ISLAMIC ECONOMICS METHODOLOGY PATTERNS OF REASONING AND THE STRUCTURE OF THEORIES

In fact, the Islamic economy is a framework that has been extracted from the axiomatic scripture revealed by Allah Almighty S.W.T (The Holy Quran) and religious practices established by Muhammad SAW (Sunnah) to study contemporary economic phenomenon as per Islamic commercial jurisprudence confronting issues like employment, treatment of property, money, production and distribution, taxes, loans, interest (Riba) stability of prices, equitable distribution, growth rate, productivity, consumption of goods and services etc. that make sure maximum benefit (Falah) in a society or at large to the humanity (Ummah). The Islamic economy is not really a new discourse on whether its roots have evolved since the early days of Islamic civilization. Discussions on economic issues from an Islamic perspective started early and have flourished in the Islamic golden age since. However, economic issues are mainly solved by different branches and schools of economics. This raises a wide variety of methodological issues and several problems have been central to methodological reflection concerning economics. However, not much research attempts have been done to survey the origin of Islamic economic thought and portray its evolution towards becoming a discipline in contemporary times with its own body of knowledge and methodology. Therefore, this study is likely to fill this gap and chart the future direction of the discipline will also be highlighted with some evaluations of the current state of the arts.

THE ISLAMIC ECONOMICS PHILOSOPHY AND APPLICATION REALITY IN THE EXISTING ISLAMIC ECONOMIC ACTIVITIES IN THE WORLD

Islam offers the complete code of human life. It is applicable in every sphere of life, whether business, service or any other occupations. Islamic Economic philosophy simply expounds or refers to philosophical activity within the Islamic paradigm. The main direction of Islamic philosophy provides a complete way of life based on al-Adl and al-Ihsan. The discussion on Islamic economic philosophy issues had started earlier and flourished when Muslim scholars dominated the world scientific development tradition. However, the economic issues are mainly solved by different branches and schools of economics thoughts. Therefore, this paper has an attempt look into the philosophical issues in the area Islamic economics and its comprehensive application in the existing economyall over the world. It is a purely descriptive presentation on the issues of Islamic economic philosophy. The study findings revealed that Islamic economic has a strong philosophical foundation where socioeconomic development can be done based on al-Adl and al-Ihsan. The study also concluded that al-Adl and al-Ihsan would be establish while economic life is directed by not only material motives but also consent of Allah and craving for happy eternal life in the hereafter.

THE ISSUES AND CHALLENGES OF SHARIAH HARMONIZATION OF THE CROSS BORDER TRANSACTIOINS: CONCEPTUAL REVIEW OF ISLAMIC BANKING INDUSTRIES

The paper aims to identify major’s regulatory challenges are facing in maintaining proper harmonization of Shariah rulings of Islamic Bank across the world in the cross-border activities. The study found that the Islamic banking is confronting challenges to make appropriate rules and regulations for making the common standardized mode of finance to cope up with present market demand for their customer with conventional counterpart base on the Islamic sharia principles. Particularly, in the arena of competing in the global markets and establish unique regulatory institutions for proper harmonization of Shariah rulings of Islamic Banks over the cosmos in the cross-border actions. The study recommends that policymakers are to pay attention to solve the above regulatory issues to face the existing challenges for the smooth financial operation in the future. JEL Classification Codes: G21, G24, L26, P51.

Institutional Governance and Its Role in Reducing Financial and Administrative Corruption in Islamic Banks Operating in The City of Hebron

The aim of this research is to identify the institutional governance and its role in reducing financial and administrative corruption in Islamic banks operating in the city of Hebron, and a questionnaire has been built to answer the study questions, as it was distributed to all workers in Islamic banks operating in the city of Hebron. The study concluded that Corporate governance has a major role in reducing financial and administrative corruption in Islamic banks operating in the city of Hebron, due to the Board’s enjoyment of competence, competence, independence, and integrity, as well as because Islamic banks maintain independent, impartial and effective auditing systems that achieve compliance with what Enhanced disclosure and transparency. The study recommended that the standards of corporate governance be strengthened in reducing financial and administrative corruption by activating the role of oversight within banks through seminars and training necessary to qualify employees in banks, and that banks support independent, fair and effective auditing systems to achieve compliance during the performance of activities Banking.

An Islamic Perspective on Governance

BOOK REVIEW AN ISLAMIC PERSPECTIVE ON GOVERNANCE, By Zafar Iqbal and Mervyn K. Lewis, Cheltenham (UK) and Northampton, MA(USA): Edward Elgar Publishing Limited, 2009, Pp. xvi + 368. ISBN 978 1 84720 138 6

Fraud Detection on Banking Industry in South Sumatera: A Study on the Role of Internal Auditors’

Internal auditors function is important as the first filter against fraud in the implementation of fraud detection in banking and financial industry. This study was conducted involving internal auditors at several banks in South Sumatera, Indonesia. Questionnaire was used to collect the data which was then analyzed using SPSS. The results indicate that the auditing expertise of supreme internal auditors do not suit the criteria of fraud detection. Therefore, it is concluded that the internal auditors in banking industry in South Sumatera are not ready yet for the implementation of fraud auditing.

