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Islamic Wealth Circulation


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Islamic Wealth Circulation

  2. 2. ISLAM – The Complete Code of Life <ul><li>Islam is not merely a religion but a Deen. </li></ul><ul><li>It provides guidance for all aspects of life. </li></ul><ul><ul><li>Individual life </li></ul></ul><ul><ul><li>Collective life </li></ul></ul>
  3. 3. THE QUESTION OF PROSPERITY <ul><li>Necessity of following the Divine Guidance. </li></ul><ul><li>Allah, the Almighty knows our needs much better than we do. </li></ul><ul><li>The peaceful universe. </li></ul>
  4. 4. CIRCULATION OF WEALTH <ul><li>Active money </li></ul><ul><li>Dead money </li></ul><ul><li>Better the circulation, better the economy </li></ul>
  5. 5. THE POLICY STATEMENT OF ISLAM <ul><li>“ In order that it may not become confined to the rich amongst you”. (Al-Hashr : 7) </li></ul>“ Verily Allah imposes upon them Sadaqah (alms) on their wealth to be taken from the rich and then given to the poor”. (Hadith).
  6. 6. ISLAMIC SOLUTION – THE GOALS <ul><li>Everyone to function according to his ability, aptitude, own choice and liking. </li></ul><ul><li>Everyone to get what is rightfully his. </li></ul><ul><li>Equal participation in profit and loss. </li></ul><ul><li>Wealth to circulate in the society </li></ul><ul><li>Distinction between rich and poor to be narrowed. </li></ul>
  7. 7. PROHIBITION OF INTEREST <ul><li>“ O you who believe! Be afraid of Allah and give up what remains to you from Riba (interest), if you are true believers. But if you do not do so, then take notice of war from Allah and His Messenger”. (Al-Baqara : 278-279). </li></ul>
  8. 8. INTEREST <ul><li>Banking Interest is RIBA </li></ul><ul><ul><li>Source: Federal Shariah Court Judgment 1991. </li></ul></ul><ul><ul><li>Shariah Bench of the Supreme Court Judgment 2000. </li></ul></ul><ul><li>The task ahead – the alternatives </li></ul>
  9. 9. KEYNES ON INTEREST <ul><li>Elimination of unemployment needs extinguishment of interest. </li></ul><ul><li>Inverse relation between interest & savings. </li></ul><ul><li>Interest  Investment  Earnings  Savings. </li></ul><ul><li>Source: Keynes General Theory of Employment, Interest and Money. </li></ul>PAKISTAN 5 16-17 1985 13 5 1965 Savings % Interest % Year
  10. 10. Debt Servicing And Net Transfer – Pakistan Source : Economic Survey Report 1997-98 Government of Pakistan – June 1998 ($ MILLION) -2 -34 2265 2231 1996-97 16 419 2136 2555 1995-96 21 529 2042 2571 1994-95 31 784 1746 2530 1993-94 32 789 1648 2437 1992-93 36 853 1513 2366 1991-92 36 728 1316 2044 1900-91 77 876 259 1135 1974-75 NT AS % OF GROSS DISBURSEMENT NET TRANSFER DEBT SERVICING GROSS DISBURSEMENT YEAR
  11. 11. SWITZERLND (1949-1983) <ul><li>Average Bank Rate: 2.63% </li></ul><ul><li>Highest per capita Income, next to Kuwait & UAE (Special cases). </li></ul><ul><li>Virtual extinction of unemployment – During 70’s the rate was 0.4% when it was 10% in Europe & America. </li></ul><ul><li>Further, the lowest inflation rate in the world. </li></ul><ul><li>Source: World Development Report 1985, by World Bank etc. </li></ul>
  12. 12. OTHER RESTRUCTIONS <ul><li>Hoarding </li></ul><ul><li>Speculation </li></ul><ul><li>Exploitation </li></ul>
  13. 13. <ul><li>Allah destroys Riba and increases Saddaqat. (Al-Baqara:276). </li></ul>And that which you give in usury for increase through the property of (other) people, will have no increase with Allah: but that which you give for charity, seeking the Countenance of Allah, (will increase): it is these who will get a recompense multiplied. (Ar-Rum:39). Zakat
  14. 14. OTHER MEANS <ul><li>U’shr </li></ul><ul><li>Kaffarat </li></ul><ul><li>Sadaqat-ul-Fitr </li></ul><ul><li>Nafaqat </li></ul><ul><li>Wirasat </li></ul><ul><li>Khiraj & Jizyah </li></ul><ul><li>Anfal & Fay </li></ul>
  15. 15. <ul><li>Flow of wealth from the rich to the poor & from the poor to the rich. </li></ul><ul><li>Increased purchasing power. </li></ul><ul><li>Boost in sales. </li></ul><ul><li>Higher volume of production. </li></ul><ul><li>Again – the circulation. </li></ul>The Circulation
  16. 16. <ul><li>Islam – the real solution to our problems. </li></ul><ul><li>The need – the will power to follow it. </li></ul><ul><li>Guarantee of prosperity in this finite life, apart from success in the world hereafter. </li></ul>THE CONCLUSION