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Healing Ecology through
Economy
A Post Covid19 Pedagogy, Research and Policy Pivot for
Islamic Finance and Economy
Keynote Speech by Tariqullah Khan, Professor of Islamic Finance,
College of Islamic Studies, Hamad Bin Khalifa University,
Qatar Foundation, Doha
The Post
Covid19
Pivot
for Islamic
Economics
and Finance
Why
How
What
Covid19 Catastrophic
Human Cost
Deepest sympathies with those who suffered
Profound appreciations for the front-line health workers
Global Sudden Stop
Image credit:
https://saylordotorg.g
ithub.io/text_economi
cs-theory-through-
applications/s35-27-
the-circular-flow-of-
income.html
Global GDP Losses
2020: 9 trillion US
dollars i.e 11%
2021: 6 trillion US
dollars i.e 8%
Poverty Projections
Post Covid19 720
million
Pre 560 million
Under extreme
poverty
2021
Souce: https://blogs.worldbank.org/opendata/updated-estimates-impact-covid-19-global-poverty?cid=ECR_TT_worldbank_EN_EXT
Why Pandemics Happen?
Man, in its interaction with the ecology
exceeding natural boundaries
Pandemics are caused by the economic
(monetary & fiscal) policies and systems
“There is a single species that is responsible for the
COVID-19 pandemic - us. As with the climate and
biodiversity crises, recent pandemics are a direct
consequence of human activity – particularly our
global financial and economic systems, based on a
limited paradigm that prizes economic growth at any
cost. We have a small window of opportunity, in
overcoming the challenges of the current crisis, to
avoid sowing the seeds of future ones.”
IPBES Expert Guest Article by Professors Josef Settele, Sandra
Díaz and Eduardo Brondizioand Dr. Peter Daszakon 27 April 2020
https://ipbes.net/covid19stimulus
Pandemics and Monetary and
Fiscal Policy Nexus
Hotelling
Coase
Pigou
Oxford UP 1932
For natural resource not
to be extracted, it must
grow at a rate higher
than interest
Optimal Solution to
Externalities is Bargaining
Revenue from tax can
offset cost of
externalities
Natural
Resource
Interest-based
Financial
Markets &
Institutions
Manmade
Wealth
Ecological Footprint is ignored
Even if there’s ecological footprint
tax revenues will compensate for it
International and National Economic
Policy Pitfalls
Financialization Financial Sector far
exceeding real sector
Global Economy 2017 trillions US dollars
Derivatives 500
trillion $
Financial Assets
300 trillion $
GDP 78 trillion $
Consequences
Waste in land
& water
CO2
emissions
Deforestation
Poaching Poverty Pandemics
Financial
Crises
Disasters
Injustice &
Insecurity
Economy
has
Destroyed
Ecology
Islamic Economics Response
Recognize
the
Problem
Understand Relationship
with Earth
2:30
Viceregency of Allah
Vicegerents of Allah must establish
Universal Balance (Meezan)
َ‫ض‬َ‫و‬َ‫و‬ ‫ا‬َ‫ه‬َ‫ع‬َ‫ف‬َ‫ر‬ َ‫ء‬‫ا‬َ‫م‬َّ‫س‬‫ال‬َ‫و‬ََ ‫ا‬ََ‫ز‬‫ي‬‫م‬‫م‬‫ل‬‫ا‬ َ‫ع‬–
55:7
And the heaven He raised
and imposed the balance.
ََ‫ز‬‫ي‬‫م‬‫م‬‫ل‬‫ا‬ ‫ي‬‫ي‬‫ف‬ ‫ا‬ ‫م‬‫و‬َ‫غ‬‫م‬‫ط‬َ‫ت‬ َّ‫َّل‬َ‫أ‬‫ي‬َ ‫ا‬–
55:8
That you not transgress
within the balance.
Internal equilibrium of
creation - biological,
nutritional, functional etc.,
Life sustaining elements,
capacity and environment
of the planet - air, water,
energy, rotational balance
etc.,
Circularity of nature - water
cycle, oxygen and carbon
cycle, food cycle,
photosynthesis etc.,
Meezan – The Universal Balance
Demographic equilibrium,
families & future generations
Meezan: Ecological Preconditions
Zero Waste
Zero Emissions
Zero Deforestation
Zero Poaching
Zero Riba (Interest)
Zero Foreclosures
Compassion (Rahmah)
Nature
Based
Circular
Economy
What does nature-based mean?
It means nature doesn’t waste
What Do We Need to Do?
Individual
Life Style
Reform
1
The Great Lockdown has given
us an opportunity to practice a
life style of moderation
Scientific Evidences of Healing of Ecology
My
Ecological
Footprint 15 June
https://www.footprintcalculator.org/result1
What Do We Need to Do?
