ISLAMIC ECONOMIES : STABILITY, MARKETS AND ENDOWMENTS

ISLAMIC ECONOMIES
  • Book Title:
 Islamic Economies
  • Book Author:
Nafis Alam
  • Total Pages
137
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ISLAMIC ECONOMIES – Book Sample

Islamic Common Market an Alternative Model to Globalization

Abstract A step toward the formation of an Islamic Common Market (ICM) was taken to bring about a unity among the Islamic countries that would allow them to achieve sustainable economic progress. Among the Organization of Islamic Countries (OIC)’s prime objectives were to strengthen intra-Islamic economic and trade cooperation in order to achieve economic integration, leading to the establishment of an ICM (http://www.oicun.org/2/23/).

 An attempt is made in this chapter to analyze the possibility of the establishment of the ICM, which is the first step towards the reawakening of the Muslim ummah in strengthening the ties between Muslim countries by establishment of a Shari’ah-based trad-ing and commercial system, which would ultimately aim at creating a global market platform with cooperation towards furtherance economic prosperity in the globe.

5.1 AN OVERVIEW

The economic problems faced by several countries of the Islamic world call for a reformed economic structure to rebuild the economic backbone of the Muslim world. Thus, a closer look at the economic and business status quo of the Muslim world may reveal what had actually motivated the establishment of the Islamic Common Market (ICM).

The establishment of an ICM entails many dimensions and phases, including determining the comparative advantage of each OIC member state, selecting priority sectors, facilitating market access, determining a competitive policy conducive to a free flow of factors of production, and establishing an Islamic free trade area.

Sheikh Saud Al-Shuraim, imam of the Grand Mosque in Makkah, Saudi Arabia, called for the establishment of an ICM. In a 14 March 2008 sermon, the imam said the proposed market should follow shariah law, Arab News reported.1

A step toward the formation of an ICM was taken to bring about unity among Islamic trading countries so as to enable them to achieve economic progress. But after so many years, what has actually brought about this global awareness? Apparently, the September 11 attacks on the World Trade Center and the Pentagon. These tragic events might have been one factor behind the revival of an ICM.

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It was observed that, following these events, European countries united under one umbrella, the euro, establishing a common market for all European countries in terms of currency and of running their economies and managing trade-related issues on the basis of common interests.

The events also contributed to uniting non-Muslim countries and making them hostile toward Muslims. Muslims have been generally humiliated and blamed for the events and rejected by non-Muslim countries. Now their very existence is under threat.

To ensure their identity and lives and that they may live with honor, they must find a way to escape this unexpected humiliation and hatred. This must come about through intellectual effort using a peaceful and professional approach that does not result in harm to any living creature or damage to the wealth or property of others.

Hence, Muslim countries must use intellectual and strategic capacities to regain their rightful status. They can win over non-Muslims by means of their considerable intellectual prowess. But this is possible only if all Muslims are united. Thus, unity may lead to the effective establishment of an ICM. The Iranian deputy minister of commerce for planning and information, Muhammad Nahavandian, once commented that “to guarantee our political independence” we must gain “economic power and expand our exports.” He further commented that “Europe endeavored for 35 years to set up its common market, so the Islamic countries need at least 20 years to imple-ment their ambition of creating ICM.”

5.2 RATIONAL OUTLOOK OF ISLAMIC COMMON MARKET

Because of the continuous economic and political competition between Muslim and non-Muslim nations, the concept of an ICM, which was first proposed at the 12th Conference of Foreign Ministers of OIC in June 1981, emerged to meet a need to bring about the economic unity of the Muslim ummah through economic integration.

The main objective of the so-called Islamization of a common market is to provide complete banking, financial, marketing, trade, and other related systems necessary for the ummah to progress smoothly in its Islamic role, to furnish it with the essential powers and facilities for its proper functioning, and to clarify its vision and methodology.

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In a nutshell, the Islamization of a common market means an Islamic framework of transactions for human life and civilization. It informs all human activities, struggles, and actions from an Islamic point of view. The ICM aims to address problematic areas such as the following:

  1. Relation between economics and politics,
  2. Sovereignty,
  3. International society and order,
  4. Ideology,
  5. Specific operational issues.

Relation between Economics and Politics According to international relations, the objectives of politics are:

i.             To determine a framework for economic activity;

ii.            To channel economic activity in the directions necessary to best serve the interest of the dominant nations in their economic activities. On the other hand, the global economic system takes on certain features from advanced industrialized nations, which in turn leads to a transformation of the political system. In fact, in Western economic thought and politics, regional economic integration has been con-sidered as a means (to achieve political dominance) and as ends (greater material welfare). Therefore, the European Economic Community puts forth the following proposals:

            We should not think of achieving economic unity without political unity since these two are interdependent aspects of a general state of unity;

            To reinforce political unity, we need the help of a common basis of identity and a supranational axis of loyalty.2

Sovereignty

Although integration is very important to enrich the economic condi-tion of a country, it is not an easy task to accomplish because of extended dependence of each nation on its sovereignty. Economic cooperation is not far of that in terms of its importance.

An examination of the history of economic development of any nation reveals that economic cooperation has been behind whatever does not depend on politico-economic adjustment but the use of sovereign rights.

Since a dynamic society is continually undergoing change and the needs of society follow that path, economic integration helps to maintain the economic system by modifying existing elements and sometimes creat-ing entirely new ones. The emergence of the Organization of European Economic Cooperation (OEEC) was the fruitful outcome of such a process.

International Society and Order

In the era of globalization, no single society can gain economically without creating or seeking the help of other nations. The development or decline of one nation is a good lesson for others. The emergence of European security policy is the outcome of continuous threats from the East is an example.

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Ideology

Ideology is a set of frameworks on the basis of which a certain issue develops. In the case of ICM, the ideological base is important. If we really want to have a strong economic base, there should be no devia-tion of that particular ideology among Muslim countries. A proper Islamic ideology, totally based on Islamic values and principles, can bring perfect economic progress for the Muslim ummah. Since ICM involves ummah, it should implement Islamic ideology.

Specific Operational Issues

As mentioned earlier, the economic condition of a particular nation depends entirely on the availability of foreign capital; hence, the contemporary issue of ICM also depends on the formation of a free-trade zone. For the ICM to be successful, all Muslim nations should end competition among themselves, which is opposed to integration.

In the modern world, dominated by the West, the Muslim ummah should be united under one umbrella like the ICM,3 which can develop the ummah economically and politically. The ICM is being designed not only to help Muslims but non-Muslims as well. But the main problem with this program is that it is a gradual process that will take time to be implemented, mainly because of the geographical distances that separate Muslim countries. Regardless of these distances, we still badly need to show a unified Muslim ummah to safeguard the cultural, economic, and political identities of Muslims from the onslaught of globalization.

5.3 IMPORTANCE OF ISLAMIC COMMON MARKET:

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