Al-iqtisad al-wasati: a finance vision for the ummah

This chapter argues that a fundamental factor in the Islamic banking and finance (IBF) sector’s resistance to structural change is its encapsulation within the conventional, self-contained narrative of the finance industry. To achieve authentic reform (islah-tajdid), it is crucial to integrate the IBF narrative with the Islamic economic vision. Employing Futures methodology, the chapter articulates a comprehensive future vision for the ummah, termed ‘Al-Iqtisad al-Wasati’ (AIAW). Section 1 examines the paradoxes of the current liberal market system, whereas Section 2 introduces the AIAW framework as a just alternative to the market system. Section 3 explores major trends, emerging issues, and current challenges in the finance sector. Section 4 aligns the IBF vision with that of the AIAW, emphasizing the desired future trajectory for IBF. The conclusion underscores policy initiatives that should be adopted within the next 10-20 years to progress towards the realization of AIAW.