Role of Islam in Economic Develpoment

Only available on StudyMode
  • Topic: Islam, Sharia, Muslim world
  • Pages : 9 (3100 words )
  • Download(s) : 134
  • Published : March 26, 2013
Open Document
Text Preview
International Ataturk-Alatoo University

Role of Islam in Economic Development

Done: Aizhamal ZHUMALIEVA
Checked: Ibragim KONCAK

2012

Content
Introduction……………………………………………………………….1 Statistics and Trends………………………………………………………2 Economics of Wealth Generation ……………………………………….3 Islamic Merchants…………………………………………………………5 Islamic Law and Economic Growth………………………………………6 Islamic Banking…………………………………………………………...6 Conclusion…………………………………………………………………7

Introduction
Researchers like Huntington (1996), Landes (1999), and Inglehart and Baker (2000) argue that explanations for economic growth should go further to include a nation’s culture. Their argument absolutely makes sense because culture affects personal traits such as honesty, thrift, willingness to work hard, and openness to stranges, which consequently influences economic outcomes. Religion is thought to be one of the most important dimensions of culture. Thus Weber (1930) argued that religious practices and beliefs had important consequences for economic development. Islam is no exception, just as David Landes, the Harvard economic historian, wrote in his book "The Wealth and Poverty of Nations", "No one can understand the economic performance of the Muslim nations without attending to the experience of Islam as faith and culture," In 10th century, which is known as Golden Age for Islam, Muslim societies led the world in science, philosophy, culture and prosperity. But soon it came to the end, and Islamic countries have long lagged behind other countries. It is easy to define with the help of analysis of current international financial data. Those data highlight the great inequality in income between Christian dominant and Muslim dominant countries. The richest countries in the world are those of Europe, North America, and East Asia. Only a small number of Muslim countries approach to their income levels, and this is only due to their oil wealth. In many of Muslim countries income growth is low so that gap is widening. Scholars are sure that it is not just coincidence but Islam has significant influence on economic ascents and descents. If it is so, what role does Islam play in economic performance? How does it affect economic advancement? What spheres and industries does Islam influence? Is there any way to solve the problem? The purpose of this paper is to show the relationship between Islam and economy and critique some Islamic mechanisms that drag the economic activity. The first part of the paper suggests some statistical data that reflects general image of economic state of Islamic countries. Next section defines the process of wealth generation and impact of Islam on capital, innovation, and literacy. After, Islamic trading patterns are analyzed. Then Timur Kuran’s, well-known economist, arguments about economic effect of Islam are stated. And the last part reviews Islamic financial institutions.

Statistics and Trends
Level of economic development, whether measured by per capita income or variables like trade, literacy, science, scholarship and technology, has long been lower in the Islamic world than in Christian world, especially those of in West. Here is one empirical data that prove this situation with income per capita being a dependent variable. Table 1 is a regression model, which include 132 countries covered by the World Development Report for 1995, shows that relationship exists between Islam and per capita income. In the first regression, independent variable is the share of Muslim within total population, this regression indicates statistically significant negative relationship between two variables, but its fit is poor. The second regression, which includes additional independent variable, has considerably better fit. Membership in OPEC turns out to be a significant contributor to income, and location in Subsaharan Africa a highly significant depressor. The Muslim share of population remains very significant...
tracking img