Entrepreneurship as a means to create islamic economy

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Entrepreneurship as a means to create islamic economy presented to 6th Muslim World Conference, Bangkok 22nd May 2013

Entrepreneurship as a means to create islamic economy presented to 6th Muslim World Conference, Bangkok 22nd May 2013

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  • 1. Entrepreneurship as a means tocreate Islamic EconomyMohd. Murray HunterUniversity Malaysia Perlis (Unimap)Paper presented to the 6th Annual Muslin World Conference,Chowpraya Park Hotel, Bangkok, Thailand, 22nd May 2013.
  • 2. • Current Global and Regional Situation ofthe Ummah• Not Just Education – the right educationneeded to “make a difference”• The Islamic “entrepreneurship model “& western ethics converging with Islamicprinciples• Applying and implementing the model todevelop Islamic economy• Conclusion
  • 3. Current Global and RegionalSituation of the Ummah
  • 4. The World Ummah represents thebottom 20% of the World’s populationin socio-economic terms. Opportunityis an aversion to most.
  • 5. Selected statistics from a number of Islamic countiesCountry Population Muslims as%Population%UrbanizationUnemployment(15-24) (%)Poverty(%)GDP Per-capita(USD)GDP Per-capitaWorldrankingAfghanistan 31,108.077 99% 23% 36% (adult) 36% $1,000 219Algeria 38,087,812 99% 66% 21.5% 23% $7,500 137Azerbaijan 9,590,159 93.4% 52% 14.7% 11% $10,700 90Bangladesh 163,654,860 89.5% 28% 9.3% 31.5% $2,000 192Burkina Faso 17,812,961 60.5% 26% 3.8% 46.7% $1,400 206Chad 11,193,452 53.1% 28% - 80% $2,000 194Egypt 85,294,388 90% 43.4% 24.8% 20% $6,600 138Eritrea 6,233,682 80% 22% - 50% $800 223Gambia 1,883,051 90% 58% - 48.4% $1,900 178Guinea 11,176,026 85% 35% - 47% $1,100 215Indonesia 251,160,124 86.1% 44% 22.2% 11.7% $5,000 157Iran 79,853,900 98% 71% 23% 18.7% $13,100 101Iraq 31,858,481 97% 66% 16% (adult) 25% $4,600 162Kazakhstan 17,736,896 70.2% 59% 4.6% 5.3% $13,900 96Kyrgyzstan 5,548,042 75% 35% 14.6% 33.7% $2,400 185
  • 6. Country Population Muslims as% Population%UrbanizationUnemployment(15-24) (%)Poverty(%)GDP Per-capita(USD)GDP Per-capitaWorldrankingLibya6,002,347 97% 78% 30% (adult) (33%) $13,300 98Malaysia 26,628,392 60.4% 72% 11.3% 3.2% $16,900 79Mali 15,968,882 94.8% 36% 30% (adult) 36.1% $1,100 214Mauritania 3,437,610 100% 41% 30% (adult) 40% $2,100 191Morocco 32,649,130 99% 58% 17.9% 15% $5,300 153Niger 16,899,327 80% 175 3.2% 63% $900 220Nigeria 174,507,539 50% 50% $2,700 180Pakistan 193,238,868 96.4% 36% 23.9% (adult) 70% $2,900 179Saudi Arabia 26,939,583 100% 82% 28.2% - $25,700 59Somalia 10,251,568 100% 37% - - $600 227Sudan 34,857,910 97% 40% 20% (adult) 48.5% $2,400 184Tajikistan 7,910,041 90% 26% $2,200 190Turkmenistan 5,113,040 89% 50% 60% (adult) 30% $8,500 127Uzbekistan 28,661.637 88% 36% 2.5% (adult) 39.6% $3,500 168WesternSahara538,811 100% 82% - - $2,500 183Yemen 25,408,288 100% 32% $2,200 189
  • 7. True Empowerment only comes fromeconomic development rather thanpolitical meansThe Kadazan/Dusun People in Sabah, Borneo
  • 8. December 26 2004More than180,000Indonesians arekilled and over600,000 listedas missing andhomeless after amassive underseaearthquake offSumatra triggersa series oftsunami
  • 9. February 21 2005:A landslidesweeps throughtwo West Javavillages near agarbage dump onthe outskirtsofBandung, killing 96 people
