Entrepreneurship as a Means to Create an Islamic Economy
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This document summarizes an academic paper presented on entrepreneurship as a means to create an Islamic economy. It discusses the current socioeconomic situation of the global Muslim community, noting that most Muslims represent the bottom 20% economically. It advocates for the right type of education that can empower Muslims and "make a difference". The paper also outlines an Islamic model of entrepreneurship that converges Western ethics with Islamic principles such as permissible and prohibited economic activities. It argues that implementing this model can help develop an Islamic economy.
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Entrepreneurship as a Means to Create an Islamic Economy
- 1. Entrepreneurship as a means to create Islamic Economy Mohd. Murray Hunter University 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 of the Ummah • Not Just Education – the right education needed to “make a difference” • The Islamic “entrepreneurship model “ & western ethics converging with Islamic principles • Applying and implementing the model to develop Islamic economy • Conclusion
- 3. Current Global and Regional Situation of the Ummah
- 4. The World Ummah represents the bottom 20% of the World’s population in socio-economic terms. Opportunity is an aversion to most.
- 6. Selected statistics from a number of Islamic counties Country Population Muslims as % Population % Urbanization Unemployment (15-24) (%) Poverty (%) GDP Per- capita (USD) GDP Per- capita World ranking Afghanistan 31,108.077 99% 23% 36% (adult) 36% $1,000 219 Algeria 38,087,812 99% 66% 21.5% 23% $7,500 137 Azerbaijan 9,590,159 93.4% 52% 14.7% 11% $10,700 90 Bangladesh 163,654,860 89.5% 28% 9.3% 31.5% $2,000 192 Burkina Faso 17,812,961 60.5% 26% 3.8% 46.7% $1,400 206 Chad 11,193,452 53.1% 28% - 80% $2,000 194 Egypt 85,294,388 90% 43.4% 24.8% 20% $6,600 138 Eritrea 6,233,682 80% 22% - 50% $800 223 Gambia 1,883,051 90% 58% - 48.4% $1,900 178 Guinea 11,176,026 85% 35% - 47% $1,100 215 Indonesia 251,160,124 86.1% 44% 22.2% 11.7% $5,000 157 Iran 79,853,900 98% 71% 23% 18.7% $13,100 101 Iraq 31,858,481 97% 66% 16% (adult) 25% $4,600 162 Kazakhstan 17,736,896 70.2% 59% 4.6% 5.3% $13,900 96 Kyrgyzstan 5,548,042 75% 35% 14.6% 33.7% $2,400 185
- 7. Country Population Muslims as % Population % Urbanization Unemployment (15-24) (%) Poverty (%) GDP Per- capita (USD) GDP Per- capita World ranking Libya 6,002,347 97% 78% 30% (adult) (33%) $13,300 98 Malaysia 26,628,392 60.4% 72% 11.3% 3.2% $16,900 79 Mali 15,968,882 94.8% 36% 30% (adult) 36.1% $1,100 214 Mauritania 3,437,610 100% 41% 30% (adult) 40% $2,100 191 Morocco 32,649,130 99% 58% 17.9% 15% $5,300 153 Niger 16,899,327 80% 175 3.2% 63% $900 220 Nigeria 174,507,539 50% 50% $2,700 180 Pakistan 193,238,868 96.4% 36% 23.9% (adult) 70% $2,900 179 Saudi Arabia 26,939,583 100% 82% 28.2% - $25,700 59 Somalia 10,251,568 100% 37% - - $600 227 Sudan 34,857,910 97% 40% 20% (adult) 48.5% $2,400 184 Tajikistan 7,910,041 90% 26% $2,200 190 Turkmenistan 5,113,040 89% 50% 60% (adult) 30% $8,500 127 Uzbekistan 28,661.637 88% 36% 2.5% (adult) 39.6% $3,500 168 Western Sahara 538,811 100% 82% - - $2,500 183 Yemen 25,408,288 100% 32% $2,200 189
- 9. True Empowerment only comes from economic development rather than political means The Kadazan/Dusun People in Sabah, Borneo
- 10. December 26 2004 More than 180,000 Indonesians are killed and over 600,000 listed as missing and homeless after a massive undersea earthquake off Sumatra triggers a series of tsunami
- 11. February 21 2005: A landslide sweeps through two West Java villages near a garbage dump on the outskirts of Bandung, killin g 96 people
- 12. March 28, 2005: More than 900 people are killed after a quake of magnitude 8.7 hits Nias on the coast of northern Sumatra. Around 500 more are injured and 2,000 left homeless
