Islamic Perspectives on Economic Development

Islam is both a religion and a way of life. Whereas Allah Sub'hanahu wa Ta'aala prescribed a set of acts of personal worship, He also gave a code of conduct for interaction among human beings. This code consists of permissible forms of transactions vis-a-vis the non-permissible. According to the Islamic faith, one is as much accountable in this respect as he is in matters of personal obedience to his Creator. That Islam offers some guidelines for development is, therefore, understandable. However, what does Islam have to offer in the area of economic development—the concept as well as the strategy? There is room for some argument here. This paper focuses on this subject. The existing thought on the subject developed in the background of a huge body of literature for both planned and mixed economies—the latter modelled on the capitalist pattern. It is, therefore, not surprising that the departure from the mainstream thinking took the form of emphasis on the moral and ethical dimensions of economic development [Ahmad (1980); Chapra (1993); Sadeq (1987)]. In other words, "economic growth along with development on the moral and social planes" defined the Islamic position on this subject. This paper offers a restatement of the Islamic position while, at the same time, staying clear of downloading "Islamic values" into the mainstream thinking. In Section 1, the existing views of conventional and Islamic economists about economic development are noted. In Section 2, the Islamic concept of economic development is re-stated with direct reference to the Qur'an and the Sunnah (sayings and practice of the Prophet SallAllaho `alaihay wasallam). In Section 3, the argument of the previous section is reviewed along with the critical subjects of role of government and financing of development. In Section 4, some policy implications are noted, with Section 5 providing the concluding observations.