  • 10. March 28, 2005:More than 900people arekilled after aquake ofmagnitude 8.7hits Nias on thecoast ofnorthernSumatra. Around500 more areinjured and2,000 lefthomeless
  • 11. July 20, 2005:Indonesiaconfirms itsfirst deathsfrom bird flu.Tests on afather and histwo youngdaughters, wholived inTangerang on theoutskirts ofJakarta, showthey contractedthe killer virus
  • 12. Sept 2005 –February2006 Morethan 200peoplekilled inFlashfloods andLandslides
  • 13. January2007More thanfivehundredpeopledie inferrydisaster
  • 14. February 2007 –Heavy rainscause majorflooding inJakarta morethan 50 peopledie over300,000 haveto move fromtheir homes
  • 15. December 2007/January 2008Floods and mud-slides inCentral Java leave 130+ dead,thousands homeless
  • 16. The Major Blocks to Development• The current “psych” of farmers• Growing rural unemployment• Unbalanced affluence (town-rural)The Probable Causes
  • 17. Lack of IdeasLack of education and skillsNarrow mindsetFeeling of powerlessness – lack ofaccess to marketsLack of resourcesLack of will
  • 18. Economic, social, and spiritualPoverty is contributing toignorance, anti-social behaviour,Crime, apathy, amorality, andeven terrorism
  • 19. The World is progressing with theexception of the majority of theUmmah
  • 20. Not Just Education – the right educationneeded to “make a difference”
  • 21. The questionhereis whatknowledgeand educationis mostvaluableto the Ummah?
  • 22. Tissue Culture
  • 23. Organic (Halal) Farming
  • 24. Diversified Halal FarmsFarmers’ marketsCOOP MarketHome DeliveryGerai DeliveryRestaurant & Hotel DeliveryMany smallsuppliers thatare customerorientated
  • 25. Existing Thai Organic Products
  • 26. Organic HerbicidesProduct Reported Results*Control ORound UpPro[i]10All-DownOrganic[ii]Range 0.5 – 3.8[i] Registered Trademark of Monsanto.[ii] http://alldownherbicide.com/BeforeAfter
  • 27. Swiftlet Farming3 Ft3 Ft6 Feet5Feet9Feet23FeetEnd View14Feet8Feet1Ft9Feet23FeetSideViewTopView(Reinforcements)By developing novel applications of technology
  • 28. Pharmaceuticals
  • 29. Organic Agro-Chemicals
  • 30. Communityentrepreneurshipdevelopmentshould be projectand mentor based.
  • 31. The Islamic “entrepreneurship model “& western ethics converging with Islamicprinciples
  • 32. Need for an Islamic ModelThe nature of manThe amoral societyThe underdevelopment ofIslamic societies
  • 33. Al ‘Qu’ran is presented in a businessparadigm and all of Islam’s prophetswere entrepreneurs in their own right.
  • 34. Islam Espouses a Market Economy“He who brings goods to the market is blessedwith bounty,he who withholds them is cursed.”(Ibn Majah & Al Hakim)
  • 35. A Market Mechanism Is Espoused“Do not chase after those whoare going to the market beforethey reach the place.”(Al-Bukhari & Muslim)
  • 36. Islam also prohibits price manipulation“Anyone who withholds goods untilthe price rises is a sinner.”(Muslim).
  • 37. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah Ummah
  • 38. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahFaith in one God and a commitment in the teachingsrevealed by God and His Messengers. Iman affects ourworld view and daily practices.
  • 39. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahKnowledge. Three sources based on Iman, a) intellect(‘aql), experiences and revelations (wahy). Guided byIman.
  • 40. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahWork and deeds, pious practice, orientated to Allah, turningaway from all weakness and evil. Amal is based and guided byIman and Ilmu.
