waqf  Financing for Higher Education: Hibah Trust as Alternative Options. This book tries to introduce a true picture of Waqf financing in this country and the Muslim world in order to solve many unresolved issues for Muslim ummah such as the misconception of Muslim society towards the aim and operation of this Islamic institution. This book is suitable for college and university students, academician, practitioner and the general public who are interested in obtaining basic concepts pertaining to waqf financing for higher education.

Encore extrêmement limitée il y a 30 ans, la finance islamique moderne atteindra en 2020 un encours de 4500 milliards de dollars. Si cela ne parait pas considérable à l'échelle mondiale, les banques islamiques semblent avoir bien résisté à la crise; Ainsi, les organisations financières internationales tablent sur une croissance annuelle de plus de 15% sur les 5 à 10 ans à venir. Après avoir longtemps ciblé essentiellement un marché potentiel de 1.5 milliards de musulmans, le système bancaire islamique intéresse désormais des acteurs du monde entier. La déconfiture des marchés financiers dans les pays de l'OCDE pourrait conduire les responsables politiques à considérées d'autres modèles et la finance islamique n'est pas sans attrait. Les banques islamiques sont considérées comme un refuge relativement sûr contre les turbulences des marchés financiers mondiaux, et elles incarnent un certain esprit d'équité et de justice islamique présente plusieurs caractéristiques intéressantes, notamment en matière de gestion des risques, de transparence ou de régulation. Il a fallu attendre plusieurs décennies avant que le Maroc n'adopte la finance islamique pour laquelle il a choisi le nom de participative. Depuis le démarrage des banques c'est un véritable écosystème qui a vu le jour. La nouvelle loi 103.12 définit le statut des banques participatives et précises les produits qui pourront être commercialisés. Elle dote ce nouvel écosystème d'organes de contrôle et de régulation. L'objectif de cet ouvrage est de fournir aux praticiens des banques et aux financiers d'entreprise, un guide des diverses opérations effectués dans le cadre de la finance participative, aux étudiants et aux universitaires un manuel en prise directe sur les pratiques financières des banques participatives.

This study aims to analyze the effect of total assets, promotion and documentation costs, official travel expenses, zakat fund receipts and zakat fund distribution to the efficiency level of Badan Amil Zakat Nasional (BAZNAS) in Managing Zakat Funds during 2012 to 2016 using quantitative non-Parametric Data Envelopment Analysis (DEA) approaches production and collects data by documentation method. The type of data used in this study is secondary data in the form of annual financial statements BAZNAS period 2012 to 2016. DEA non parametric method uses two variables namely input variables and output variables. The input variables used in this study are total assets, promotion and documentation costs, and official travel costs, while for the output variables are zakat fund receipts and zakat fund disbursement. Based on the results of the research that has been done using the DEA method, it is found that BAZNAS experienced efficiency in 2012, 2013 and 2014 with an efficiency score of 100.00%, while in 2015 and 2016 BAZNAS experienced inefficiency that is in 2015 with an efficiency score of 79.16% 2016 with an efficiency score of 98.72%. Inefficiency does not occur in 2012, 2013 and 2014 because the efficiency value in those three years has reached a relative maximum whereas in 2015 and 2016 actual and target values are not suitable or unbalanced. By 2015 the input variables are inefficient because they do not fit the DEA calculation targets, which are total assets, promotion and documentation costs, and official travel expenses. The output variable that experienced inefsien in 2015 is the distribution of zakat. While in the year 2016 the three input variables experienced inefficiency and one variable output of the distribution of zakat funds. Inefficiencies can be overcome by adjusting between the target and actual targets set by DEA calculations. According to BAZNAS researchers should be able to pay attention to what factors could be the cause of inefficiency, so as to improve the efficiency level in the next year and can improve BAZNAS performance for the better.

This study examines the factors which influence and contribute towards the financial viability of Islamic finance and its impact on global financial stability. However, the purpose of this paper is to differentiate the practical implications of both Islamic and conventional finance on global financial stability. The Islamic finance is asset backed financing which creates wealth through trade, commerce and believes in risk and return sharing. Islamic banking is asset driven as against to conventional banking which is liability driven. In order to introduce new financial products for market, financial innovation in Islamic finance must be within the Shari'ah parameters that are tested against the 'Maqasid al-Shari'ah'. Interest-based system leads to income and wealth inequalities and mis-allocation of resources. Moreover this system has absence of just and equitable aspect of distribution that may exploit either the debt holder or the financier. Such implications are reached to a tipping point that leaves only one choice: change or face continued decline and misery.

The research aims to test the influence of the variables affecting Non-Performing Financing (NPF) in this case is Financing Debt Ratio (FDR), Capital Adequacy Ratio (CAR), Operational Expense Ratio against Operation Income (BOPO), Exchange Rate, Inflation and Real National Income (PDBR). The data analysis method used in this study is multiple regression. Regression analysis method, in addition to measuring the strength of the relationship between two or more variables, also shows the direction of the relationship between the dependent variable with the independent variable The result of processing obtained from the value of R2 adjusted equal to 0,362 which means variation or behavior of independent variable that is FDR, CAR, BOPO, Kurs, Inflation, and PDRB able to explain variations or the behavior of the dependent variable that is NPF equal to 36,2%. The rest is equal to 63,8% are variations or actions of other independent variables that affect the NPF but are not included in the m...

