Governments throughout the Muslim world, with the intention of uniting Muslims economically and to increase their cooperation on other issues, have created institutions like the Jeddah-based Islamic Development Bank.
The article is concerned with social choice and decision-making in Islamic social theory. The author touches on the ideas of Shura and Ijtehad in making decisions in an Islamic society. Drawing on modern sociological terms like knowledge-function, the author deals with how policy decisions maintain the economic and social welfare of a people.
One can come to a broader understanding of Islamic finance by applying Islamic principles and methods to the international economic system. The cornerstones of Islamic finance include profitability and risk-diversification.
Seeking to avoid riba (interest) in financing, individuals in the Islamic world are looking at equity finance as a possible substitute for debt financing. However, equity markets are not as strong as desired in developing
Looking at the example of Malaysia, the authors explore the financing of small and medium-sized enterprises (SME) in developing countries. Recently, there has been a growing potential niche for SMEs in Malaysia due to changes in behavior in the manufacturing sector. A possible role for Islamic banks and venture capitalism is foreseen by the authors in providing funds for SME's. An idea put forth is that management training and education are in need of enhancement.
The author develops the idea of the ethical numeraire and relates it to Islamic economics. When ethical motivation drives production, consumption, and distribution in an economy, a certain equilibrium is reached that is locally stable (though not globally stable). In Islamic thought, the ethical numeraire is a concept that is linked to value in the economy.
The author looks at Islamic economics as a system that stands as a possible solution to the economic challenges and difficulties of modernity. Neoclassical economics, it is argued, is flawed in some of its central postulates. These flaws lead to social ills. Islamic economics, alternatively, is more direct in how it deals with certain problems such as unemployment. Parameters set on the economy by the shari`a are discussed.
Foreign attorneys operating in Saudi Arabia should be aware of four contrasts between Western and Islamic law. First, Islamic law has a deep religious basis and motivation, while Western law was made by men for men. Second, Islamic law has four sources (
Attempts have been made to implement a comprehensively Islamic economic policy in Pakistan in accordance to Shari'a. A fundamental tenet of any such policy would be
In order to allow Muslims avoiding interest to own homes, the concept of the Shared Equity Rental (SER) has been developed. The SER is an alternative to the conventional mortgage first worked out in Halifax, Canada in 1975. The structure of the SER is based on an idea similar to partnership. A number of investors pool funds in order to buy a home. One investor acts as the tenant-buyer. He lives in the house and pays rent to the other investors in the deal, who own shares of the property. This rent is based on the market value of the house, as determined through outside assessment.