By DR. WAQUAR ANWAR
Economics, instead of serving the humanity, has become a tool to inflict pain thereon. Search for an alternative economics that can usher in justice and equity is on. Radiance Viewsweekly (referred to as Radiance hereafter), with its firm belief that economics based on the principles of Islam is the required panacea that can address the yearning of man for a just economic system, has been presenting and substantiating its viewpoint from day one. Almost all volumes of Radiance carry a number of articles and reports on related subjects; so much so that this material may be enough for at least one doctorate thesis, if not more. However, with the constraint of space and time available we will, in the following paragraphs, pass through some major articles of interest under three periods: first twenty years; till the last century; in the new millennium.
DURING THE FIRST TWENTY YEARS
During the very first years of its publication Radiance, in February 1964, carried an article “Interest-Free Economy: Panacea of Class-Conflict” by Irshad Ahmed. It argued that Islam provided the institution of Baitul Maal, the first of its kind in the world, and the institution of zakat, the most effective method of eradication of poverty from society. The Islamic economic system is neither communistic nor capitalistic but has all the good features of the two, creating a healthy and balanced human society. It further discussed the features of Interest-free banks, central banks, international trade and Mudarabah.
An article, “Economics towards Utilitarianism”, rich in content by Prof. Khursheed Ahmed was published in Aril 1964. It lamented the mad rush to amass material, in order to acquire more influence. Modern Science of Wealth, called economics, in its beginning chapters taught its readers the utilitarian aspect of possession. This selfish race led to groups, unions, federations, associations, blocs, monopolies, pacts and contracts designed to suit their respective ends, which in its turns resulted in class-wars. The acquisitive and materialistic society visibly cultivates a tendency among people to become rich over-night even by tainted means. Men must realise the moral values, social norms and rights of their brethren.
Within the next two years (January 1966) the magazine published an objective study entitled “Review of Five Year Plans; Projects for Progress, Plenty and Prosperity”. It reviewed the first three Five-Year plans and analysed India’s economic growth and concluded that it was impressive. While foreign assistance played a role, 80 per cent of development requirements were indigenously provided.
Next year (January 1967) Dr. Amir Hasan Siddiqi wrote on “The Stipendiary System of Hazrat Umar”. This was the first instance in human history that the government took the responsibility of feeding and clothing entire population of the state. Hazrat Umar systematised the system of wazaif (regular grants by the state to individuals based on specific criteria).
Radiance took special interest to report about the status of Indian economy. Nathulal Saksena presented a study of a bad face of Indian economy by describing “A Tale of Two Devaluations”. This was an in-depth study of devaluation of a currency.
“Lotteries – A Curse for the Society” by Shams Peerzada published in August 1969, talked about the ills of gambling in all form. Prohibition of gaming in Islam was specially mentioned.
In addition to such articles on the theory of Islamic economics, hazards of conventional unethical practices and status of India’s economic development, Radiance continuously reported about the development of the theory and practices of Interest-Free Banking which was in its infancy as its experts were developing its theoretical base and practices based thereon had started.
TILL THE END OF THE LAST CENTURY
Islamic banking developed fast during these two decades. Radiance too played its role and devoted enough space for related discussions and reporting. Some such discussions are described hereunder.
A report of a three-day seminar on Islamic banking in Bangladesh was published and the contents of major submissions there were highlighted in May 1985.
A very interesting informative article by Huge Montefiore, Bishop of Birmingham on the Christian point of view on interest, was published in February 1986. The Islamic point of view was presented by S.M. Imamuddin. The article of the Bishop discusses the history of prohibition of interest and the change of attitude towards it over the years in the Christian fraternity. The advantage of Islamic banking was highlighted in the same issue of the magazine in a box which, inter alia, said, “The organisational framework of interest-free banking in this country is weak and unregulated. This poses a great danger to the security of the savings of lakhs of people who patronise this sector.” It urged the Reserve Bank of India to regulate existing interest-free organisations. The truth of the note of caution, rather warning, was proved by later events.
