Globalization & a Universal Approach

Islamic economics is also taking note of globalization and its far-reaching implications. Earlier the focus was on the national economy. How Islamic economic system works in a closed economy and how a country can transform its fiscal and financial system in accordance with Islam, have been the subject of a large volume of literature. Now more and more attention is being paid to international economic relations. The financial system in any one Muslim country has to interact closely with the rest of the world as movements of capital and flow of financial information is beyond control of national governments. The need for a global approach to reforming the financial and monetary systems so that they are freed of interest and gambling is being realized.

The increasing uneasiness with mainstream economics which failed to meet the ecological and environmental challenge is also having some impact on Islamic economics. As Islamic economists pay more attention to global economic issues they become more aware of the fact that the entire humanity must join hands to deal with them.

The net result has been to draw Islamic economics closer to focusing on the practical problems of the day, those facing the Muslim people as well as those facing the entire humanity. The issue is no longer to establish that Islam has an economic system distinct from Capitalism and Socialism. That is a thing of the past. Then, to expound the superiority of Islamic system over other systems does not seem to be the most important thing to do when almost all Muslim countries and communities are beset with poverty, unemployment, disparities, indebtedness, etc. It seems more rewarding to participate in the universal search for ways of restoring the ecological balance, preventing environmental disasters, lessening conflict between peoples and designing a sane and stable monetary and financial system more conducive to justice and equity. It is in projecting Islamic teachings with the potential of contributing in this task that the future of Islamic economics may lie.

Simultaneously Islamic economists have to promote the application of Islamic economic precepts in Muslim societies and use Islamic economic concepts in making an agenda for Islamic economic reform for specific Muslim countries.

Even though the two tasks seem separate and independent of one another they are in fact closely inter-related. Firstly, it is only in the context of a global approach that a realistic agenda for reform and progress of any specific Muslim country can be drawn. Secondly Islamic economic contribution to the universal search for viable solutions to modern man's economic problems can be credible only when Islamic economics makes visible progress at home.

Source: Dr. Muhammad Nejatullah Siddiqi, Economics An Islamic Approach. Republished with permission.