This book is a collection of essays presented at a conference held inApril 1988 and organized by the Center of Near and Middle Eastern Studiesand the Law Department, School of Oriental and African Studies, Universityof London.Since the mid-I970s, there has been a significant revival of fundamentalIslamic values in several Muslim countries throughout the world. Indeed,a number of Muslim (or perhaps, Islamic) countries like Iran, Pakistan, andthe Sudan have recently taken practical steps towards the total Islamizationof their economic and financial structures. Among the basic characteristicsof an Islamic financial (banking) system is the prohibition of the paymentor receipt of a predetermined (fixed) interest rate which is viewed as usuryand thus prohibited. As an alternative, the Islamic financial system operatesunder the general principle of profit-loss sharing, which effectively transformsbanks into equity-based (investment) firms.As Mallat correctly points out in his preface, the Western notion of profitmaximization does not control the Islamic system. Rather, it is the Shari'ahwhich primarily governs Islamic finance. However, some contributors to thebook, notably William Ballantyne in his introductory chapter, appear to doubtthe feasibility of the Islamic system and its ability to operate in contemporaryeconomies. He argues that "what is required in today's climate, is [amongother things] a restructuring of the Shari'a to fit Western economic concepts"(p. 9-emphasis added).Nevertheless it is my belief, and perhaps the belief of many Muslimscholars in the field, that such a view is unacceptable, for it seems to bein direct conflict with the core of Islam. A basic tenant of Islam is that theShari'ah cannot be changed or restructured to satisfy other lines of thought.Indeed, voluminous contemporary research now exists that demonstrates theviability and relevance of pure Islamic teachings to today's complex economicenvironment. Examples of such research include Chapra (1985, 1991); Khan(1986); Habibi (1987); Darrat (1988); Darrat and Suliman (1990); and Darrat,Suliman, and Bashir (1991).The view that the Islamic economic system is superior to the contemporaryWestern interest-based economic system is not totally unique withMuslim scholars. Western economic thinkers have also shared a similar view.For example, prominent American economists like Henry Simon (1948) and ...
PARADIGMA KONTEMPORER EKONOMI ISLAM (Muh. Abdul Mannan versus Syed Nawab Haedir Naqvi)