- 13. July 20, 2005: Indonesia confirms its first deaths from bird flu. Tests on a father and his two young daughters, who lived in Tangerang on the outskirts of Jakarta, show they contracted the killer virus
- 14. Sept 2005 – February 2006 More than 200 people killed in Flash floods and Landslides
- 16. February 2007 – Heavy rains cause major flooding in Jakarta more than 50 people die over 300,000 have to move from their homes
- 17. December 2007/January 2008 Floods and mud-slides in Central Java leave 130+ dead, thousands homeless
- 36. The Major Blocks to Development • The current “psych” of farmers • Growing rural unemployment • Unbalanced affluence (town-rural) The Probable Causes
- 37. Lack of Ideas Lack of education and skills Narrow mindset Feeling of powerlessness – lack of access to markets Lack of resources Lack of will
- 38. Economic, social, and spiritual Poverty is contributing to ignorance, anti-social behaviour, Crime, apathy, amorality, and even terrorism
- 39. The World is progressing with the exception of the majority of the Ummah
- 40. Not Just Education – the right education needed to “make a difference”
- 41. The question here is what knowledge and education is most valuable to the Ummah?
- 42. Tissue Culture
- 46. Diversified Halal Farms Farmers’ markets COOP Market Home Delivery Gerai Delivery Restaurant & Hotel Delivery Many small suppliers that are customer orientated
- 47. Existing Thai Organic Products
- 48. Organic Herbicides Product Reported Results* Control O Round Up Pro[i] 10 All-Down Organic[ii] Range 0.5 – 3.8 [i] Registered Trademark of Monsanto. [ii] http://alldownherbicide.com/ Before After
- 49. Swiftlet Farming 3 Ft 3 Ft 6 Feet 5Feet 9Feet 23Feet End View 14Feet 8Feet1Ft 9Feet 23Feet SideView TopView(Reinforcements) By developing novel applications of technology
- 50. Pharmaceuticals
- 58. Community entrepreneurship development should be project and mentor based.
- 59. The Islamic “entrepreneurship model “ & western ethics converging with Islamic principles
- 60. Need for an Islamic Model The nature of man The amoral society The underdevelopment of Islamic societies
- 61. Al ‘Qu’ran is presented in a business paradigm and all of Islam’s prophets were entrepreneurs in their own right.
- 62. Islam Espouses a Market Economy “He who brings goods to the market is blessed with bounty, he who withholds them is cursed.” (Ibn Majah & Al Hakim)
- 63. A Market Mechanism Is Espoused “Do not chase after those who are going to the market before they reach the place.” (Al-Bukhari & Muslim)
- 64. Islam also prohibits price manipulation “Anyone who withholds goods until the price rises is a sinner.” (Muslim).
- 65. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah
- 66. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah Faith in one God and a commitment in the teachings revealed by God and His Messengers. Iman affects our world view and daily practices.
- 67. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah Knowledge. Three sources based on Iman, a) intellect (‘aql), experiences and revelations (wahy). Guided by Iman.
- 68. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah Work and deeds, pious practice, orientated to Allah, turning away from all weakness and evil. Amal is based and guided by Iman and Ilmu.
- 69. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah An individual’s obligation to perform one’s religious duties.
- 70. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah A collective responsibility for both social and spiritual development
- 71. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah A holistic life where one looks after worldly comforts and also prepare for the hereafter.
- 72. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah The path shown by Allah (SWT). The divine law.
