Islamic Economics

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Islamic Economics

Economics studies are devoted with the economical behavior of individuals and societies, for

instance production, consumption, saving, good exchange and so on. Every nation is supposed to

regulate the production of goods and services as demanded by the people, consumers, thus any

economic system needs to answer four main questions:

1- What to produce of goods and services?

2- How to produce these goods and services?

3- Who to produce to these goods and services?

4- What will be the rate of economic growth?

Economic growth is essential in order to be able to provide high living standards to the people

affording to provide more products, the faster the rate of economic growth the better the living

standards are going to be. The four main production resources are:

1- Natural resources

2- Capital

3- Labor

4- Technology

Every economic system aims to achieve a better utilization of these resources which leads the

way to a greater economic growth providing a balanced system and better living standards

through equal division of wealth among different social sectors.

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Towards the end of the 20th century, a new terminology was raised by muslim scholars, although

theories ages back to the early days of Islam, yet the term Islamic Economics was only stated

fourteen hundred years later. The term was not simply naming something that already existed

but it was the willing to establish a modern economic system bounded by Islam regulations that

would certainly meet the economic and social needs of Islamic continents and countries helping

these nations to achieve a faster economic growth and hence a better living standards. This

project also aimed to reflect the Islamic identity and set loose the countries from political and

economical dependency and oppression of the west.

After World War II, Islamic countries retained their political independency from western nations

and started the march to establish economic growth. Several ideologies were adapted aiming

to set or recreate the economic system that would affect the economic policies. Some of the

directions that was adapted were:

1- Aiming to establish an independent national economic system that reduces the

dependency on the outside world and gives priorities to meet the needs of the citizens

aiming to create economic growth depending mainly on own resources of the country

2- Keep the capitalist identity of the previous economic system (before political

independence) and guard the policies that ensures the foreign affairs but with new

objective of meeting national targets

3- Construct a communist economic system where the public sector gets enlarged and rely

on affairs with eastern countries rather than the capitalist west

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4- Call for the establishment of an Islamic economic system that ensures meeting the

economical interest of the nation protecting a balanced foreign affairs with the outside

world baring in mind integrating with remaining Islamic countries

During the 50s and 60s there was a great tendency to the first track of establishing an

independent national economic system reducing the dependency on the west, while the capitalist

system was strengthened in some nations by the British and French to ensure their interests in

these countries. Tendency to communism appeared in the 60s to the 80s where it was greatly

supported by the Soviet Union until its fall in the early 90s and with it the communist system in

the middle east and other Islamic countries.

As for the Islamic theory for economics it found the light in few countries, Pakistan, KSA,

Sudan, and Iran. Unfortunately it is not yet fully matured, thus even though the theory was

heavily welcomed by the people in most countries, the system is still trying to fight obstacles and

political opposition.

Even though it has been past five decades at...
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