Showing posts with label Economic System in Islam. Show all posts
Showing posts with label Economic System in Islam. Show all posts

Friday, March 18, 2011

How Islamic Union Will Affect the Economic Development

Contemporary world politics make it necessary for nations to integrate into international unions in the interest of their own national security and economy. In these international unions, which are usually based upon geographic location, such factors as natural resources, trading blocs, and even cultural values play an important role. Many neighboring countries combine their resources under the auspices of such organizations, create defensive alliances, and cooperate on a wide array of issues. The goal of such unions is to preserve peace, control the arms race, resolve disputes through diplomacy, promote socioeconomic development, and protect fundamental human rights and democracy. At the present time, NATO, the OSCE, the EU, NAFTA, OPEC, ASEAN, the G-8, the D-8, and APEC are the foremost international political, military, and economic unions.
These institutions are subject to organizational reforms because of new members or a widening of scope. All of these organizations, formed in the aftermath of the Second World War, have contributed to creating stability and order in the world and have played a major role in global socioeconomic development. Member nations protect their economic and military interests, and also acquire a stronger regional and international position. Even the developed world perceives the necessity of such partnerships. The creation of free trade zones, regional trade agreements, abolished customs controls, and even a common currency (as in the EU) safeguard the future of member states. Defensive pacts enable member states to reduce military expenditures and to divert those resources to cultural and educational fields.
A similar organization will provide considerable benefits to Muslim nations. For those that are desperate for technological as well as economic development, the foremost step toward stability is the creation of a central organization or, in other words, a unified Islamic world under the auspices of the Islamic Union.
Economic Development and Increasing Prosperity
Economic cooperation is necessary on two counts: stability and development. Muslim nations must bring stability and solidity to their economies. Developing industries and making the required investments is vital, as is the need for a comprehensive development plan and the simultaneous development of education, economy, culture, science, and technology. While various sectors are developed technologically, the labor force's educational levels and standards must be raised accordingly. Society must be motivated to become more productive, and the resulting economic cooperation will play a major role in eradicating poverty, illiteracy, the unjust distribution of wealth, and other socioeconomic problems rampant in Muslim countries. This partnership can be formed only by the creation of free trade zones, customs unions, and common economic areas.
Most Muslim countries have geostrategic importance as well as rich natural resources (e.g., natural gas and crude oil). These resources and strategic opportunities, however, are not being used effectively. In the Islamic world, 86% of the population's living standards fall below $2,000, 76% under $1,000, and 67% under $500 per year. When the Islamic world's total resources are considered,(1) this is quite a paradox: Roughly half of the petrol consumed in the West is exported from the Islamic world, as is 40% of the world's agricultural production.(2) Many economists and strategists freely admit that the world economy depends upon the Islamic world's oil and gas exports, in particular those of the Persian Gulf.(3)
The Persian Gulf holds two-thirds of the planet's discovered crude oil reserves. Data obtained from research concludes that Saudi Arabia alone holds 25.4% of the world's oil reserves, or 262 billion barrels. A further 11% is found in Iraq, 9.6 % in the UAE, 9.2 % in Kuwait, 8.6 % in Iran, 13% in other OPEC member states. The rest is distributed across the remainder of the world.(4) Research commissioned by the U.S. Department of Energy shows that between 2000 and 2020, oil exports from the area will increase by 125%.(5) This means that the world will continue to meet most of its energy needs by imports from the Gulf region. Moreover, the Middle East has 40% of the global natural gas reserves; 35 % of these reserves are in the Gulf region.(6) Algeria, Libya, and other North African countries have 3.7 % of the world's reserves.
The Caucasus and Central Asia are also rich in oil, natural gas, and other natural resources. For instance, Kazakhstan has between 10-17.6 billion barrels of proven oil reserves, and its natural gas reserves are estimated at between 53 and 83 trillion cubic feet. Turkmenistan hasbetween 98 and 155 trillion cubic feet of natural gas reserves, making it the fourth largest producer.(7) Some other Muslim countries have valuable mineral resources. For instance, Uzbekistan and Kyrgyzstan are two of the world's leading gold producers. Turkey has one of the world's richest boron reserves, only recently discovered to be very important, and Tajikistan has the world's largest aluminum producing facilities.
These advantages will become more important in the twenty-first century, which some have already christened the "energy century." Energy is an essential element of modern society in terms of the military, industry, urbanization, and transport. Given that economic activity and manufacturing depend primarily upon energy, nations will do their best to achieve control over these energy resources. The Islamic world is not using its resources effectively, for many of its members lack the infrastructure and technology to increase the production and use their natural resources to develop their industries. Therefore, the resources' contributions to the country's economy are limited to export earnings. These countries do not have the means to process their own crude oil, use it in their industrial complexes, or to develop their industries. Worse still, some Muslim nations do not even have the necessary means to explore and research their natural resources or to discover and extract them. Explorations undertaken by foreign companies reveal that other Muslim nations have oil and gas reserves, but they cannot benefit from their resources.
Naturally, the ineffective use of natural resources is not the Islamic world's only economic problem. However, solving this problem can begin the process of solving many other problems. The economies of Muslim nations contain differences in structure and functioning. Some nations' economies depend upon mineral resources, such as the members of OPEC, while other nations' depend upon agriculture. These differences are also reflected, to some extent, in their social structures, such as the widely varying degrees of rural and urban populations. Developing complementary relationships and helping each other in their respective areas of expertise can turn these differences into a source of riches. All of this will be possible with the Islamic Union.
Joint ventures and project partnerships will be an important step in the right direction, for they will enable countries to benefit from one another's experiences and the income earned from investment projects will benefit all of the participating countries. Such mutual financial support is compatible with Islamic morality, for helping the needy and having a sense of social responsibility are important characteristics that Muslims strive to acquire. Many verses in the Qur’an remind Muslims to watch over the needy.
Society's internal cohesion must be extended to international relations. As international cooperation within a partnership cannot be one-sided, employment and income levels will rise in both countries. For example, one country will produce oil and another one will process it, and agriculturally dependent countries will be able to import the food they need from agriculturally developed countries. A manpower-poor country’s need will be met by another Islamic country, while rich countries will be able to invest in and help out a manpower-rich country that does not have enough jobs for its people. This will be to the benefit of both. Sharing know-how and experience will increase prosperity, and all Muslims will benefit from technological developments.

