Financing economic growth with stability from Islamic perspective
Joint Authors
Hasan, Zubayr
Shaukat, Mughis
al-Habashi, Datuk Sayyid Uthman
Source
Journal of Islamic Business and Management
Issue
Vol. 4, Issue 2 (31 Dec. 2014), pp.15-62, 48 p.
Publisher
Riphah International University Riphah Centre of Islamic Business
Publication Date
2014-12-31
Country of Publication
Pakistan
No. of Pages
48
Main Subjects
Economy and Commerce
Financial and Accounting Sciences
Religion
Islamic Studies
Topics
- Banks
- Islamic jurisprudence
- Economics
- Islam
- Financing
- Comparative analysis
- Speculation
- Religious aspects
- Banking
- Usury
- Islamic Banks
- Fiscal stability
Abstract EN
-Evidence has been mounting that the interest-based debt financing regime is under increasing distress.
Evidence also suggests that the financial crises, whatever title they carried-exchange rate crisis or banking crisis- have been debt related crises in essence.
At present, data suggest that the debt-to-GDP ratio of the richest members of the G-20 is expected to reach 120 % mark by 2014.
There is also evidence that out of securities worth US$ 200 trillion in the global economy, no less than three-fourth represent interest-based debt.
It is difficult to see how this massive debt volume can be validated by the underlying productive capacity of the global economy.
This picture becomes more alarming considering the anemic state of global economic growth.
There is great uncertainty with regard to interest rates.
Although policy-driven interest rates are at near-zero level, there is no assurance that they will not rise as the risk and inflation premia become significant.
Hence, a more serious financial crisis may be in the offing and a general collapse of asset prices may occur.
This paper argues that the survival of the interest-based debt regime is becoming less tenable, as is the process of financialization that has accompanied the growth of global finance over the last four decades.
The above has resulted in an unprecedented increase in economic risks; generating (adverse) nonlinearities in system’s behavior.
Such a behavior is nothing but a demonstration of the verse, “Allah obliterates ribā ….” of the Qur’ān.
As a result, the search is on for a paradigm shift towards a less volatile and more resilient financing regime.
The paper proposes risk sharing based Islāmic financing as suitable alternative and also demonstrates empirically
American Psychological Association (APA)
Shaukat, Mughis& Hasan, Zubayr& al-Habashi, Datuk Sayyid Uthman. 2014. Financing economic growth with stability from Islamic perspective. Journal of Islamic Business and Management،Vol. 4, no. 2, pp.15-62.
https://search.emarefa.net/detail/BIM-601824
Modern Language Association (MLA)
Shaukat, Mughis…[et al.]. Financing economic growth with stability from Islamic perspective. Journal of Islamic Business and Management Vol. 4, no. 2 (Dec. 2014), pp.15-62.
https://search.emarefa.net/detail/BIM-601824
American Medical Association (AMA)
Shaukat, Mughis& Hasan, Zubayr& al-Habashi, Datuk Sayyid Uthman. Financing economic growth with stability from Islamic perspective. Journal of Islamic Business and Management. 2014. Vol. 4, no. 2, pp.15-62.
https://search.emarefa.net/detail/BIM-601824
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references : p. 55-62
Record ID
BIM-601824