Strategic Focus of Islamic Economists, Was it correct?

Since the rebirth of Islamic economics, writers have been busy talking about Islamic banking and finance, Islamic modes of finance, development models derived from the Western models of the sixties and seventies and lately models for corporate finance that copy the American studies in this area.

For such a long time we tried to convince ourselves that the real road to development is through the Islamization of the banking sector. We were overtaken by making it founded on the double-tier Mudarabah to the extent that we spent a considerable amount of ink and paper, and probably energy too, on the issues of Murabahah and Mudarabah while the real practice of Islamic banks has been drifting toward Tawarruq! It was a beautiful illusion for which we neglected the main concerns of our societies as well as the core of Islamic economics: the socio-political requisites of economic development. We even neglected the basic institutions of the Islamic economic system.

For apparent reasons, we concentrated our effort on developing Islamic banking, and they grew to an extent that may make them a monster that destroys the purity of the economic thinking of our elite activists. Islamic banks banking and finance also consumed the abilities of the elite Shari’ah specialists as if it was the most important issue of the life of our generation. I still remember the cry, about two decades ago, of one Islamic economist for the need to discuss issues in the Islamic political economics, it went with very little response!

It was only recently that a few Islamic economists started dealing with issues of development, political economics of the role of government and of the economics of poverty reduction inspite of the lip service to these issues we find in a few generalist writings that are spayed over the past five decades of Islamic economic. Additionally, the institutional setting of the Islamic economic system and the role of the non-profit sectors have just started to be recognized as important fundamentals of Islamic economics.

There is a serious need for re-examining the existing writings on Islamic economics and to see whether it is acceptable to permit the past trend to take its hold on the future of Islamic economics. There is a need to shift our focus to studying the economics of poverty in the Ummah and how to recruit the economic rhetoric to become an instrument of change and to develop a new generation of our traditional socio-economic institutions to would help reconstruct the interaction between the human element and the organizational setting in a way that creates an environment of development and growth.

The thinking of Islamic economists must lead the Shari’ah specialists to develop structures and rulings that motivate and regulate such reformed institutions instead of being led by, and restrictively limited to, the boundaries developed by scholars who applied the principles of Shari’ah to their socio-economic atmosphere a thousand years ago! The richness of our Shari’ah lies in its ability to respond to changing circumstances and “modes of production” on the basis of its overwhelmingly powerful and universal principles and guiding rulings.