Adopting Islamic money system before abolishing interest Priscilla Parveen http://www.nation-online.com/200008/24/n0082402.htm Islam is 'Din-e-Kamil' a perfect religion. Islam is also 'Din-e-Fitrat', a religion of the nature as its laws and commandments are in conformity with laws of nature. Islam is a complete code of life for salvation and welfare of mankind in this world and afterlife. Famous English writer HG Wells (1866-1946) wrote: "Islam established in the world a great tradition of dignified fair dealing and created a society more free from social oppression than any other society had been in the world before." There are a number of prohibitions in Holy Quran and the saying of the Holy Prophet (PBUH) regarding various financial matters. They relate to Zakat, blood-money, trusts, trade, weights and measures, loans, contracts, misrepresentation, profiteering and hoarding etc. The Arabic word 'riba' is 'usur' in English. Riba is translated as 'interest' and indicated as synonym of 'usury'. Literally riba means 'excess or addition'. When delivering the last sermon at Hajjatul Wida, the Holy Prophet (PBUH) abolished all usury. The punishment (fire of hell) for usury is mentioned in Surah #2 Al-Baqarah verse 275. Riba is prohibited in Surah #3, Al-e-Imran in verse 130. The question being debated these days is whether the interest as charged in the modern banking and financial institutions can be regarded as riba which is strictly forbidden in Islam. As the value of money is continuously regressing, an ordinary Muslim wonders why Allah would not allow some mark-up or compensation for reduction in value of money. If one wants to save money to buy a plot, or a car or for marriage of children. And if the profit on the money invested in the Governments savings schemes can be regarded as riba. As we will see later in this write-up, there are new forms of riba that- a. Increase the burden of foreign debts on the masses due to devaluation of currency. That means we have to supply higher quality of goods at lower prices to redeem the debt. This can happen even under interest free banking. b. Harm financial interests of Islamic and Third World countries due to abandonment of gold standard and fluctuations in foreign exchange rates as manipulated by G-7 countries. In Bangladesh, the purchasing power of Taka has been declining since 1972 when the Taka was worth more than a Riyal and you could get a US dollar for less than Taka 20 only. The worth of Taka continues regress right from then for our imports have been exceeding our exports. We can blame our trade deficits for devaluation of Taka but there are many other reasons such as poor economic policies, corruption, and irresponsible attitude of the rulers in printing currency without proper backing. Our dependence on IMF loans to meet the obligations of our trade deficit has been growing and the cost of living has also been going up and up adding to the miseries of the people. Since 1972, after abandoning the gold standard, the IMF has used the Special Drawing Rights (SDR) as its standard unit of account valued in terms of a weighted 'basket' of currencies. And IMF rules have been progressively adapted to floating exchange rates that are controlled by the big eco-powers. The liabilities of the Third World countries are inflated and the liabilities of the G-7 countries are reduced by jugglery of exchange rates. This can be termed a new kind of riba. IMF allows standby loans to members in BOP difficulties after certain corrective measures are instituted besides paying interest. The G-7 has been blamed for the 1997 stockmarket crash. It is also blamed for economic exploitation of Asian tigers and Far Eastern countries in 1996-97. There has been growing criticism of the group for its policies of manipulating the exchange rules to maintain their economic supremacy and to obstruct flow of funds to oil rich Islamic countries by unfair means. And the World Bank, IMF are behaving like agents of the G-7 countries who are accused of practicing economic slavery. We have been suffering trade deficit every year and depend on loans to meet our liabilities. And there are chances of default. Indeed if we conform to Islamic code of life, our diseased economy may be cured. It would be a fallacy to believe that merely by adopting Islamic banking and interest free economy our problems would be solved. Though containing the imports within our income from exports will continue to be crucial and vital, one of the most important steps to change our eco-system would be to modify our Money system for the sake of fairness and equity. Our money system must conform to the standards of trust, measures, weight and balances as well as good governance as prescribed in Quran-e-Hakim and the Sunnah. * For evolving standards for paper and credit money, there appears to be need for ijtehad. Holy Quran advises again and again to ponder over its verses. * Our currency may have to be linked in gold or silver with ample reserves to maintain stability and to make gold the promise to convert the currency to silver or gold on demand. Increase in GDP would continue to be vital for stability of the currency, otherwise gold and silver coins will be smuggled out. In early days, we have to ban import of many items to avert trade deficit. Our policy of inviting foreign capital would need to be re-appraised as transfer of profits to investors' countries may have an impact on our BOP with IMF. These will not be enough. It is vital to acquire political stability and maturity by inculcating the spirit of Islamic brotherhood among the masses. As a nation we must increase our individual and collective output and production. Principle of fair play and justice must be upheld and habit of honest day's work and fair dealings in all walks of life must be developed. We must engage in jehad against corruption, demagoguery, illiteracy, nepotism and many other social evils. We must promote research, exploration, training and education and introduce reforms in religious madaris and launch programmes for adult literacy. |