Money Politics: The Problem of Good Governance in Ese-Odo Local Government Area, Ondo State, Nigeria

This study examined critically how money and gifts have been used to influence the electorates during elections in Ese-Odo Local Government Area of Ondo State. Politicians in Nigerian society, especially in Ese-Odo LGA seem to have their ways in forcing themselves into seat of power by manipulating the thought of the electorates thereby engaging them into vote-buying and vote-selling. The population for study consisted of 213600 citizens. The sample consisted of four hundred (400) respondents. Three research questions were raised for the purpose of the study. The data that were retrieved from the respondents were three hundred and ninety-eight. Descriptive statistics was used to analyse the data and one hypothesis was also tested. The study found out that using money and other gifts by the politicians to influence the electorates is one of the major reasons for bad governance in Ese-Odo LGA. The study concluded that money politics has brought a great setback to democracy and has hampered the development of the masses and that of the society at large. The study, there for, recommended that for there to be free and fair elections in the society, the electorates must be enlightened on the civic rights of the electorates so as not to get involved in money politics. This will enable the electorates to vote for any political aspirant of their choice. Electoral laws should be strictly adhered to, and any electoral officer who is involved in using the period of elections as a means of extorting money from the political contestants should be dealt with. However, any political member who is caught in the act of vote-buying should be severely punished according to electoral laws. By doing this, the masses will be able to secure their well-being and that of the generations yet to come for sustainable development.

Social Changes: An Islamic Sufi Approach

Change of the society begins with change and transformation of humankind. Human beings change is due to their educations in all respects of social customs, etiquette, organizational skills, and customs of ethical and occupational. Different ideas about the way to change people's opinion return back to human beings' notions. However, some believe that imbalance of forces in various classes of the society is the reason for revolutions and changes in. If a notion is rejected, then its tradition will collapse, and tradition-breaking starts. Because notion connects values to nature of objects and value them, and this credited value is known as a reality for human beings. Transformation starts when those notions that convert customs and habits to tradition, and then to institution start to change. Combination of old and new notions appears a synthesis of notion, and in the next step, the synthesis works as a thesis and reappearance of antithesis ends to revolutions and evolution of the societies. General rules of being are not specific to a particular science. Further, social pressures, evolutions, and revolutions comply with the laws of mechanics. Mechanical laws are highly adaptable to bring the forces and pressures into individual and social changes analysis. As empirical scientist discovered and described the mathematical rules of physical laws to analyze and study the physical and chemical phenomena; it is time to place that psychologists, as well as social scientists, discover the mathematical expressive rules within individual and interpersonal behavioral realms. Islam proposes the most important theory of social changes and evolution toward ethical promotion, and principally, though considers class differences and conflicts regarding the issues of interest, wealth and materialism, but enlightens people that all these affairs are just credited and should not be emphasized more than necessary. Birth of a human being is birth of a thinking force that regarding the average intelligence and norms condition of human society, can solve his problems, and among the born based on the probability distribution functions, some are with very high IQs who can initiate large changes in larger societies. Instead of inhibiting population growth, raise a population reform agenda. Therefore, considers special rules dealing with male-female relationships and marriage.

Public Administration: An Islamic Sufi Approach

Along with comparing public administration affairs in traditional political, genuinely religious, patrimonial, and charismatic systems, we deal with decision-making problem, and along with mentioning decision-making methods in modern mathematics, the decision making process on the basis of personal value system will be under considerations. If the human beings’ value system moves from caring material affairs towards concerning spiritualties, the consequences of decision-making process would be improved. In establishing management and making hierarchical organization, the more the rate of discipline and ration, the organization framework would become more consolidated. The basic skeleton of an organization includes division of labor, authority, and responsibility, hierarchical relationships of different job categories in the organization, and the qualifications of relationships are of the other items that are being considered in this paper. Mutual understandings and beliefs of members of the organization in approaching organizational goals and their moral commitments to preserve organization's benefits would reduce the costs of supervision and control in organizations including visible and invisible costs, and methods for providing these conditions in Sufism are achieved via purification of the self for every single of the individuals. Meritocracy and favoritism are other discussed topics in this paper. In conclusion, fifty rules for public administration affairs are presented which have been raised by His Excellency Haj Zein ul-Abedin Shirvani, a Sufi Master of two centuries ago.

Interest-Free Treasury Bonds (IFTB)

Purpose: Although the treasury bill is the most important monetary instrument in central banking, its application in different phases of the business cycle, especially in a liquidity trap, is not working well. To remove this obstacle “Interest-Free Treasury Bond” (IFTB) is introduced as a substitute for conventional treasury bills. Design: IFTB is a valuable paper which is issued by government treasury through a barter contract and is sold to central or commercial banks. The issuer is a debtor to the holder and has to pay back the nominal value at maturity; in addition, the issuer is committed to lending a similar amount of money to the paper holder for an equal period. Zero interest rate is nominated for lending and borrowing. Finding: IFTB is a zero-coupon, asset-backed note with no interest and is designed upon “debt equal to future loan”, or “loan equal to future debt” with “time-withdrawal right”. The paper holder can supply and transact her bond in the secondary market at a competitive price. Practical implication: It can be used as a substitute for conventional treasury bills. All conventional and non-usury systems can implement IFTB. JEL: E43, E44, E52, E58, E62, E63