- 73. Toyyibaan & Halal • This day are (all) things good and pure made lawful unto you. The food of the people of the Book is lawful unto you and yours is lawful unto them. … If anyone rejects Faith, fruitless is his work, and in the Hereafter he will be in the ranks of those who have lost (all spiritual good). Al-Ma’idah 5:5
- 74. • O you people! Eat of what is on earth, lawful and good; and do not follow the footsteps of the evil one, for he is to you an avowed enemy. Al-Baqarah 2:168
- 75. • From the land that is clean and good, by the Will of its Cherisher, springs up produce, (rich) after its kind; but from the land that is bad, springs up nothing but that which is niggardly: thus do we explain the Signs by various (symbols) to those who are grateful. Al-A’raf 7:58
- 76. • O ye who believe! Eat of the good things that We have provided for you, and be grateful to God, if it is Him ye worship. Al-Baqarah 2:172
- 77. Haram (Those things prohibited by Allah in the Al Qu’ran) HACCP GMP Sustainable environment, community & business Community Benefit Toyyibaan Clean Healthy Non-exploitive Traceable Supply Chain Ethical
- 78. Haram (Those things prohibited by Allah in the Al Qu’ran) HACCP GMP Sustainable environment, community & business Community Benefit Toyyibaan Clean Healthy Non-exploitive Traceable Supply Chain Ethical Permitted by Allah in the Al-Qur’an
- 79. Haram (Those things prohibited by Allah in the Al Qu’ran) HACCP GMP Sustainable environment, community & business Community Benefit Toyyibaan Clean Healthy Non-exploitive Traceable Supply Chain Ethical Prohibited by Allah in the Al- Qur’an
- 80. Haram (Those things prohibited by Allah in the Al Qu’ran) HACCP GMP Sustainable environment, community & business Community Benefit Toyyibaan Clean Healthy Non-exploitive Traceable Supply Chain Ethical Substances and deeds that are good, healthy, pure, clean and lawful.
- 81. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah A business partnership;a) Shirkah: where two or more individuals pool financial resources and share profit and loss on an agreed ratio and held liable to the extent of their capital,b) Syari’ah: each partner is able to operate other businesses, independent of the principal businessc) Mudarabah:Partnership where one manages the partnership and another supplies the financial resources.
- 82. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah Piety
- 83. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah Worship. Relates man to Allah through spiritual acts. The manifestation of Amal salih (pious actions).
- 84. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah Mutual consent
- 85. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah Recognition of the right and proper place and station, condition in life and to self discipline in positive and willing participation in enacting one’s role in accordance with that recognition and acknowledgement. Its occurrence in one and society as a whole reflects the condition of justice.
- 86. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah Trust by God in man in the all encompassing concept of nature (tabi’ah)
- 87. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah Islamic community
- 88. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah The concept of Al-Falah requires Muslims to win and be successful in both this world and the hereafter.
- 89. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah Inclination towards destruction
- 90. Tawhid Al-Iman Syar’iah Ad-Din Fard’ain Fard’ Kifayah Al-Ilm Al-Amal Shu’ra Adab Halal Toyyibaan Musharakah Ibadah Al-Ta’awun Al-Fasad Amanah Al-Fatah Ummah A relationship with Allah which excludes a relationship with anyone else. The focus of all man’s reverence and gratitude, the only source of value, where what Allah 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.
- 94. •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 distractions and concentrate only on relevant activities, which will make you much more productive, •Organise correctly and undertake the most important 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 you try to make them understand you, which will assist in maintaining positive relationships with people, •Look to develop synergy between people which will develop a better outcome, greater than what individuals can achieve working by themselves, and •Continually seek self-renewal, spiritually, mentally, emotionally, socially and physically.
