ECONOMIC
DEVELOPMENT IN
ISLAMIC PERSPECTIVE
REVISITED
AUSAF AHMAD
Presentation at
Pune College, Pune, India
March 09 -11, 2012
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In the name of
Allah
the most Gracious
The Most Merciful
2
This Presentation Includes -1:
1.
2.
3.
4.
5.
An Introduction
Some Observations on Development and
Islamic economics
Some observations on Islamic Strategy of
Development
Islamic values and Development Values
Some Lessons from Hisry: Scientific basis,
Increases in productivity and Role of
institutions.
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This Presentation Includes -2:

Towards a Development Strategy in Muslim
Countries:
– Application of modern science
– Investment in Human capital
– Balance between Market and State
 Some
Observations on Islamic institutions:
 Islamic financial institutions
 Zakah institutions
 Waqf institutions
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This Presentation Includes -3:

Concluding Remarks.
– A more comprehensive model of development
– Development strategies of the Islamic world
must reflect ‘ground realities’.
– Instead of speaking of high ideals, Muslim
countries may assign a developmental role to
existing institution.
– Developmental role may particularly be
assigned to existing institutions of Zakah,
Awqaf and Mosques
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INTRODUCTION-1
1.
2.
3.
More than 25years ago, a prominent
Islamic thinker spoke of a challenge
before the Islamic Ummah. This is the
Challenge of Development.
The Challenge remains as strong now as
it was then.
The political economy of International
Economic system has drastically changed
during this period.
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. INTRODUCTION- 2 [Contd]
The map has been redrawn.
 The demise of the Soviet Union.
 The idea of ‘ catching up’ is no more as
mismerizing as it was once. The
industrialized countries are developing at a
faster rate, and gap between the rich and
poor nations is increasing
 New forms of neo-colonialism: near
monopoly situation in trade, technology and
finance.

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INTRODUCTION -3 [contd.]
The ‘defeat’ of the Socialist system does not
mean a victory for the capitalist system
which has its own problems.
 Skewed distribution of income and wealth.
Poverty, economic injustice, inequality of
opportunities, crime, inflation, cycles are
some of the diseases of capitalist system
 Both systems were devoid of any moral
content.

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Development and Islamic Economics
Economic development has been a
neglected area in Islamic economics
 The point of reference has been a seminal
paper by Khurshid Ahmed that was
presented at the First International
Conference on Islamic economics held in
Makkah in 1973.

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Development in Islamic
Persprective-1


Khurshid Ahmed starts with the concept of development
and reiterates its holistic nature.
He emphasizes that Islamic concept of development is
based on four Islamic notions:
1.
2.
3.


Tawheed: Oneness of God
Rububiyah: Divine Providence
Khilafah: Man is God Vice gerant on Earth
Tazkiyah: Purification and Growth
The main criterion on which Development
as a human experience, must be
evaluated is that what it does to lives of
people.
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Islamic Strategies of
Development
Khurshid Ahmed then identifies an Islamic
strategey t to Development
 Can there be “an Islamic strategy of
development?”
 Or there could be several “Islamic”
Strategies of development.
 Apparently different authors have
suggested different strategies. Khurshid
Ahmed, Chapra, Siddiqi, M. A. Mannan
have given different strategies.

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Islamic Strategies of
Development -1[Contnd.]
Most of suggested Strategies are nothing
but “tall orders” requiring far reaching
changes in the political and economic
structures.
 Till such time that these changes occur,
these strategies constitute mere
“academic exercises”.

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Development and Islamic
Economics
Development has remained a neglected
area for too long.
 Lately researchers in the area have turned
their attention to it.
 Publication of scholarly articles and books,
organization on seminars, conferences and
symposia etc. are different manifestations
of this interest.

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Islamic Values and Development
Values
Rational approach, self interest, sanctity of
private property, profit motive, negation of
parochial approaches are identified as
some of the development values.
 Islam emphasizes a universal and human
approach in all matters concerning human
beings. It enjoins justice and fairness in
human dealings. It encourages rational
enquiry and freedom of action.

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Islamic Values and Development
Values-2
It may be argued that there is no inherent
conflict between the values by Islam and
the values required for development.
 The reasons for the apparent
backwardness of Muslim societies must be
sought some where else. For example in
colonial rule and mismanagement of the
economy.

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Lessons from History
1. Scientific Revolution
 2. Increases in productivity per worker
 3. Role of institutions and policies
 Some Muslim countries have shown
dynamism in the recent past establishing
new development institutions. Tabung
Haji in Malaysia and Grameen Bank in
Bangladesh may be cited as examples.

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Towards an Islamic Strategy of
Development in Muslim
Countries
Desirability of Development
 Ingredients of an Islamic strategy

– Application of modern science and
technology
– Investment in Human capital
– Balance between Market and State
– Role of Islamic institutions
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Institutional Development in
Muslim Countries
Islamic Financial Institutions
 Zakah Institutions
 Awqaf Institutions
 Islamic Institutions and Resource
mobilization

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CONCLUSION
A more comprehensive concept of
development
 Muslim economists have traced the
reasons of non performance of Muslim
countries in adoption of western models
and inappropriate strategies.
 Lessons from history and ground realitries
 Developmental role of existing Islamic
institutions.

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THANK YOU FOR YOUR
PATIENCE !
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