Islam and economic development

(Javed Iqbal Saani, Islamabad)

Economic development deals with economic welfare of human beings. Islam has the same agenda in addition to the eternal success in the Hereafter. Economics concerns with production and distribution of products and services i.e. generation and distribution of wealth. Wealth is the instrument of satisfaction of human needs and wants, economies discusses the way of creation of wealth and its equal distribution so that people can use it for satisfying their needs. Islam also guides the humanity how to create wealth and share with each other. The emphasis is on justice for both creator of wealth and those who share it.

Micro economies are concerned with factor of production: land, capital, entrepreneur and labour. In other words, anything can be produced ∕manufactured with the help of these factors. Islamic teachings allow ownership of personal wealth including land and capital. Entrepreneur and labour are also recognized and praised. In other to share personal wealth the system of Zakat and Usher are in place. It can be augmented with volunteer payments or Sadaqat. An entrepreneur can pay them to the needy people of the society where he lives. He can hire some of them which helps them to finance themselves. It creates economic activity. The production of land is subject to Usher or a kind of tax that government collects and spend on the welfare activities of people. The volunteer contribution of individuals and organization are utilized similarly.

The mechanism was put in practice by Syedna Umer (R A) the, second caliph. His government was well-known for welfare activities and he established a welfare state in the shorter possible period of time. His subjects were well off. There were very few people left who deserved Zakat. He was paying stipends to widows, orphans and poor people. Business activities were encouraged, trade with neighbouring countries flourishes and economic activities were booming. Equal distribution of wealth was made possible through the system of Zakat and Usher. Employment was provided to the masses because the primary employer was the government.

Moreover, economic policies were put in practice. The system was not as advanced as it is today. For instance, the central bank of any country defines mandatory and fiscal policies for equal distribution of wealth these days. Nevertheless, at the time of Syedna Umer (RA) all that was achieved.
Islamic state had another resource of income. i.e. booty of war. There was rapid expansion of Islamic state at the time of Syedna Umer (R A) because many wealthy countries fall under his government which were new sources of tax in addition to the booty. However, his own life was very simple. He did not have any palace, office or any premises. Therefore, government expenditures were nominal. All economic decisions were made in the masjid. He was receiving bare minimum for his sustenance. Corruption did not exist. The government establishment was not consuming national resources; government resources were spent on the public affairs. However, he used to pay reasonable salaries to government official in order free them from economic worries. Like Chief justice was one of the highly paid official. Syedna Umer (RA) also started to pay salaries to soldiers on regular basis. The outcome was prosperity, justice and peace in the country which spread over 22, 00000 miles. It can be done today provided same system is implemented in any country, anywhere in the world.

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