Radiance those days was publishing the column “Between the Lines” by the veteran journalist Kuldip Nayar. In his column published in October 1988 titled “So Pop goes Pepsi” he commented on a rumour that Rajiv Gandhi, the then Prime Minister, was bent on facilitating Pepsi Cola project in India. It said, “When the Janata Party threw out Coca–Cola, the action was motivated by one principle: not to continue foreign collaboration in production of consumer goods. The country was never the loser for ousting Coca-Cola because the aerated water industry in India rose to the occasion and met consumer demands successfully. Why then bring Pepsi Cola?” Much water has flown beneath the Ganges and Yamuna since then but the relevance and the veracity of these lines surpass time like any universal truth.
Radiance has the distinction of publishing first hand writings of some of the most prominent theoreticians and practitioners of Islamic Banking. First and foremost mention is necessary about several articles by Dr. M.N. Siddiqi which later were published in his books on the subject or are now available on his websites. In his article entitled ‘Nature and Content of Islamic Economics’, he delineates the distinction of Islamic economics.
Another legendary author on the subject was Sheikh Mahmud Ahmad, whose article was carried in two issues of the magazine in May 1997. The title of the write-up was ‘Economic Justice in Islam’ in which he said that social justice is justice in all of the relationships occurring in a society on mutual gain. This is a distributive justice as it leads to an arrangement of distribution of these gains among participants in view of their respective efforts, opportunity cost and contribution. Sheikh Mahmud Ahmad is known for his Time Multiple Counter Loan (TMCL) Theory. This has been studied by Nawazish Ali Zaidi in the article ‘Abolition of Riba and Mahmud Model’ published in July 1990. Nawazish Ali Zaidi’s another article ‘Economic Implication of Riba’ was published in October 1990 which is a serious study of the real rate of interest in different countries and its relationship with supply of money, interest and budgetary deficits.
Mention needs to be referred to here about several writings of Dr. F.R. Faridi. As the writings on Islamic economics and related subjects in English by the author could not be published in many books, the files of Radiance may be a source of knowing what this worthwhile expert on the theory of Islamic economics wrote on the subject. One article, ‘Relevance of Islamic Economics to Indian Situation’ was published in 1988. Another write-up, ‘Salient Features of Islamic Economics’ was published in October 1999. Yet another article, ‘Islamic Economics Addresses Mundane Issues’ was published in April 2000. Further a report of a seminar on ‘Islamic Economics Teachings in Madrasahs’ organised by The Indian Association for Islamic Economics (IAFIE) was published in January 1996. It was conducted in Jamiatul Falah and it recommended the Jamia to include the discipline in its curriculum at least for the benefit of its teachers and senior students. If this required curtailment of any relatively less important subject, that should be done.
Experiments of Banks without Interest by Umer Chapra published in October 1993, described virtues of Mushrakah (sharing finance, entrepreneurship and management) and Mudarabah (agreement between two or more persons whereby one or more of them provide finance while the other provides entrepreneurship) as means of finance. It goes ahead in describing other trade based modes of finance like Ijarah (leasing), Murabahah (sale against a specified profit margin), Salam (advance payment against future delivery of fungible goods), and Ijarah wa Iqtina (hire purchase). It described the success of these concepts that far and delineated difficulties in the path of Islamic banks. The author said that some of the difficulties were of teething nature which would be overcome with passage of time.
Other difficulties emanated from lack of understanding in the nature of Islamic banks by their depositors and clients. There was absence of an Islamic financial market coupled with the failure of such banks to access to lender of the last resort. That compelled the Islamic Banks to keep a larger liquidity than conventional banks. He opined that the Islamic Banks were like embryos struggling to survive in an inhospitable environment without a proper support system.
‘Islamic Banking in the Indian Context’ by M.H. Khatkhatay published in October 1997 reviewed the functioning of Islamic Financial Institutions including Muslim Fund type of institutions. It described Baitun-Nasr of Bombay (now Mumbai) which operated as a cooperative credit society. The author lamented that Muslim Fund types of institutions mostly failed to take cognizance of changes in government regulations. It was suggested that a 100 per cent equity based leasing company format could be explored. It concluded with hope that the day will dawn when establishment of full-fledged Islamic Banks operating on post facto determined rates of return may become a reality.’