Zero Waste
Zero Emissions
Zero Deforestation
Zero Poaching
Zero Riba (Interest)
Zero Foreclosures
Compassion (Rahmah)
Nature Based
Circular
Impactful
Business
Criteria
2
Will not the nature-based Circular
& impactful business criteria
increase the cost of doing
business?
The Answer is Yes, & to tackle
we need Shared Responsibility
What Do We Need to Do?
Create
Massive
Interest
Free Loans
for SMEs
3
Islamic
Social
Finance
Islamic
Banks
Pay cost of finance
on behalf of
Impactful SMEs
Finance Impactful
SMEs
Impactful SMEs will get cost-free finance
Blend
If cost of finance is 4% $1 million social finance
grant will generate $25 million cost-free financing
Wider Applications
Shared Responsibility
What Do We Need to Do?
Replace
Foreclosure
with
Forbearance
4
When a person becomes
sick the society
collectively takes care
Likewise, when an Impactful
business becomes sick, it
deserves similar treatment
In distress, impactful businesses should receive more patronage
and supervision and support instead of foreclosure
Shared Responsibility
What Do We Need to Do?
Consensus
between 1)
regulators, 2)
social finance
& 3) Islamic
banks
5Policy Support
Impactful
Business
Criteria
Massive
Interest Free
Loans
Forbearance
Transformative
Pedagogy at all
levels of Blooms
Taxonomy &
Educational
Segments
Evaluation
Synthesis
Analysis
Application
Comprehension
Knowledge
New and Most Wanted
Employment Category Economyst
6What Do We Need to Do?
Multidisciplinary
and
interdisciplinary
research at all
hierarchical
levels
Global Level
National Legal & Policy
Support Level
National Best Practice
Standards Level
Knowledge, Information &
Shariah Advisory Level
Product & Service Level
7
What Do We Need to Do?
Adapting technological advancement in all fields
Responsible banking, investment & insurance
Value based intermediation
UN climate finance initiatives
Circular economy transition initiatives
Net zero initiatives
SDGs & ESGs initiatives
Responding &
adapting the
emerging global
initiatives where
relevant
8
What Do We Need to Do?
A new paradigm driven by Ecological concerns is indeed
emerging. The new discipline shall be distanced from the
discipline of Economics and the new profession from the
profession of Economist
Studying Nature-based Economies
To heal Ecology through Economy, join me to
consider taking the first step, and introducing
two new dictionary words:
Economy-cs & Economy-st
Conclusion: PostCovid19 New Suggested
Framework for Islamic Economics &
Finance
Time to Offer Undergraduate, Masters and PhD
Courses
Nature-based Islamic
Ecological/Circular Economy
“Study of the Islamic Economy within
the natural boundaries of Ecology”.
Thanks!
tkhan@hbku.edu.qa
Views expressed are personal

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Healing Ecology through Economy

  • 1. Healing Ecology through Economy A Post Covid19 Pedagogy, Research and Policy Pivot for Islamic Finance and Economy Keynote Speech by Tariqullah Khan, Professor of Islamic Finance, College of Islamic Studies, Hamad Bin Khalifa University, Qatar Foundation, Doha
  • 3. Covid19 Catastrophic Human Cost Deepest sympathies with those who suffered Profound appreciations for the front-line health workers
  • 4. Global Sudden Stop Image credit: https://saylordotorg.g ithub.io/text_economi cs-theory-through- applications/s35-27- the-circular-flow-of- income.html
  • 5. Global GDP Losses 2020: 9 trillion US dollars i.e 11% 2021: 6 trillion US dollars i.e 8%
  • 6. Poverty Projections Post Covid19 720 million Pre 560 million Under extreme poverty 2021 Souce: https://blogs.worldbank.org/opendata/updated-estimates-impact-covid-19-global-poverty?cid=ECR_TT_worldbank_EN_EXT
  • 7. Why Pandemics Happen? Man, in its interaction with the ecology exceeding natural boundaries Pandemics are caused by the economic (monetary & fiscal) policies and systems
  • 8. “There is a single species that is responsible for the COVID-19 pandemic - us. As with the climate and biodiversity crises, recent pandemics are a direct consequence of human activity – particularly our global financial and economic systems, based on a limited paradigm that prizes economic growth at any cost. We have a small window of opportunity, in overcoming the challenges of the current crisis, to avoid sowing the seeds of future ones.” IPBES Expert Guest Article by Professors Josef Settele, Sandra Díaz and Eduardo Brondizioand Dr. Peter Daszakon 27 April 2020 https://ipbes.net/covid19stimulus
  • 9. Pandemics and Monetary and Fiscal Policy Nexus Hotelling Coase Pigou Oxford UP 1932 For natural resource not to be extracted, it must grow at a rate higher than interest Optimal Solution to Externalities is Bargaining Revenue from tax can offset cost of externalities