- 96. Overseas Halal Food Product
- 97. Organic Farming Concept From the soil to market Food Miles – Local Community
- 100. Aveda The Body Shop Thursday Plantation HPA Malaysia Hain Celestial Group Est. Sales USD120million (1996)[i] USD619mil (2006) USD1.5Billion (2006)[ii] USD85Million (2006)[iii] USD40Mil[iv] USD738Mil[v] (2006) Location USA UK Australia Malaysia USA Established 1978 1976 1976 1999 1926 Products Personal Care Personal Care Personal Care Herbs Organic food and cosmetics Basic Philosophy To sustain the environment and give back to communities Social humanitarianism activism on many issues Natural tea tree products/natur al medicines Halal & Toyyibaan Free of artificial ingredients, Kosher foods Ethics Yes Green Yes Yes Yes Natural Yes Yes Yes Yes Organic Yes Yes Yes Community Yes Yes Yes Cultural Religious/Spiritual Yes Yes Mode of Distribution Direct Marketing/Salon Retail and e- Commerce Direct and through distributors Direct Marketing General distribution Owner Estée Lauder Companies Inc. Loreal Chris Dean & Family Private Ownership Listed company
- 101. Applying and implementing the model
- 102. How to implement • Community Emphasis • Development of a sustainable environment & Ummah • Social equity • Enlightened teaching techniques • mentoring
- 104. Culture Values Beliefs Assumptions Leadership Theories in action verses Espoused Norms and group behaviour Organisational learning (single or double looped Productivity & effectiveness Stories, myths, heroes, artifacts, informal behaviours
- 107. Creativity Solutions Opportunities Ideas Creativity Lateral thinking Serial Thinking Group Education Culture Strategic Thinking Personality Hunter, Baharuddin (OUM) & Rozhan (UIA): Alpha Model of Innovation
- 108. The elements of innovation Culture Ego Strategic Thinking Innovation Focus Creativity Interpersonal Interactions Hunter, Baharuddin (OUM) & Rozhan (UIA): Alpha Model of Innovation Tempera - ment Ability Skills Learning
- 109. A B C D Visual Holistic Intuitive Innovative Conceptual Imaginative Conservative Structured Sequential Organised Detailed Planned Interpersonal Kinesthetic Emotional Spiritual Sensory Feeling Logical Factual Critical Technical Analytical Quantitative Number Crunchers Human Machines Achievement Orientated Performance-Driven Administrators Bureaucrats Production-Orientated Task-Driven Teachers Social Workers Feeling-Orientated Value-Driven Entrepreneurs Explorers Future-Orientated Risk-Driven
- 110. Positive Negative Innovate ----------------------------Avoid mistakes Think long term--------------------Live for today Spend for the future----------------Spend for today Work as a group------------------- Work by oneself Be flexible---------------------------Follow rules and norms Collaborate--------------------------Compete Make joint decisions---------------Make your own decisions Paradigm Change
- 111. Peer based Education
- 126. Attribute Small Business Entrepreneurial Business Risk Risk is to be avoided by undertaking a business activity that is already proven to be successful. Therefore business models will not be novel. Ideas and opportunities are always risks. Every village and every person is unique and will have different ideas that suit them. Need to Achieve A small business is totally orientated towards a financial return. Financial return may not be the prime motivator. Individuals and groups may want to produce something they like and have pride in. Creativity An enterprise will fit into a proven model so not much creativity is needed. The enterprise from the first idea may be driven by many types of creativity, and creativity itself may be a source of satisfaction. Flexibility A small business is a business operated through a disciplined routine in most cases. Individuals and groups may be looking for maximum flexibility in an enterprise, so it can fit in with their life, rather than they have to fit in with the small business. Change Small businesses rely on little environmental change for success. Change in the environment may suit individuals and groups as they don’t want to get locked into routine, and change prototes their creativity. Independence Financial independence is the objective. We are already independent and don’t want a business to lock us into a strict routine. Foresight A daily, weekly, monthly or seasonal cycle that is predictable. We may have to keep coming up with new things to keep the enterprise going. Initiative There are very tight resources to have much initiative. We rely on initiative to keep going, and all initiatives are considered. Control of destiny The future is controlled by sales in the marketplace. 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.
- 127. A localized Entrepreneurial Islamic Economy
- 135. Local University - Research & Outreach Mosque as a community centre Knowledge transfer Savings cooperative Entrepreneurs Entrepreneurs supplying raw materials Local markets Local goods manufacture Local stores
- 136. Conclusion
- 137. Conclusion • Enhance the position of the Ummah according to how the Qu’ran prescribes • Entrepreneurship education will direct tackle community problems • Ummah needs focus and leadership in this area • Entrepreneurship education is a most important priority for the Ummah
- 138. An-Nur (24:38) That Allah may reward them according to the best of their deeds, and add even more for them out of his grace for Allah does provide for those whom He will, without measure.
- 139. 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 to the best of their deeds.
- 140. God does not change the conditions of a people until they change their inner shelves Qur’an 13:11
- 141. Thank You Let our noble jihad continue