Dr. Rahmatullah, a teacher of economics, wrote on the ‘Problems of Interest Free Banking in India’ published in 1992. He opined that the conceptual lacunae and vision of the promoters and managers of existing Islamic institutions greatly hampered the growth of interest free societies. They thought and acted as a charitable organisation and did not think about more productive use of money. [A box in the magazine informed that there were 159 Islamic Financial Institutions in India those days. It also gave state-wise break-up of such institutions.]
‘Islamic Banking in the Indian Context’ by K. Rahman Khan, the then chairman of Al-Ameen Educational Society of Bangalore, published in May 1995 asserted that Islamic Economic Theory gives equal importance to both human activity and money unlike the present economic theories which give weightage to the latter at the cost of the former. He appealed to the Ulema to project the prohibition of Riba as a concept of well-being of the society instead of just confining to a haram (forbidden) and halal (permitted) concept. He further appealed to the intelligentsia not to approach this system with a closed mind and consider it on its merits without attaching any religiosity to the system.
Dr. Javed Jameel, a prolific writer, wrote under the title ‘Economic Fundamentals on the Rise’ (February 1998) and described the fundamental questions raised in economics which are both correct at times and are given weightage more than what they should be given. He talked about the need for correct places of different fundamentals of economics. In another article published the same month under the title ‘Islamic Banking: The Myth Explodes’ he praised the performance of Islamic banking in Bangladesh. If this idea of banking without any speculative and unfair earning can succeed in the poorest of poor country like Bangladesh, it has the potential to face successfully all weathers and pastures!
Sabahuddin Azmi described the Islamic approach of fiscal policy (April, 1996) recommending that it should be guided by the principles of Shari’ah and be based on Ijma (consensus) and Shura (consultation). It described the Islamic principles relating to Expenditure and Revenue, Social Security, delineating the elements of such a Fiscal Policy saying that zakat, voluntary contribution, other taxes and public borrowing are its sources of revenue. On expenditure side, the article said, the state should be oriented toward removal of poverty, helping the needy, bringing about social justice and checking inequality and income imbalance. The article referred to the works of Mawardi (450 CE), Abu Yala (458 CE) and Ibne Taimiyah (728 CE).
M. Hanif Lakdawala in the article ‘Globalisation: A Threat to India’s Sovereignty’ (May 1998) warned that the uncalled and unqualified tilt of our government towards whole-sale capitalism in the name of globalisation has had fatal consequence. He further exposed the fascist agenda of Bharatiya Janata Party in the name of Swadeshi movement. It would be farce to take it as an anti-imperialist agenda.
Other articles that may be noted include ‘Principles of Islamic Banking and Finance’ by Syed Khalid Husain (December 1998) and ‘Study of Islamic Banking in Some Muslim Countries’ by Muhammad Arif (October 2000).
IN THE NEW MILLENNIUM
Most of the issues of Radiance in the 21st century carried articles or reports relating on economics in general and/or Islamic economics. This writer serialised articles in the magazine, which were later published in two books by Markazi Maktaba Islami Publishers under the titles Economics in Islam and Business Transactions in Islam. In addition, this scribe also wrote about budgets and other economic events and contributed a column ‘Balance Sheet’ for some time.
Jamaat-e-Islami Hind organised an international seminar on ‘Islamic Banking; Justice and Equity’ on 18-19 February 2006. Radiance published Special Issues and Focus Issues on related subjects both before and after the event and kept the discussions alive.
Several articles were made available by Dr. M.N. Siddiqi including ‘Meaning and Incidence of Riba’ (August, 2004), ‘The Evolution of Islamic Finance’ (April, 2006), ‘Future of Islamic Finance’ (October, 2007), ‘Man must Learn to Live in Moderation’ (April, 2009), and ‘Risk Management in an Islamic Framework’ (April, 2009).
An interview of Dr. Umer Chapra on the future of Islamic banking and how it can become a viable alternative was published in March 2006.
Suhail Zubairi of Dubai Islamic Bank was writing a weekly column in a Dubai newspaper. Radiance published regularly those writings and later compiled his writings which were published by Markazi Maktaba Islami Publishers under the title ‘Islamic Finance.’
