International Journal of Economics, Management and Accounting
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ISLAMIC MICRO FINANCE DEVELOPMENT: CHALLENGES AND INITIATIVES
Get PDFEdited by Mohammed Obaidullah, and Tariqullah Kha
CONCEPTUALIZING A STRATEGIC FRAMEWORK OF SOCIAL RESPONSIBILITY IN ISLAMIC ECONOMICS
Get PDFIn developing Islamic economics as a discipline, its proponents have emphasized on religious and ethical postulations of its economic agents as the essential micro-foundation towards the realization of its normative goals. Nevertheless, recent debates have highlighted the growing frustration on the failure of Islamic finance in addressing ethical and socially responsible issues beyond the legal realm of SharÊÑah-compliance. Likewise, the survey of the literature concerning the multiple aspects to individuals’ motivations for the support towards Islamic finance has also revealed mixed results. While the religious aspect has been shown to be a primary concern among the users of Islamic financial services in numerous studies, economic consideration remains an essential component in such decisions and in many instances overwhelmed the normative dimension. Based on these observations, perhaps it is wise to reflect the applicability of Islamic economic theory in the context of the contemporary reality of the Muslim society. In the transitional state where the economic dimension remains as a dominant factor in individuals’ decisions, the crucial challenge is to reconcile self-interest motives with the social interest. One of the prospective means to reduce the potential conflict between the two can be found in the literature of strategic or instrumental theory of ethics. This paper seeks to discuss this issue from an Islamic perspective within the transformative paradigm of Islamic economics. The strategic framework of social responsibility is outlined based on a synthesis of the normative and positive dimensions of human instincts, the notion of falÉÃ, the moral and price filters of market and the theory of instrumental ethics. The paper argues that a strategic understanding of social responsibility issues and commitment is not in conflict with Islamic teachings. Nevertheless, it should not be taken as a theory independent of its normative foundation as normally construed in the Western literature. Instead, the strategic theory in Islamic perspective should be seen as complementary in nature with the normative underpinnings as the core, providing additional incentive and motivation for individuals to address social responsibility issues. Additionally, it has also been argued that these normative goals can be facilitated by the presence of an appropriate socio-economic environment. Recognizing that the notions of corporate social responsibility (CSR) and socially responsible investing (SRI) have been often celebrated as a force to tame the vigor of egoistic orientation under Western capitalism, similar ‘institutions’ can also be introduced in the context of an Islamic economy. This should provide additional economic incentive for businesses to address broader social, ethical, and environmental issues, and reinforce further the strategic understanding of social responsibility and its practice among individuals, businesses and the society as a whole
SUSTAINABLE ISLAMIC DEVELOPMENT: RECOGNIZING THE PRIMACY OF TRUST, IMAN AND INSTITUTIONS
Get PDFModern socio-economic writings on trust have contributed much to its understanding as an important element in studying human behavior in society. Recent literature on development studies has highlighted social capital as a term, which incorporates ideas of value and benefit embedded in social networking, while others have demonstrated trust to be very significant when studying the development of society and institutions. This paper will identify some fundamental assumptions of modernity which prevent the better understanding of trust as a human entity and consequently propose that Islamic ontology, not confined by any such assumptions, provides a greater understanding of the role of trust in society through the concept of iman. Analyzing qualitatively, through textual and contextual study of authentic Islamic ontological and epistemological foundations, the concept and the social functions of the essence of iman, with its relation to the human developmental paradigm of Islam, a dual phase model of Islamic development methodology is proposed. This model seeks to elaborate the multiple functions of iman at the individual, societal and institutional levels and then compare these with those of trust and social capital in modern thought. Hence the dynamic and interdependent nature of the Islamic development methodology will be highlighted and the function of trust will be located within the Islam-Iman-Ihsan paradigm. This sequential approach indicates the primacy of iman as both the foundation and the continuing core of all Islamic development upon which frameworks and institutions are to be built. As such iman is shown to provide the bonding fabric, which subsequently organically spawns Islamic institutions and which, in turn, bolster the level of iman in the society. Hence using this model, the reasons for failure of Islamic development can be located at both the foundational level and the institutional level in terms of failures of iman
Islamic Banking in Malaysia: Framework, Performance, and Lessons
No full textIslamic Banking in Malaysia: Framework, Performance, and Lesson
A Survey of Management from an Islamic Perpective
No full textA Survey of Management from an Islamic Perpectiv
ECONOMICS OF LIABILITY: AN ISLAMIC VIEW
Get PDFThis paper navigates through the civil liability legal theory in studying its economic effects. It aims at giving an insight of the Islamic system of liability. To do so, it begins with a brief introduction of what a liability system is through a glance at the experience of the United States in this regard. The American system of liability gives the courts a wide range of authority to assess the injury, which includes material, emotional, and loss of future income opportunity, and compensation that aims at not only granting the injured a recuperating sum, but also at deterring the injurer from such a behavior. The most serious economic outcome of the A system are: the grandiose uncertainty and unpredictability, and the huge amount of grants that represents high cost, and sometimes prohibitive, of liability. This led to long and cumbersome litigation, consumer profiteering, forsake of innovative ideas, and shortage of certain products and services. The Islamic system of liability centers on the materiality of the injury, both in its causality and in its outcome, and it provides a list of compensations. Accordingly, recognizable emotional harm is only the one that can actually be materially checked, and recognizable loss of income covers only that actually forgone income during the off work period caused by the injury. As life and parts of the human body are sacred and priceless, the I system leaves it only to revelation to define the amount of compensation for loss of life and bodily parts. The main economic outcome of the I system is its predictability and conservative amounts of compensation. The system also assigns a role for the society both in payment of the grant and in benefiting from the compensation.JEL classification: G22, K13, P59Keywords: Civil liability, Tort, Islamic tort and Islamic liabilit
MACROECONOMIC VARIABLES, EXCHANGE RATE AND STOCK PRICE: A MALAYSIAN PERSPECTIVE
Get PDFThe paper analyzes dynamic interactions among three macroeconomic variables (real output, price level, and money supply), exchange rate, and equity prices for the Malaysian case using time series techniques of cointegration and vector autoregression. In the analysis, we rely on variance decompositions and impulse-response functions to gauge the strength of the interactions among the variables. The Malaysian stock prices seem to be driven more by changes in domestic factors, particularly money supply. Specifically, we note that money supply exerts a positive effect on the stock prices in the short run. However, money supply and stock prices are negatively associated in the long run. We also observe the negative effects of depreciation shocks on stock prices. Other selected notable results are: the stock prices contain valuable information for future variations in macroeconomic variables especially the price level; currency depreciation is both contractionary and inflationary; the Malaysian monetary authorities seem to focus mainly on stabilizing the exchange rate; and the money supply seems to be pro-cyclical and inflationary. One important policy implication is that the monetary authorities should be very cautious in implementing exchange rate and monetary policies as they may have adverse repercussions on the Malaysian financial market.JEL classification: E44, G15Key words: Stock price behavior, Macroeconomic variables, Vector autoregressio