Transcript WHAT IS ISLAMIC ECONOMICS?

THE MAQASID AL-SHARI‘AH AND
THE ROLE OF THE FINANCIAL
SYSTEM IN REALIZING THESE
By
M. UMER CHAPRA
Research Advisor
Islamic Research and Training Institute
Islamic Development Bank
Jeddah, Saudi Arabia
THE PRIMARY OBJECTIVE OT THE
SHARI‘AH


TO BE A BLESSING FOR MANKIND ‫(وما أرسلناك إال رحمة‬
)‫للعلمين‬
THE WORD ‫ عالمين‬INCLUDES EVERYTHING
OTHER THAN GOD




ALL HUMAN BEINGS OR MANKIND, INCLUDING
MUSLIMS AS WELL AS NON-MUSLIMS
ANIMALS, BIRDS AND INSECTS
PHYSICAL ENVIRONMENT
HOW TO BE A BLESSING FOR EVERYONE AND
EVERYTHING INCLUDED IN ‫ ?عالمين‬FOR THIS
PURPOSE WE NEED A VISION AND A STRATEGY
VISION AND STRATEGY


THE ISLAMIC VISION IS DEFINED BY THE
MAQASID AL-SHARI‘AH
THE MAQASID AL-SHARI‘AH ARE,
ACCORDING TO IMAM GHAZALI,
ENRICHMENT OF:
THE HUMAN SELF )
 POSTERITY
)
ALL
WELL-BEING OF
FAITH
 INTELLECT
 WEALTH
STRATEGY



)
)
)
(Nafs)
The human self
Human
development and
well-being
(Blessing for
mankind)
(Māl)
Wealth
(‘Aql)
Intellect
(Nasl)
Posterity
(Dīn)
Faith
‫ وهو أن يحفظ عليهم‬،‫مقصود الشرع من الخلق خمسة‬
،‫دينهم ونفسهم وعقلهم ونسلهم ومالهم‬
،‫فكل ما يتضمن حفظ هذه األصول الخمس فهو مصلحة‬
-139 ‫ ص‬،1‫ ج‬،1937 ،‫ المستصفي‬:‫ ودفعها مصلحة (الغزالي‬،‫وكل ما يفوت هذه األصول فهو مفسدة‬
)140
(AL-GHAZĀLĪ, AL-MUSTASFĀ, 1937, VOL.. 1, PP 139-40; SEE ALSO ALSHĀTIBĪ (D.790/1388), N.D., VOL. 1, P.38 AND VOL. 3, PP.46-7).





THE HUMAN SELF AND POSTERITY

HUMAN BEINGS ARE THE END AS WELL AS
THE MEANS OF DEVELOPMENT



SINCE THEY ARE THE END, THEIR WELL-BEING
(FALAH) MUST BE ENSURED
SINCE THEY ARE ALSO THE MEANS, THEY MUST
HAVE THE MOTIVATION AS WELL AS THE
CHARACTER AND ABILITY TO DO WHATEVER IS
NECESSARY FOR ENSURING THEIR WELL-BEING
THIS DEMANDS: REFORM OF HUMAN
BEINGS (IMPROVEMENT IN THEIR
MOTIVATION AS WELL AS THEIR
CHARACTER AND ABILITY)



HOW TO IMPROVE THEIR MOTIVATION ?
HOW TO IMPROVE THEIR CHARACTER AND ABILITY?
THE THREE OTHER MAQASID ARE INDISPENSABLE
FOR IMPROVING THEIR MOTIVATION, CHARACTER,
AND ABILITY.
FAITH


GIVES THE RIGHT WORLDVIEW
PROVIDES VALUES OR RULES OF
BEHAVIOUR (INSTITUTIONS)




PROVIDES THE RIGHT MOTIVATION
PROVIDES DIRECTION FOR THE CREATION
AND USE OF WEALTH
PROVIDES GUIDELINES FOR PROPER
UPBRINGING AND EDUCATION – MORAL AS
WELL AS MATERIAL
EMPHASIZES THE NEED FOR GOOD
GOVERNANCE
INTELLECT


RELATIONSHIP BETWEEN FAITH AND
INTELLECT
HOW TO ENRICH THE INTELLECT?
THROUGH HIGH QUALITY OF MORAL AS
WELL AS MATERIAL EDUCATION AND AN
ENABLING FAMILY, SOCIAL AND
INTELLECTUAL ENVIRONMENT.
WEALTH AND FINANCE

WITHOUT WEALTH IT WOULD BE
DIFFICULT TO REALIZE THE OTHER FOUR
MAQASID

WEALTH CANNOT, HOWEVER, BE
DEVELOPED



WITHOUT STRENGTHENING THE OTHER FOUR, AND
WITHOUT FINANCE AND ITS PROPER UTILIZATION
FINANCE HAS A CRUCIAL ROLE TO PLAY
IN DEVELOPMENT WITH JUSTICE.

THERE CAN BE NO DIGNITY, BROTHERHOOD AND
FREEDOM:
o
o
IF POVERTY IS NOT REMOVED, NEEDS ARE NOT FULFILLED AND
EQUITABLE DISTRIBUTION OF INCOME AND WEALTH ARE NOT
ENSURED
A SOCIETY CAN BE VERY RICH AND YET HIGHLY UNJUST

THE ROLE OF THE FINANCIAL SYSTEM IN
PROMOTING DEVELOPMENT WITH JUSTICE
•
•
•
ROLE OF THE FINANCIAL SYSTEM: FINANCIAL
INTERMEDIATION - MOBILIZE SAVINGS FROM SAVERS
AND MAKE THEM AVAILABLE TO USERS
PURPOSE? ENSURE DEVELOPMENT AS WELL AS JUSTICE
THROUGH THIS INTERMEDIATION
DEVELOPMENT REQUIRES:




•
IMPROVEMENT IN THE MOTIVATION, CHARACTER AND
MOTIVATION OF HUMAN BEINGS
PROMOTION OF PRODUCTIVE INVESTMENT,
EMPLOYMENT AND DEVELOPMENT
CURBING OF WASTEFUL SPENDING AND CONSPICUOUS
CONSUMPTION
PROMOTION OF VENTURE CAPITAL
JUSTICE REQUIRES:



THE SHARING OF RISK BY BOTH THE FINANCIER AND THE
ENTREPRENEUR: “NO RISK, NO GAIN” – THIS WILL ALSO
HELP INJECT DISCIPLINE INTO THE FINANCIAL SYSTEM
AND HELP PROMOTE THE HEALTH AND STABILITY OF THE
SYSTEM.
PROMOTION OF MICROFINANCE
MORE EFFECTIVE USE OF ZAKAH AND AWQAF

THE PREVAILING ISLAMIC FINANCIAL
SYSTEM




THE ROLES OF :
•
•
•

IS IT IN HARMONY WITH THE MAQASID?
WHAT IS IT THAT PREVENTS THE SYSTEM FROM
BECOMING MORE AUTHENTIC?
NEED FOR INFRASTRUCTURE INSTITUTIONS
THE CENTRAL BANK
THE SHARI‘AH BOARDS
SHARI‘AH AUDIT
CONCLUSION