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Dr Kuran's Islamic Economy

Reader comment on item: Islamic Economics: What Does It Mean?
in response to reader comment: Islamic Economic

Submitted by mohamad halim ben othman (Malaysia), Nov 16, 2009 at 23:03

Dr Kuran's comments could be perceived as either an academician's personal view or a layman's rambling.Considering his background I view it as the former. His comments could also be an invitation for people to provide him with more information. in other words, our good doctor is learning.Otherwise he would not have missed so many facts on Islamic economics; its history and implementations about 1400 years ago He should also be able to differentiate between Islamic economics and Islamic Banking.

If he mentions that Islamic Banking is a new "thing", I will agree with him.On the other hand he will have to agree with me that Islamic Banking is a subactivity within Islamic economics as conventional banking is an activity within the wider scope of conventional economic activities.He will also agree that real Banking in the western world is a relatively new 'activity' ; evolving only about 300 years ago in tandem with the industrial revolution. Banking as we now know is a creature principally invented by the Jewish merchants.(Rothschilds,Soloman Brothers etc )

Banking was nonexistent in nearly the whole 1400 years of Islamic economic activities; the periods of pious Caliphs, Umayads ,Abbasids and Ottoman rules.An activity that is based on money lending and interest/usury as profits have no place in Islam.The situation at that time allowed total banning of such
form of activity because global economy was not dominated by interest based economies and economic powers ,as it is today.

With the collapse of the Ottoman caliphate and with the emergence of the west and USA as world economic and political powers, Muslims and Muslim countries are forced to relate themselves to the new economic order ( or chaos ) and landscape which is in the main, totally based on usury/interest in its financial activity and preponderance of banking in the whole economy..Fully aware of the important role of the institutions of Banks in the mobilisation of funds from surplus sectors to the ones that require them, Islamic Banks emerged not as exact copycats of the ones created by the Jews but modified to suit Islamic tenets and requirements.

Thus, it is not wrong for Dr Kuran to mention that the whole idea of Islamic Banking is a recent phenomenon.The idea by Maududi et al and setting up of Islamically modified institutions that serve to mobilise funds for the ummah is a relatively very recent development.An institution that is moulded to partake in the overall Islamic economic activity ,However , it is a mistake to say that overall acitivity that has been in actual systematic and organised existence some 1400 years ago is something new and more so if it is equated with Islamic Banking.


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