Joint ventures that realize the Islamic world's unification of opportunities and means will enable
Muslims to produce hi-tech products. The Islamic common market will enable Muslim-made products to be marketed in other Muslim countries without the hindrance of customs, quotas, and other cross-border obstacles. The marketplace will grow, the market share and exports of all Muslim nations will rise, industrialization will speed up, and economic development will bring progress in technology. The living standards and wealth of Muslim nations will increase, and their existing inequalities will disappear. Some free trade agreements are already in place between countries in the Gulf, the Pacific Rim, and North Africa. Trade agreements signed by Turkey are already operational in the Islamic world. Bilateral cooperation exists in some regions; however, their scope must be widened. Such cooperation will safeguard the rights and interests of all Muslim nations and lead to all of them becoming developed—a result from which all of them will derive a far greater benefit than if they do not cooperate with each other.
All of these can be realized only under a central authority's leadership and coordination. Achieving this will be possible if Muslim nations adopt the Qur'an's values and the Prophet's (May God bless him and grant him peace) Sunnah, or, in other words, if they adopt Islamic culture. The Islamic Union must lead the way to this cultural awakening, as well as the resulting political and economic cooperation.

Mutual cooperation among Muslims, part of the Islamic code, must be adhered to by all Muslims, for God commands people to refrain from avarice and to guard the needy and support one another. In fact, destitute people have a due share of the believers' wealth (Qur'an, 51:19). As the Qur'an proclaims:

Those of you possessing affluence and ample wealth should not make oaths that they will not give to their relatives, the very poor, and those who have migrated in the way of God. Rather, they should pardon and overlook. Would you not love God to forgive you? God is Ever-Forgiving, Most Merciful. (Qur'an, 24:22)
He who has plenty should spend from his plenty, but he whose provision is restricted should spend from what God has given him. God does not demand from anyone more than He has given it. God will appoint ease after difficulty. (Qur'an, 65:7)
Our Lord also reveals that believers are one another's guardians (Qur'an, 9:71). The word "guardian" conveys such meanings as friend, helper, mentor, and protector. It also expresses the importance of cooperation and solidarity between Muslim nations. The cooperation that will arise from this fraternal awareness between Muslim nations will bring prosperity and wealth to Muslims and eradicate poverty, an important problem of the Islamic world. Societies that follow the Qur'an's values will not experience famine, destitution, and poverty. Muslims will develop their nations by following rational and long-term policies, establishing good relations with other nations and people, valuing trade and development, and learning from other cultures' experiences. This was so in history and, God willing, under the Islamic Union's leadership it will be so once again.


