Islamic Economies (eBook)

Nafis Alam is currently Professor of Finance at Sunway University Business School, Sunway University. He previously served as an Associate Professor of Finance at the Nottingham University Business School (NUBS) in the University of Nottingham Malaysia Campus (UNMC). He also served as the founding director of Center for Islamic Business and Finance Research at UNMC. Syed Aun R. Rizvi is an Assistant Professor at Suleman Dawood School of Business at Lahore University of Management Sciences (LUMS), Pakistan. He is also a Research Affiliate of Centre for Islamic Business and Finance Research (CIBFR) at University of Nottingham Malaysia Campus, Malaysia, where he previously served in a similar academic role for over two years. He has considerable industry experience in fund management, as well as a diverse teaching and research background. His research focuses on capital markets in Islamic and emerging economies.

Islamic Economies 4
Contents 6
Contributors 8
List of Figures 10
List of Tables 11
1 Islamic Economics’ Contribution to Conventional Economics 12
References 19
2 Islamic Financial Planning Towards Sustainable Eco-Growth 20
2.1 Introduction 21
2.2 Islamic Financial Planning 24
2.2.1 Protection in Islam 25
2.2.1.1 Basis of Cooperation 25
2.2.1.2 Basis of Responsibility 26
2.2.1.3 Basis of Mutual Protection 26
2.2.2 Accumulation of Wealth in Islam 26
2.2.3 Wealth Preservation 27
2.2.4 Wealth Distribution 28
2.2.5 Wealth Purification 28
2.3 Financial Planning Process 29
2.4 Recommendation 29
2.4.1 Wasiyah (Bequest) 30
2.4.2 Waqf (Endowment) 33
2.4.2.1 Advantages of Waqf 34
2.4.3 Hibah (Gift) 34
2.4.3.1 Advantages of Hibah 36
2.5 Final Remarks 37
Notes 37
References 37
3 Remittances, Political Stability and Economic Development: Empirical Evidence from OIC Countries 39
3.1 Introduction 40
3.2 Data and Model 42
3.3 Descriptive Statistics 43
3.4 Results and Discussion 45
3.5 Conclusion 48
Notes 49
References 49
4 Mitigating Shadow Economy Through Dual Banking Sector Development in Malaysia 51
4.1 Introduction 52
4.2 How the Banking Sector Can Mitigate the Shadow Economy 54
4.3 Determinants of Shadow Economy in Malaysia 57
4.3.1 Estimating Model 57
4.3.2 Sources of Data 58
4.4 Long-Run Models for Shadow Economy in Malaysia 60
4.5 Islamic Banking and the Shadow Economy 65
4.6 Conclusion 67
References 68
5 Islamic Common Market an Alternative Model to Globalization 73
5.1 An Overview 74
5.2 Rational Outlook of Islamic Common Market 75
5.3 Importance of Islamic Common Market: Universal Views 77
5.4 Dimensions of the Islamic Common Market 78
5.5 Challenges in Establishing an ICM 80
5.5.1 Globalization as a Threat 80
5.5.2 Lack of Unity 81
5.6 Establishment of an Islamic Common Market: The Way Forward 81
5.7 Challenges 82
5.8 Regulatory Frameworks 83
5.9 Islamization of a Common Market: Shariah Rulings 83
5.9.1 Mechanisms for Islamization of a Common Market: 83
5.9.1.1 Cooperation 84
5.10 Strategies for Establishing an Islamic Common Market 84
5.11 Final Remarks 85
Notes 86
References 87
6 Issues Deterring the Continued Growth of Awqaf in Bangladesh: The Way Forward to Its Development and Widening the Scope of Its Benefits 88
6.1 Introduction 89
6.2 Genesis of awqaf Legislation in Bangladesh 90
6.3 Present Legal and Administrative Structure of Waqf Administration in Bangladesh 91
6.4 Key Challenges in Developments of awqaf in Bangladesh 92
6.4.1 Inadequate Manpower 93
6.4.2 Unregistered Waqf Properties 93
6.4.3 Illegal Occupation and Misappropriation of Waqf Properties 94
6.4.4 Uncollected Arrears 94
6.4.5 Operational Inefficiency and Problem of Waqf Disputes 95
6.4.6 Absence of Provisions in Waqf Ordinance of 1962 Relating to the Development of Awqaf 95
6.4.7 Integrity of Mutawallis and Their Qualifications 97
6.4.8 Unauthorized Alienation 97
6.4.9 Personal Use of Waqf Compensation Money 98
6.4.10 Lack of Progressive and Innovative Ideas 98
6.5 Prospects of Utilizing the Potentials of Awqaf in Bangladesh 99
6.5.1 Waqf Income and Program for Community Development and Poverty Eradication 99
6.6 Recommendations and Plan of Action 100
6.6.1 Need for a New Waqf Act 100
6.6.2 Development of Urban Waqfs and Issuance of Waqf Bonds 101
6.6.3 Collaboration with Other Countries 102
6.6.4 Establishment of National Waqf Advisory Board (NAWAB) 102
6.6.5 Education and Training for Mutawallis 103
6.6.6 Increasing Staff Benefits 103
6.6.7 Waqf Tribunal 103
6.7 Conclusion 104
Notes 104
References 105
7 Money in Islamic Banking System 108
7.1 Introduction 109
7.2 A Brief History of Currency in Islam 109
7.2.1 History of Currency during the Time of the Prophet (PBUH) 110
7.2.2 History of Currency during Khulafa’ al- Rashidin Period 111
7.2.3 History of Currency during Islamic Caliphate 111
7.2.4 History of Currency Following Collapse of Islamic Caliphate 112
7.3 Fiqh Discussion of Money 114
7.4 The Siyasah Shariah Approach 115
7.4.1 Maslahah of Fiat Money 116
7.4.2 Mafsadah of Fiat Money 116
7.4.3 Maslahah of Gold and Silver as Money 116
7.4.4 Mafsadah of Gold and Silver as Money 118
7.4.5 Discussion on Masalih Al-Mursalah 118
7.5 Strategy to Establish Gold as Money in the Current Economic System 122
7.5.1 Determining the Alternatives 122
7.5.2 Criteria Determination 123
7.5.3 Infrastructure and Regulations 124
7.5.4 Deductive Analysis to Select the Best Alternative 126
7.6 Conclusion 129
Notes 131
References 131
Index 135