  • 10. Natural Resource Interest-based Financial Markets & Institutions Manmade Wealth Ecological Footprint is ignored Even if there’s ecological footprint tax revenues will compensate for it International and National Economic Policy Pitfalls
  • 11. Financialization Financial Sector far exceeding real sector Global Economy 2017 trillions US dollars
  • 12. Derivatives 500 trillion $ Financial Assets 300 trillion $ GDP 78 trillion $
  • 13. Consequences Waste in land & water CO2 emissions Deforestation Poaching Poverty Pandemics Financial Crises Disasters Injustice & Insecurity Economy has Destroyed Ecology
  • 16. 2:30 Viceregency of Allah Vicegerents of Allah must establish Universal Balance (Meezan)
  • 17. َ‫ض‬َ‫و‬َ‫و‬ ‫ا‬َ‫ه‬َ‫ع‬َ‫ف‬َ‫ر‬ َ‫ء‬‫ا‬َ‫م‬َّ‫س‬‫ال‬َ‫و‬ََ ‫ا‬ََ‫ز‬‫ي‬‫م‬‫م‬‫ل‬‫ا‬ َ‫ع‬– 55:7 And the heaven He raised and imposed the balance. ََ‫ز‬‫ي‬‫م‬‫م‬‫ل‬‫ا‬ ‫ي‬‫ي‬‫ف‬ ‫ا‬ ‫م‬‫و‬َ‫غ‬‫م‬‫ط‬َ‫ت‬ َّ‫َّل‬َ‫أ‬‫ي‬َ ‫ا‬– 55:8 That you not transgress within the balance. Internal equilibrium of creation - biological, nutritional, functional etc., Life sustaining elements, capacity and environment of the planet - air, water, energy, rotational balance etc., Circularity of nature - water cycle, oxygen and carbon cycle, food cycle, photosynthesis etc., Meezan – The Universal Balance Demographic equilibrium, families & future generations
  • 18. Meezan: Ecological Preconditions Zero Waste Zero Emissions Zero Deforestation Zero Poaching Zero Riba (Interest) Zero Foreclosures Compassion (Rahmah) Nature Based Circular Economy
  • 19. What does nature-based mean? It means nature doesn’t waste
  • 20. What Do We Need to Do? Individual Life Style Reform 1 The Great Lockdown has given us an opportunity to practice a life style of moderation Scientific Evidences of Healing of Ecology My Ecological Footprint 15 June https://www.footprintcalculator.org/result1
  • 21. What Do We Need to Do? Zero Waste Zero Emissions Zero Deforestation Zero Poaching Zero Riba (Interest) Zero Foreclosures Compassion (Rahmah) Nature Based Circular Impactful Business Criteria 2
  • 22. Will not the nature-based Circular & impactful business criteria increase the cost of doing business? The Answer is Yes, & to tackle we need Shared Responsibility
  • 23. What Do We Need to Do? Create Massive Interest Free Loans for SMEs 3 Islamic Social Finance Islamic Banks Pay cost of finance on behalf of Impactful SMEs Finance Impactful SMEs Impactful SMEs will get cost-free finance Blend If cost of finance is 4% $1 million social finance grant will generate $25 million cost-free financing Wider Applications Shared Responsibility
  • 24. What Do We Need to Do? Replace Foreclosure with Forbearance 4 When a person becomes sick the society collectively takes care Likewise, when an Impactful business becomes sick, it deserves similar treatment In distress, impactful businesses should receive more patronage and supervision and support instead of foreclosure Shared Responsibility
  • 25. What Do We Need to Do? Consensus between 1) regulators, 2) social finance & 3) Islamic banks 5Policy Support Impactful Business Criteria Massive Interest Free Loans Forbearance
  • 26.
  • 27. Transformative Pedagogy at all levels of Blooms Taxonomy & Educational Segments Evaluation Synthesis Analysis Application Comprehension Knowledge New and Most Wanted Employment Category Economyst 6What Do We Need to Do?
  • 28. Multidisciplinary and interdisciplinary research at all hierarchical levels Global Level National Legal & Policy Support Level National Best Practice Standards Level Knowledge, Information & Shariah Advisory Level Product & Service Level 7 What Do We Need to Do?
  • 29. Adapting technological advancement in all fields Responsible banking, investment & insurance Value based intermediation UN climate finance initiatives Circular economy transition initiatives Net zero initiatives SDGs & ESGs initiatives Responding & adapting the emerging global initiatives where relevant 8 What Do We Need to Do?
  • 30. A new paradigm driven by Ecological concerns is indeed emerging. The new discipline shall be distanced from the discipline of Economics and the new profession from the profession of Economist Studying Nature-based Economies To heal Ecology through Economy, join me to consider taking the first step, and introducing two new dictionary words: Economy-cs & Economy-st
  • 31. Conclusion: PostCovid19 New Suggested Framework for Islamic Economics & Finance Time to Offer Undergraduate, Masters and PhD Courses Nature-based Islamic Ecological/Circular Economy “Study of the Islamic Economy within the natural boundaries of Ecology”.