Riba, Share-tenancy and Agrarian Reforms

Land tenureship may take the form of self-cultivation, contractual workers, leasing and partnership. This paper focuses on the last one known as muzara`ah or share-tenancy. After clarifying what riba stands for, it reviews the misgiving about share-tenancy as a case of riba. It also argues at length in favour of share-tenancy as a legitimate mode of land tenure in Shari`ah. Finally, it also draws attention to some reforms to ameliorate the negative aspects of share-tenancy arrangements currently in vogue.

Islamic Perspectives on Economic Development

Islam is both a religion and a way of life. Whereas Allah Sub'hanahu wa Ta' aala prescribed a set of acts of personal worship, He also gave a code of conduct for interaction among human beings. This code consists of permissible .forms of transactions vis-a.-vis the non-permissible. According to the Islamic faith, one is as much accountable in this respect as he is in matters of personal obedience to his Creator. That Islam offers some guidelines for development is, therefore, understandable. However, what does Islam have to offer in the area of economic development-the concept as well as the strategy? There is room for some argument here. This paper focuses on this subject. The existing thought on the subject developed in the background of a huge body of literature for both planned and mixed economies-the latter modelled on the capitalist pattern. It is, therefore, not surprising that the departure from the mainstream thinking took the form of emphasis on the moral and ethical dimensions of economic development [Ahmad (1980); Chapra (1993); Sadeq (1987)]. In other words, "economic growth along with development on the moral and social planes" defined the Islamic position on this subject

Riba, Share-tenancy and Agrarian Reforms

Land tenureship may take the form of self-cultivation, contractual workers, leasing and partnership. This paper focuses on the last one known as muzara`ah or share-tenancy. After clarifying what riba stands for, it reviews the misgiving about share-tenancy as a case of riba. It also argues at length in favour of share-tenancy as a legitimate mode of land tenure in Shari`ah. Finally, it also draws attention to some reforms to ameliorate the negative aspects of share-tenancy arrangements currently in vogue

Dynamics of Growth, Poverty, and Inequality in Pakistan

The relationship between growth, inequality, and poverty has been a moot point. On the one hand growth is considered central or the best course to reduce poverty (e.g. World Development Report 1990) with the preconditions that access to education, health, and social services are available to all by means of other policies. On the other hand, there is a realisation that growth, inequality, and poverty relations are non-linear, complex, and path dependent in their dynamics. An important point made in this context by Kuznets (1955) was the empirical finding of an inverted U (arch) shape relationship between growth and inequality which suggested that the inequality would increase with growth in the beginning, but will decline at higher levels of growth as the benefits of growth trickle down to lower income strata. This argument has been debated since then in the literature with empirical support gathered for and against this hypothesis. Recent theoretical literature on the issue tries to find the micro-foundations of the dynamical relations between these three variables (see for example, proceedings of the 5th ABCDE Annual (World) Bank Conference on Development Economics). Institutional factors do not change in a few years while they matter in the reduction of poverty as well as in sustaining it at low levels. Hence these relationships are likely to be non-linearity and path dependent, i.e., history matters in the determination of the impact of growth on poverty, of growth on inequality, of inequality on poverty etc. Therefore an understanding of these relationships require knowledge of both the short-run as well as the long-run elasticities of poverty. The method developed by Kakwani (1993) and Kanbur (1987), make use of single survey and provides information on the short-term elasticities but remain silent about longer term relationships between poverty, growth, and inequality.

The Divine Will on Riba

The "Divine Will on Ribā" means what Allah SWT desires the believers to do through His dislike, condemnation and prohibition of ribā in the Qurãn. This study investigates this matter. It represents a departure from the dominant tradition that focuses on what ribā is. Methodology of analysis is explained at the outset. Data from the Qurãn are reproduced. A preliminary conclusion is first drawn as to what the Basic Edict on ribā in the Qurãn is. That is then refined by closely examining the communication style in the Qurãn and bringing into the picture the Sunnah of the Prophet SAAWS traceable to selected Aḥadīth on ribā. Final conclusion on the 'Divine Will on Ribā' is this: all loans, debts and similar other exchanges must be settled on an equal basis (in terms of units of the object of exchange), and there should not be even an indirect violation of this principle. The study also explains the ḥikmah (Divine Wisdom) and practical implications of the Divine Will

Islamic Perspectives on Economic Development

Islam is both a religion and a way of life. Whereas Allah Sub'hanahu wa Ta'aala prescribed a set of acts of personal worship, He also gave a code of conduct for interaction among human beings. This code consists of permissible forms of transactions vis-a-vis the non-permissible. According to the Islamic faith, one is as much accountable in this respect as he is in matters of personal obedience to his Creator. That Islam offers some guidelines for development is, therefore, understandable. However, what does Islam have to offer in the area of economic development—the concept as well as the strategy? There is room for some argument here. This paper focuses on this subject. The existing thought on the subject developed in the background of a huge body of literature for both planned and mixed economies—the latter modelled on the capitalist pattern. It is, therefore, not surprising that the departure from the mainstream thinking took the form of emphasis on the moral and ethical dimensions of economic development [Ahmad (1980); Chapra (1993); Sadeq (1987)]. In other words, "economic growth along with development on the moral and social planes" defined the Islamic position on this subject. This paper offers a restatement of the Islamic position while, at the same time, staying clear of downloading "Islamic values" into the mainstream thinking. In Section 1, the existing views of conventional and Islamic economists about economic development are noted. In Section 2, the Islamic concept of economic development is re-stated with direct reference to the Qur'an and the Sunnah (sayings and practice of the Prophet SallAllaho `alaihay wasallam). In Section 3, the argument of the previous section is reviewed along with the critical subjects of role of government and financing of development. In Section 4, some policy implications are noted, with Section 5 providing the concluding observations.

Riba, share-tenancy and agrarian reforms

Land tenureship may take the form of self-cultivation, contractual workers, leasing and partnership. This paper focuses on the last one known as muzara`ah or share-tenancy. After clarifying what riba stands for, it reviews the misgiving about share-tenancy as a case of riba. It also argues at length in favour of share-tenancy as a legitimate mode of land tenure in Shari`ah. Finally, it also draws attention to some reforms to ameliorate the negative aspects of share-tenancy arrangements currently in vogue

Strategy for the elimination of Riba with special reference to existing debts

This paper explicates the methodology followed by the Prophet SAAWS for elimination of riba during his lifetime, with reference to the Qur'an and the Hadith. It then draws inferences for a strategy that may be followed for elimination of riba with special reference to Pakistan. It also states specific measures as well as line of Pakistan for Islamizing the banking, including how to handle the issue of existing debts

Towards a theory of aggregate output, income and economic inequalities determination in an Islamic economy

This paper builds a simple macroeconomic model for a closed Islamic economy. The model focuses on not only determination of aggregate output and income (as in conventional macroeconomics) but also the determination of inequality in the determination of aggregate disposable income between the poor (the have-nots) and the rich (the haves). Policy multipliers are also calculated. On the economic policy side, the results establish that Islamization of an otherwise non-Islamic economy through the introduction of zakah, will lead to increase in aggregate output and income but the end result may be either way for the degree of income equality