H. Abdur Raqeeb has been very kind to Radiance. He provided the magazine with news and comments relating to Islamic banking in India on regular basis. He is a man of action and has not much time left for writing articles. However, some of his articles which Radiance could get hold of and publish include ‘Space and Scope for Islamic Banking’ (November 2009), ‘Islamic Finance: An Ethical Alternative to Conventional Finance’ (September 2010), and ‘Islamic Banking Has a Bright Future in India’ (February 2011). An article published in August 2011 ‘Kerala to Lead, Be Role Model in Islamic Finance’ by Ali Jasim, an associate of H. Abdur Raqeeb, was also based on the inputs from Abdur Raqeeb.
Another authority on the subject with similar sounding name but with slight variation in spelling Abdur Raquib, Deputy Executive President, Islamic Bank Bangladesh Limited, Bangladesh, contributed a write-up entitled ‘The Philosophy of Islamic Insurance’ which was published in January 2001. That was a very useful contribution as Islamic Insurance (takaful) has not been discussed much by other writers.
Shariq Nisar in his article ‘Islamic Finance: Western Misgivings’ said that some of the apprehensions may be genuine. The challenge is to evolve a fool proof system and blemish free function of Islamic financial institutions.
Radiance was successful in attracting a prolific writer on the subject Syed Zahid Ahmad to contribute and some of his articles published are ‘Islamic Finance to Reduce Fiscal Deficit’ (July 2009, published in two parts), ‘Interest Inflation and Money Value’ (November 2009), ‘Challenges to Central Banking in the Context of Financial Crisis’ (February 2010), ‘Legal Provisions for Interest-free Banking in India’ (May 2010), and ‘Participatory Banking for Equality before Law’ (February 2013).
An article jointly written by Syed Zahid Ahmad and K.A. Najmi entitled ‘Islamic Banking Windows in India’ was published in October 2009.
K.A. Najmi also contributed one exclusive write-up ‘Islamic Finance under Indian Legal System’ (May 2010).
Kashif Hasan Khan, a research scholar, wrote few articles including ‘Why Islamic Banking and Finance’ (February 2010), ‘Risk Management: The Challenge Islamic Banking Continues to Grapple with’ (October 2010), ‘Impediments to Islamic Banking’ (November 2010), and ‘Muslim Women and Islamic Finance’ (May 2011).
‘Globalisation vis-s-vis Cultural Diversity’ by Abdulaziz Othman Altawairji published in March 2002 argued that globalisation as imposed by world superpower is counterproductive as it should coexist within the framework of cultural diversities. Only then globalisation can ensure human prosperity and world peace.
Besides, articles by other authors are mentioned as under:
• Islamic Banks in India by M.Y. Khan (February 2001)
• Interest-free Banking: a beginning of Alternative Economy by Dr. Abuzar Kamaluddin (August 2004)
• WTO: The Scourge of Farmers’ Misery by Syed Sultan Mohiddin (October 2009)
• Let Uncles of Islamic Banking Concentrate on Basics by Mansoor Durrani (November 2009)
• Challenges for Islamic Banking in India by Dr. Rahmatullah (January 2010)
• Islamic Response to Globalisation by Dr. Syed Khalid Iqubal Haider (September 2010)
• BSE Launches Islamic Index: Paves Way to Islamic Finance in India by Ayub Khan (February 2011)
• Is It the End of the American Century by Yamin Zakaria (August 2011)
• Islamic Banking Vs. Usury by Muhammad Sirajuddin & Sayyed Saheer (January 2013)
Another related field where Radiance served the community exclusively is development of Interest-Free microfinance under Cooperative Sector. Several write-ups and reports aimed at this particular object. Mention may be made of the report by M.S. Khan ‘Al-Khair Cooperative Credit Society: a Working Model of Interest-free Microfinance.’ Further Radiance, in association with Sahulat Microfinance, has formed a Forum for Group Discussions on Economic Issues (FGDEI) whose monthly meetings are being reported regularly. Major areas of discussions under in the Forum comprise Interest-free Microfinance.
Legal developments and court cases on the subject are being covered exclusively in the magazine, including the write-ups of this scribe ‘Landmark SC Judgment on Cooperatives’ (November 2011) and ‘Review of Kerala High Court Judgment.’ Last but not the least, mention may be made of the interview this scribe conducted with Arshad Ajmal and was published in March 2009. That interview went a long way in generating interest on the subject and introduced Mr. Ajmal as a resource person on the subject.