  • 41. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahAn individual’s obligation toperform one’s religious duties.
  • 42. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahA collective responsibility for both social andspiritual development
  • 43. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahA holistic life where one looks after worldlycomforts and also prepare for the hereafter.
  • 44. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahThe path shown by Allah (SWT). The divine law.
  • 45. Toyyibaan & Halal• This day are (all) things good and pure made lawfulunto you. The food of the people of the Book islawful unto you and yours is lawful unto them. … Ifanyone rejects Faith, fruitless is his work, and in theHereafter he will be in the ranks of those who havelost (all spiritual good).Al-Ma’idah 5:5
  • 46. • O you people! Eat of what is on earth, lawfuland good; and do not follow the footsteps ofthe evil one, for he is to you an avowedenemy.Al-Baqarah 2:168
  • 47. • From the land that is clean and good, by theWill of its Cherisher, springs upproduce, (rich) after its kind; but from theland that is bad, springs up nothing but thatwhich is niggardly: thus do we explain theSigns by various (symbols) to those who aregrateful.Al-A’raf 7:58
  • 48. • O ye who believe! Eat of the good things thatWe have provided for you, and be grateful toGod, if it is Him ye worship.Al-Baqarah 2:172
  • 49. Haram(Those things prohibited byAllah in the Al Qu’ran)HACCPGMPSustainableenvironment, community& businessCommunityBenefitToyyibaanCleanHealthyNon-exploitiveTraceableSupplyChainEthical
  • 50. Haram(Those things prohibited byAllah in the Al Qu’ran)HACCPGMPSustainableenvironment, community& businessCommunityBenefitToyyibaanCleanHealthyNon-exploitiveTraceableSupplyChainEthicalPermitted by Allah in theAl-Qur’an
  • 51. Haram(Those things prohibited byAllah in the Al Qu’ran)HACCPGMPSustainableenvironment, community& businessCommunityBenefitToyyibaanCleanHealthyNon-exploitiveTraceableSupplyChainEthicalProhibited byAllah in the Al-Qur’an
  • 52. Haram(Those things prohibited byAllah in the Al Qu’ran)HACCPGMPSustainableenvironment, community& businessCommunityBenefitToyyibaanCleanHealthyNon-exploitiveTraceableSupplyChainEthicalSubstances and deeds that are good, healthy, pure,clean and lawful.
  • 53. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahA business partnership;a) Shirkah: where twoor more individuals pool financial resourcesand share profit and loss on an agreed ratioand held liable to the extent of theircapital,b) Syari’ah: each partner is able tooperate other businesses, independent ofthe principal businessc)Mudarabah:Partnership where one managesthe partnership and another supplies thefinancial resources.
  • 54. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahPiety
  • 55. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahWorship. Relates man to Allahthrough spiritual acts. Themanifestation of Amal salih (piousactions).
  • 56. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahMutual consent
  • 57. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahRecognition of the right and proper place and station,condition in life and to self discipline in positive andwilling participation in enacting one’s role inaccordance with that recognition andacknowledgement. Its occurrence in one and society asa whole reflects the condition of justice.
  • 58. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahTrust by God in man in the all encompassingconcept of nature (tabi’ah)
  • 59. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahIslamic community
  • 60. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahThe concept of Al-Falah requires Muslimsto win and be successful in both this worldand the hereafter.
  • 61. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahInclination towards destruction
  • 62. TawhidAl-Iman Syar’iah Ad-DinFard’ainFard’ KifayahAl-IlmAl-AmalShu’raAdabHalal ToyyibaanMusharakah Ibadah Al-Ta’awunAl-Fasad Amanah Al-Fatah UmmahA relationship withAllah which excludes a relationship with anyoneelse.The focus of all man’s reverence and gratitude,the only source of value, where whatAllah desires for man becomes value to him.Man who commits his will to Allah,recognises no other authority other than His.Comprises Iman, Ilmu and Amal.