Author: Harun Yahya

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Tuesday, February 8, 2011

The Economic Structure in Islam: Poverty and Riches Abolished

The economic structure of the Islamic Umma, as is in the political and in the social structures, is based entirely on the man-God relationship. It is based on belief in God who provides mankind with their sources of sustenance and wealth and seeking the favour of God in order to attain the felicity in the hereafter.
The Qur'an informs us of the principle of economy in Islam:
‘And seek the abode of the Hereafter in that which God has given you, but do not neglect your portion of this world, and be you kind as God has been kind to you, but do not seek corruption on earth. Verily, God does not love corrupters.' 28: 77
Wealth and possessions are described as test and trial:
‘Assuredly you will be tried in your property and persons.' 3: 186
Humans are described as lovers of wealth:
‘And you love wealth with inordinate love.' 84: 20
The general idea of ownership in Islam is that God has bestowed it as a favour on whomever He pleases.
By doing so God has raised people in ranks according to their portions and their response to the message where they will be awarded in ranks according to their deeds in the hereafter:
‘Is it they who apportion your Lord's mercy (wealth)? It is We who have apportioned among them their livelihood in the life of (this) world, and raised some of hem above the others in rank that some of them may take labour from others; and the mercy of your Lord is better than (the wealth) that they amass.' 43: 32
‘See how We preferred some of them above others, and verily the hereafter will be greater in degrees and greater in preferment.' 17: 21
The main principles of the economic structure in Islam which the Islamic Umma ought to apply are:
a. Distribution of wealth among Muslims in a welfare community.
b. Expenditure in the way of God.
c. Middle way expenditure.
d. Forbidden income.
e. Platform-ceiling formula where poverty and riches abolished.
This schema ensures justice, equality and creates a pltafrom-ceiling formula where both poverty and riches are abolished for circulation of wealth among the totality of Muslims is an incumbent right.

Author: Mardini

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Thursday, January 6, 2011

Sources of wealth: Fulfilling Engagements

Sources of wealth in Islam are defined in the Qur'an and Hadith. Man is totally responsible for the way he chooses to exploit his wealth.
These sources are:
A. Natural sources.
B. Exchange of commodities.
C. Work for a salary.
D. Inheritance.
E. Wealth given or shared by Muslims.
God provides
According to the Qur'an, everything is provided by God. God has created mankind and He has provided them with their means of subsistence:
‘And the earth We have spread out; set thereon mountains and produced therein all kinds of things in due balance and proportion. And We have had provided therein means of subsistence: for you and for whose sustenance you are not responsible.' 15: 19-20
‘Is it they who would portion out the Mercy of your Lord? It is We who portion out between them their livelihood in the life of this world.' 43: 32
Employment
Employment in Islam is part of the socio-economic structure:
‘And We raise some of them above others in ranks, so that some may employ others for work. But the Mercy of your Lord is better than the wealth they amass.' 43: 32
The conditions of employment are well specified in the Tradition. The Qur'an specifies conditions of employment in the following example of Moses:
‘Said one of the (girls): "O father, engage him on wages: truly the best of men for you to employ is the man who is strong and trustworthy."' 28: 26
Moses was proposed the following contract:
‘He said: "I intend to wed of these my daughters to you, on condition that you serve me for eight years; but if you complete ten years, it will be (grace) from you. But I do not intend to place you under a difficulty. And you will find me, God willing, one of the righteous."' 28: 27
Moses agreed to the conditions of his contract:
‘He (Moses) said: "Be that (agreement) between me and you: Whichever of the two terms I fulfil let there be no ill-will to me. And God is a witness to what we say."' 28: 28
Moses has fulfilled the terms before he was charged with the divine Message:
‘Then when Moses had fulfilled the term, and was travelling with his house folk, he saw in the distance a fire.' 28: 29
Muslims are commanded to fulfil their contracts:
‘And fulfil (every) engagement, for (every) engagement will be enquired into (on the Day of Judgement).' 17: 35
Any engagement, whether commercial or non-commercial, must be fulfilled by Muslims, as part of the Muslims' covenant with God, since God becomes the Witness for the engagement or contract.


Author: Mardini

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Saturday, January 1, 2011

Exchanging this Life for the Hereafter

The Islamic precept in economic action is that God bestows wealth and man must use it in the way of God while not forgetting his portion of it in the worldly life.
In a Muslim community hoarding and monopolizing of wealth are considered wrong doing and are forbidden.
Muslims ought to spend of their wealth in charity and must keep circulating wealth among the entire members of the Ummah through work. This abolishes accumulation of riches and monopoly of wealth and abolishes poverty.
This creates a platform-ceiling modus operandi over which no wealth accumulation is permitted and no poverty of Muslims is permitted.
It is a struggle between material benefit and spiritual aspiration. Natural tension between the two is admitted in the Qur'an. The idea of freedom of choice between the two is offered. Man's choice is based on the divine promise.
For those who chose not to believe in God worldly life becomes the only alternative. For those who chose the other world they must work for their choice.
It is a matter of choice by weighing odds against one other.
The Qur'an advances this free and responsible choice:
‘Some of you desire (this) world, and some of you desire the Hereafter.' Chapter 3: 152
According to one's choice the individual is given what he desires with the subsequent consequences:
‘Whoso desires the life of the world and its pomp, We shall repay them their deeds therein, and therein they will not be wronged. Those are they for whom is naught in the Hereafter save Fire.' 11: 15-16
‘Whoso desires the harvest of the Hereafter, We give him increase in its harvest. And whoso desires the harvest of (this) world, We give him thereof, and he has no portion in the Hereafter.' 42: 20
‘Whoso desires that (life) which hastens away, we hasten for him therein what We will for whom We please. And afterward We have appointed for him hell; he will endure the heat thereof, condemned, rejected. And whoso desires the Hereafter and strives for it with the effort necessary, being a believer; for such: Their effort finds favour (with their Lord).' 17: 18-19

Author: Mardini

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