Rising Kashmir News
Srinagar, Oct 25: As economic recession engulfs US and Europe as a result of financial meltdown, the only apparent alternative that can save world from this financial debacle is the Islamic economic order.

These views were expressed by Shoib-bin-Mukhtar, an Islamic Scholar of Al-Azhar University, Cairo on Saturday, while delivering an extension lecture on "Global Financial Debacle- An Eye-Opener Towards Framing Islamic Economic Order” in Kashmir University.”

“Islamic economic system has been a successful system for thousands of years and it alone can cure and prevent the occurrence of the economic crisis, the world is presently confronted with. It has already prohibited such factors that lead to economic crisis in the first place,’ the learned scholar said, adding that Islam offers solution to all the problems of mankind in the world. 

Delving on capitalist and socialist economic systems, the scholar said, “The capitalist economy is suicidal just as the communist socialism was; only the Islamic model is the sure-cure and safe from economic pitfalls.” 

Shoib-bin-Mukhtar added that the efforts in plan to salvage the capitalist economic system can at best relieve its pain for the time being. “That is because the reason behind the collapse requires a serious treatment at its foundations, not the patchwork.”

He talked of three issues that are responsible for eroding the capitalist economic system.

1. “The clipping of gold as the standard currency, and bringing in dollar as the capital standard at the end of the Second World War and finally replacing gold by dollar as the monetary standard resulted in rendering the global economy susceptible to any economic shake-up in the United States. And unless gold returns to its position of being the monetary standard such economic crisis will certainly be repeated and any dollar shock will automatically shake the economies of other countries and even American policies that reflect on the dollar will also affect elsewhere.”
2. “Interest based loans result in great economic difficulties even though the original loan amount gradually decreases in time with respect to the interest against it, and this results in loan repayment crisis and the economic activity slows down due to inability of many or most of the middle income groups to repay the loans and this effects the production as well.”
3. “The system and practice in the financial markets and stock exchange of buying and selling shares, financial instruments and commodities do not require possession of goods rather than these are sold and bought many times over without being actually transferred from the original seller. This practice is invalid and this causes difficulties rather than solving them because this inflates and depreciates transactions even though the goods are non-existent. All this spurs shake up in the market.” 
 Shoib-bin-Mukhtar maintained that Islam mandates only gold and silver to be the monetary standard and that paper currency issued in lieu of the monetary standard be fully backed by gold and silver and be convertible on demand. “Consequently, paper currency of one country should not be tied to the currency of another country; rather each state’s currency be free of another currency and have its own fixed, unalterable and intrinsic value,” he said.

The visiting scholar said that Islam prohibits interest in all its forms and mandates loans to the needy to assist them without any interest or surcharge over their principal amount.

“Similarly, Islam prohibits selling of goods before the buyer takes possession, thus disallows transactions in goods not in possession. Also prohibited transactions in financial instruments, derivatives and shares resulting from invalid contacts are prohibited. Thus Islamic economic system has addressed and treated all economic problems and crisis resulting,” he said.
  
The talk was organised by varsity’s commerce department. Speaking on the occasion head Department of Commerce, Professor Khursheed Ahmad said that capitalistic economic system is in deep crisis at present due to current credit crisis which has given rise to a debate the world over.

“There is a need of having a look towards the Islamic economic order, which can act as an alternative for the capitalist economic system. This is an ideal system and we should educate people about the possible solutions available in this system which preaches socio–economic justice as well,’ he added.

Professor Khursheed said that we have not to narrow the concept of Islamic economics to Islamic banking or finance, “but Islamic economics is a much broader concept and it is surely to be an alternative to capitalistic economic system.”

 The talk was followed by a brief Q&A session in which students and scholars raised issues of monopoly, gold standard, stock market returns and questions about Public Limited Companies. Shahnawaz Gulzar , MFC student raised the issue of monopoly. “Islam Prohibits monopoly, so if a process or product is discovered by an individual, does it mean he can’t charge the customer for the same”, Shahnawaz questioned.
“Circulation of wealth is a duty and wealth should not be concentrated in few hands as is prevalent in the existing Capitalist structure “,Shoib-bin-Mukhtar replied.