  • 63. •Be proactive as this will develop the ability to control one’s environment,rather than be controlled by it, as is generally the case.•Begin tasks with the end result in mind, avoid distractionsand concentrate only on relevant activities,which will make you much more productive,•Organise correctly and undertake the mostimportant tasks first in a step by step approach,•Look for win-win strategies so that all benefit,•Listen to people first and understand them before youtry to make them understand you, which will assist inmaintaining positive relationships with people,•Look to develop synergy between people which willdevelop a better outcome, greater than what individualscan achieve working by themselves, and•Continually seek self-renewal, spiritually, mentally,emotionally, socially and physically.
  • 64. Overseas Halal Food Product
  • 65. Organic Farming ConceptFrom the soil to marketFood Miles – Local Community
  • 66. Aveda The Body Shop ThursdayPlantationHPA Malaysia Hain CelestialGroupEst. Sales USD120million(1996)[i]USD619mil (2006)USD1.5Billion(2006)[ii]USD85Million(2006)[iii]USD40Mil[iv] USD738Mil[v](2006)Location USA UK Australia Malaysia USAEstablished 1978 1976 1976 1999 1926Products Personal Care Personal Care Personal Care Herbs Organic foodand cosmeticsBasic Philosophy To sustain theenvironment andgive back tocommunitiesSocialhumanitarianismactivism on manyissuesNatural teatreeproducts/natural medicinesHalal &ToyyibaanFree of artificialingredients,Kosher foodsEthics YesGreen Yes Yes YesNatural Yes Yes Yes YesOrganic Yes Yes YesCommunity Yes Yes YesCulturalReligious/Spiritual Yes YesMode of Distribution DirectMarketing/SalonRetail and e-CommerceDirect andthroughdistributorsDirectMarketingGeneraldistributionOwner Estée LauderCompanies Inc.Loreal Chris Dean &FamilyPrivateOwnershipListed company
  • 67. Applying and implementingthe model
  • 68. How to implement• Community Emphasis• Development of a sustainable environment &Ummah• Social equity• Enlightened teaching techniques• mentoring
  • 69. CultureValuesBeliefsAssumptionsLeadershipTheories in actionverses EspousedNorms and groupbehaviourOrganisationallearning (single ordouble loopedProductivity&effectivenessStories, myths, heroes, artifacts, informalbehaviours
  • 70. NegativeAttributesPositiveAttributesDestructionGrowthThe Cultural Dialectic
  • 71. CulturalParadigmPeergroupsmentors,societyChance & FateParadigmPersonalityParadigmStrategicParadigmCreativityParadigmActionParadigmInterpersonalParadigmSkillsParadigmInfluenceonotherparadigmsCommitmentandethicsSocial&EducationalBackgroundIdentifyandexploitopportunitiesResourcegatheringCustomerorientatedSenseofachievementMotivation&determinationAdversitytorisktakingSeek&identifyopportunitiesInnovativeIncontrolofthebusinessAbletoinspirepeopleAbilitytoworkwithpeopleNetworkingExperienceTechnicalskillsSoftskillsTalents&abilitiesHealth,personalenergy,focus,timeorientation,orientationtogettingthingsdone,orientationtowardsgettingtherightthingsdoneLookingforbenefits,effectiveperformance,abletosecureresources,overallvision,abletoweighthingsupinstrategicwayEnvironment,triggers,inspiration,lateral&serialthinking,technicalskills,ideas,opportunities,solutionfindingEnvironment,peers,family,culture,realities,motivation,dedication,selfassurance,selfperception,morality,responsibility,accountability,adversitytorisktaking(courage),standonbeliefs,levelofcomfortSelectingtherightpeople,team/individualorientation,viewofoutsideexpertise,networking,interpersonaloutlooks,managementstyle,leadership,dominance/submissivenessUpbringingandfamilybackground,educationandlifeexperiences,stressfulunexpectedevents,fateSociety&family,peers&rolemodels,assumptions,values,beliefs,learning,mentors,perceptionsPositive&negativeexperiences,success&failure,education&skills,softskills,talentsandabilitiesAttributes of the Entrepreneur
  • 72. CreativitySolutions OpportunitiesIdeasCreativityLateralthinkingSerialThinkingGroupEducationCultureStrategicThinkingPersonalityHunter, Baharuddin (OUM) & Rozhan (UIA): AlphaModel of Innovation