The commentaries on Qur'anic and Hadith texts extol the benefits of Zakat and provide an extensive rationalization for its institution as a pillar of Islam. Some benefits include Zakat's impacts on fostering social cohesion, providing a safety net for the poor, and forcing capital circulation in the market. Zakat, as annual stimuli to the economy, is one dimension that is understudied and theorized, which should be viewed as part and parcel, if not a central aspect of capitalizing various sectors of the economy on regular intervals. The circulation of money and products in the market, among a diverse set of actors, are central to a healthy economy and balanced growth. I use the term " growth " here not in its current sense of boom to bust trajectory, but rather in the sense of assisting individuals and communities move towards a balanced productivity and earning an honest living to support pursuit of their potential in life. Parking massive amounts of wealth for prolonged periods of time to avoid the " dangers " of the market is the strategy pursued by the rich. The security of wealth and steady investments represent the very cautious approach but in reality, the returns are limited and the growth is stagnant and sometimes mostly driven through dependence on movement in interest rates and shifts in tax burdens in current global capitalist economies. At times of economic crisis and uncertainty, the wealthy and banks tend to freeze the circulation of capital into the market, thus causing further deterioration of the market conditions and possible a greater loss or depreciation of the assets. The countermeasures to an economic crisis and freezing of money circulation include building confidence and infusing liquidities into the market. We did witness these measures in 2008, post the economic crisis, but the problem was that the bulk of this infusion of liquidity from tax-payers' pockets was directed at the banks and corporations that caused the collapse in the first place, while the middle class and the poor ended-up subsidizing the rich and wealthy. While the economy recovered in many parts of the world, the growth and expansion, however, in the past ten years, have gone to the 1% global top, while the rest saw their income and wealth stagnate or go into the negative. Furthermore, the process is stoking a massive boom cycle that is heading in the near future into a deeper and more complex bust. The short discussion above is important and very much connected to Zakat as annual capital stimuli to the economy with a heavy focus on the consumer products side of the market. Taking the 2.5% annual Zakat on wealth, which is paid by those who have set aside capital for a period of a year is the opposite of a trickle-down economics. The current tax and corporate codes in the U.S. is based on a trickle-down economic theory, which posits that the more money we give to those on top the more jobs, investment, and growth is generated. However, the evidence from previous periods of trickle-down economics policies shows that this kind of measures ended in economic disasters and the shrinking of the real income and wealth for the poor and middle class. More capital in the hands of the wealthy did not and will not translate to real growth or expansion of economic opportunities in the market but only produce a fictitious boom followed by a certain bust that punishes the poor and middle class again. Zakat is an annual stimulus to the market and is carried out through a net transfer of real capital from the wealthy to those who qualify according to established criteria. The poor, needy and indebted, among the 8 categories, receive the capital which is immediately infused into the market to address pressing needs. The trickle-down economic model results in wealth accumulation and the further removing of liquidity from the market, the opposite of the claims made by those who champion this theory. Assuming a Zakat eligible person receives $1000, there is a possibility that this amount is used to pay rent, buy food, fix the fridge, and other deferred items. Here, we have an important outcome of the Zakat expenditures, which resulted in putting capital into circulation by means of the expenditures undertaken by the recipients. For a period of time, I was thinking about the Qur'anic and Hadith texts that speak or define Zakat both as a purification and as a growth in wealth for those who give it out. The existing classical explanation viewed growth in terms of rewards in the afterlife, a correct metaphysical understanding, but I wanted to explore its temporal impact since they are interconnected.

Demand and supply theory is a core concept in microeconomics which taught at schools and colleges with a little variation. The authors and subsequent followers of this theory discuss the issues related to goods, services, quantity, quality, time, preference, technology, human behaviour and price movement. Apart from these functions, there are various issues discussed in many schools of thought. After studying the philosophical aspect of demand theory, it seems some things are missing in this theory. This paper discusses the issues related to the moral behaviour of consumer and rationality of demand theory which is one of the important aspects of the demand theory.

COVID-19 is a global pandemic (Jaihah) that brings hardships (Haraj). This has affected all aspects of our life. The United Nations Development Programme reported that uncertainties due to this global pandemic are manifold. Under a 'High Damage' scenario, the world could see a staggering 251 million people driven into extreme poverty by the pandemic, bringing the total number to one billion by 2030. The Singapore government had made swift and comprehensive response by forming multi-ministry task force and galvanise various organisations, at all levels, including faith-based institutions to manage and address the multiple challenges in hands. This paper highlight the 3Rs approach adopted by the government through their policies, measures and actions on various aspects of sustainability including climate and social changes and how the rest of the stakeholders come together for greater impact, with specific focus on the response from the Muslim community.