PRINCIPLES OF ISLAMIC

ECONOMICS
1 By
Basharat Hossain
Assistant Professor of Economics; Dept. of Business Administration;
International Islamic University Chittagong (IIUC); Bangladesh
BOOK LINK

 https://
xeroxtree.com/pdf/islamic_economicsan_introductory_a
nalysis.pdf
 https://www.pathagar.com/book/detail/2153

 Fundamentals of Islamic Economic System By Dr.

Muhammad Sharif Chaudhry
 http://www.muslimtents.com/shaufi/b16/b16_1.htm

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 Economics is the study of how societies use scarce
resources and produce valuable commodities to meet the
unlimited wants of the people

 Scarce resource:
 Limitedusable resources
 Example: water of Sea vs. Pure drinking water

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WANTS VS.NEED VS.DEMAND
 Need
 Necessary-classroom
 Comfortable-ac CR
 Luxury-Refrigerator; TV

 Firsttwo-Demand-Absolute need
 Last one is relative need-wants
 Example:

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 Criticism of conventional economics & solution
 conventional economics
 Capitalism
 Communism
 World traditional and current economic system

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NATURE OF ECONOMICS
 Positive
 EX: price of onion increases; then demand will fall
 1250% higher price!!!!!!!!!!!!!!!
 Current price 50 taka; 150% higher price
 Tax: redistribution of income from rich to poor

 Normative
 Valuebased economics
 What should be done
 Ex: market monitoring & interfere on the market

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 Bangladesh
 Indirecttax> direct tax= 83%>17%
 Uses of tax: govt revenue; development and non-
development works
Islamic economics-normative economics

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ECONOMIC ISSUES
 Allocation
 Production

 Distribution

 consumption

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DEFINITION OF ISLAMIC ECONOMICS
 Islamic economics can be defined as that part of Islamic
code which studies as a process, economic, social and
moral behavior in an integrated manner in relation to
allocation; production, distribution and consumption of
goods and services.

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 Social
 China – USA-vietnam
 Wine/alcohol
 Cut/suppress

 Moral
 Shortage in weight
 Halal/haram-no difference
 Illegaly capture the wealth of another people

 Economic
 Alloc;pr;dis;cons.
 Useful goods/services allowed
 Harmful goods/services not allowed 10
 Defects of Capitalism:
 Tellinga lie
 Cheating; fraud; deception
 False oath; no care about honesty
 Gambling/game of chance: casino
 Haram : alcoholic product
 Adulteration
 Separation of religion from daily/economic life
 No Govt. interfere

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 Defects of Communism:
 A group of people always control the state and wealth of the
country
 No Hereafter life- creates dishonesty
 Only worldly life- why will you be an honest person?
 State fix the price-not justice/ not fair

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 Islam
 Balanced
 Moderation : consumption; spending
 Dual life: accountability in the hereafter life
 Human-representative of Allah
 Govt: if necessary then interfere

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ISLAMIC ECONOMY
 Full pledge Islamic economic system

 Firststate: Madina in 6th century

 At present
 Iran
 Sudan

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ISLAMIC ECONOMY
 Market size: $3 trillion
 About 2000 FIs

 More than 75 countries

 Most coverage in Asia followed by Africa

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ISLAMIC ECONOMY IN BANGLADESH
 About 100 Islamic FIs
 Market size: more than BDT 3000 billion

 27 banks

 27 insurance companies

 3 non-bank financial institutions

 10 Microfinance institutions

 One Islamic money market

 Two Islamic capital market indexes

 15 educational and training institutes offer Islamic

economics and finance course
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SOURCES OF KNOWLEDGE IN ISLAMIC
ECONOMICS
 Al-Quran
 Al-Hadith

 Ijma

 Qiyas

Why do not we follow other religious books?

Why is only al-Quran?
Quran is unchanged
laws of Al-Quran is similarly helpful/applicable for all
kinds of people
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other religious books: changed; man made.
 Do non-muslim may practice islamic economics?
 YES; OFF COURSE

 Economics related to topics in AL-Quran

 Interest/riba/usury
 Bribery
 Production/consumption of harmful goods/ services
 Shortage in weight: surah Al-tatfeef/mutaffifeen-1-9 verses/
al-Rahman
 Justice
 Do not capture the wealth of other people illegally
 Halal income 18
 Hadith
 Speech; deeds; consents of holy Prophet Muhammad S.A. related
to Islamic shariah
 Hadith books:
 Bukhari
 Muslim

 Tirmizi

 Abu dawood

 Nasayee

 Ibn Mazah

 Muatta-Imam Malek

 Musnade Ahmad-Imam Ahmad

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 Why will we follow Hadith?
 Details
discussion of Islamic law related to life.
 Economics related topics
 all types


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 Ijma: consensus of contemporary Islamic scholar

Example: credit card: buy; withdraw cash

credit card: halal/haram?
Ans: is it from interest-based bank or Islamic bank?
Credit card: Halal from Islamic bank; Haram from interest-
based bank

 Qiyas: research outcome/Ijtihaad

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ISLAMIC ECONOMI THOUGHT/HISTORY
 Islamic Economics (6th -14th Century):
  

 Begun: The practice of Islamic Economics was begun in the

state of Medina in the 6th century.
  

 Contributors: After that, the process of Development of this

discipline was handled by the different scholars and
Economists in different centuries. many of them were Abu
Yusuf (731-798), Al Farabi (873-950), Al Ghazali (1058-
1111), Al mawaridi (1675-1158), Nasir Al-Din Al-Tusi
(1201-1274), Ibn Taymiyyah (1263-1328), Ibn Khaldun
(1334-1406) History of the World (Kitab al-Ibar), Asaad 22
Davani (1444).
 Defects of Capitalism:
 Tellinga lie
 Cheating; fraud; deception
 False oath; no care about honesty
 Gambling/game of chance: casino
 Haram : alcoholic product
 Adulteration
 Separation of religion from daily/economic life
 No Govt. interfere

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 Defects of Communism:
 A group of people always control the state and wealth of the
country
 No Hereafter life- creates dishonesty
 Only worldly life- why will you be an honest person?
 State fix the price-not justice/ not fair

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 ASSUMPTIONS:
M.A.HAMID: 24 PAGE
 Belief in
 Islamic Shariah-unchanged laws of islam
 Fiqh-research based laws
 Allah’s sovereignty
 All power belongs to Allah
 Islamiceconomic man
 Dual accountability
 Worldly+hereafter and Family+society
 Equal human dignity
 All human being are equal
 Only one standard: Taqwa

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IMPORTANCE OF ISLAMIC ECONOMICS
 Bridging the missing link of conventional economics
 Rationalism: past experience + present knowledge +
forecasting
 Defects

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 Resolving the crisis and conflicts
 Economic crisis
 Financial crisis-10taka share-1000 taka-1930 USA
 Great depression

 Global financial crisis: 2007-2012: land price-1 lac land-50 lac dollar

 350 bank shut down

 World bank: Islamic finance dept.

 Conflicts-war
 Economic cause
 Iraq-oil; Libya-18%; afghanistan ; african muslim –diamond mines-

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 Ideological obligation
 To establish the superiority of islam by ensuring the welfare of consumer.
 Effective cooperation among muslim countries
 10% of world GDP
 Natural resources: 40% of world
 Mineral resources:70% of world
 Inactive OIC-57 countries

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Thank you very Much

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