  • 73. The elements of innovationCulture EgoStrategicThinkingInnovationFocusCreativityInterpersonalInteractionsHunter, Baharuddin (OUM) & Rozhan (UIA): AlphaModel of InnovationTempera -mentAbilitySkillsLearning
  • 74. ABCDVisualHolisticIntuitiveInnovativeConceptualImaginativeConservativeStructuredSequentialOrganisedDetailedPlannedInterpersonalKinestheticEmotionalSpiritualSensoryFeelingLogicalFactualCriticalTechnicalAnalyticalQuantitativeNumber CrunchersHuman MachinesAchievement OrientatedPerformance-DrivenAdministratorsBureaucratsProduction-OrientatedTask-DrivenTeachersSocial WorkersFeeling-OrientatedValue-DrivenEntrepreneursExplorersFuture-OrientatedRisk-Driven
  • 75. Positive NegativeInnovate ----------------------------Avoid mistakesThink long term--------------------Live for todaySpend for the future----------------Spend for todayWork as a group------------------- Work by oneselfBe flexible---------------------------Follow rules and normsCollaborate--------------------------CompeteMake joint decisions---------------Make your own decisionsParadigm Change
  • 76. Peer based Education
  • 77. Attribute Small Business Entrepreneurial BusinessRisk Risk is to be avoided by undertaking a businessactivity that is already proven to besuccessful. Therefore business models willnot be novel.Ideas and opportunities are always risks. Everyvillage and every person is unique and willhave different ideas that suit them.Need to Achieve A small business is totally orientated towards afinancial return.Financial return may not be the prime motivator.Individuals and groups may want to producesomething they like and have pride in.Creativity An enterprise will fit into a proven model so notmuch creativity is needed.The enterprise from the first idea may be drivenby many types of creativity, and creativityitself may be a source of satisfaction.Flexibility A small business is a business operated througha disciplined routine in most cases.Individuals and groups may be looking formaximum flexibility in an enterprise, so itcan fit in with their life, rather than theyhave to fit in with the small business.Change Small businesses rely on little environmentalchange for success.Change in the environment may suit individualsand groups as they don’t want to get lockedinto routine, and change prototes theircreativity.Independence Financial independence is the objective. We are already independent and don’t want abusiness to lock us into a strict routine.Foresight A daily, weekly, monthly or seasonal cycle thatis predictable.We may have to keep coming up with new thingsto keep the enterprise going.Initiative There are very tight resources to have muchinitiative.We rely on initiative to keep going, and allinitiatives are considered.Control of destiny The future is controlled by sales in themarketplace.The future is in our hands of what we want to be.Commitment Total commitment. I want to be committed on my terms.Leadership I am the leader and do all tasks. Leadership is defined by tasks.
  • 78. A localized Entrepreneurial Islamic Economy
  • 79. Local University -Research & Outreach Mosque as a communitycentreKnowledge transferSavingscooperativeEntrepreneursEntrepreneurssupplying rawmaterialsLocal marketsLocal goodsmanufactureLocal stores
  • 80. Conclusion
  • 81. Conclusion• Enhance the position of the Ummah accordingto how the Qu’ran prescribes• Entrepreneurship education will direct tacklecommunity problems• Ummah needs focus and leadership in thisarea• Entrepreneurship education is a mostimportant priority for the Ummah
  • 82. An-Nur (24:38)That Allah may reward them according tothe best of their deeds, and add even morefor them out of his grace for Allah does providefor those whom He will, without measure.
  • 83. Al ‘Anabut (29:7)Those who believe and work righteous deeds-from them shall We blot out all evil (that may be)in them, and We shall reward them according tothe best of their deeds.
  • 84. God does not change the conditions ofa people until they change their inner shelvesQur’an 13:11
  • 85. Thank YouLet our noble jihad continue