Al-Shajarah Journal of the International Institute of Islamic Thought and Civilization (ISTAC)
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THE LEGAL AND BENEFICIAL OWNERSHIP CONUNDRUM IN SOVEREIGN ṢUKŪK STRUCTURING
Get PDFThe past decade has witnessed the dynamics of ṣukūk structuring amidst legal complexities in cases involving enforcement of the rights of investors or ṣukūk holders in the event of default. This paper examines the legal and beneficial ownership in a typical sovereign ṣukūk structure and the specific rights of the parties under the existing practice and classical Islamic legal framework. The issue of public property often used in sovereign ṣukūk as the underlying asset of the transaction leaves much to be desired. Through a systematic content analysis, this study uses the qualitative legal research method to analyse a number of sovereign ṣukūk structures gathered from available ṣukūk prospectuses. The study finds that the nature of legal and beneficial ownership in ṣukūk transplanted from the conventional bonds structuring is different from the type of ownership envisaged in Islamic commercial law. It is found that the modern structure of ṣukūk products only allows for beneficial ownership to be conferred on ṣukūk holders, and this does not contradict any principle of Islamic law when one considers the true nature of beneficial ownership under common law. Though it literally falls short of a true sale in Islamic law in the event of default, a closer look of the legal structure reveals the true nature of beneficial ownership. The mere fact that ṣukūk holders can have recourse against the underlying asset justifies the conferment of true ownership. Nevertheless, the stakeholders may still need to consider the use of public property as the underlying asset of a sovereign ṣukūk. With the increasing interest of emerging economies in ṣukūk to meet their long-term financing needs, this study is expected to guide the global Islamic finance industry on Sharī‘ah and legal issues relating to sovereign ṣukūk
FOREIGN OWNERSHIP, EFFICIENCY AND SOLVENCY: ANALYSIS OF TAKAFUL FIRMS IN THE GCC REGION
Get PDFThe financial sector regulatory reforms undertaken by the respective governments of the GCC countries in recent years have liberalized their financial policies and encouraged the influx of foreign-owned firms participating in the Takaful market. This development among others has created a competitive environment for continuous growth and impressive performance of the sector. This paper attempts to examine the efficiency of foreign-owned, vis-à-vis, the domestic owned, Takaful firms while taking into consideration the financial soundness of each Takaful firm. Mathematical programming non-parametric data envelopment analysis (DEA) with range adjustment measures (RAM) are utilized for analyzing 80 selected Takaful firms operating in the region for a 4-year period (2009-2012). Subsequent investigation is conducted using non-parametric statistical measure (Mann Whitney U rank statistics) and latent growth curve modeling to determine the statistically significant differences between the two. Result shows difference in efficiency between the foreign owned and domestically owned Takaful firms in years 2010 and 2012 for the models that include and exclude solvency ratio respectively. The result is actually consistent with the proposition of the global advantage hypothesis which also clearly demonstrates that solvency ratio has moderating influence on the efficiency differences
ECONOMIC SECURITY REQUIRES MONETARY AND PRICE STABILITY: ANALYSIS OF MALAYSIAN MACROECONOMIC AND CREDIT DATA
Get PDFMoney is the common denominator for all economic transactions, and monetary economics provides a framework of analysis of the functions of money to measure their effects on monetary and economic systems. The Malaysia ringgit exchanged for RM110/oz of gold in 1970, however, the price of gold has increased to about RM4,700/oz. Accordingly, the value of one ringgit in 1970 has fallen to 2.3 cents in 2015 (=110/4,700), which represents a catastrophic collapse in the store of value function of money, during the 45-year period of the fiat standard. This paper investigates the affect of monetary theory and banking practice on the Malaysian economy through a full population analysis of money supply, GDP, interest rates and prices. The findings reveal that conventional monetary theories and policies have ensured monetary and financial instability. This research demonstrates that a decline in the value of fiat money due to an excessive supply of money as a result of aggregate deposit and loan interest in relation to demand, the effect of which is an exponential increase in prices over the long term. The social implication reveals that usury (riba) requires an economy to lower its standard of living through higher prices, to pay for interest (riba), so that wealth is confiscated through an exponential increase in inflation and transferred to the profit and loss statement of the fractional reserve banking system. The solution is to redefine money, not as a commodity, but as an instrument of transfer and apply an Islamic monetary theory of value to the medium of exchange, so that prices remain low and stable over the long term: economic security and sustainability requires monetary and price stability
ISLAM AND ENVIRONMENTAL PROTECTION: THE AWARENESS OF THE MALAYSIAN MUSLIM COMMUNITY
Get PDFHuman-induced environmental problems are cascading and increasingly affecting the ecosystem, human health and well-being. Human activities, awareness and habits are of paramount importance in remedying the current state of environment. The shaping of attitude, values, perception, commitment and practice of human beings necessary to preserve and protect the environment is closely associated with their belief, worldview, tradition and culture. Hence, religion plays an influential role in developing new patterns of behavior toward the environment. In the context of Malaysia, it is evident that the condition of the environment in Malaysia is worsening as the country continues to industrialize dramatically. As a country with over 60% Muslims, it is necessary to look at environmental preservation from an Islamic perspective. Therefore, this study aims to determine how knowledge and understanding of Islamic teachings of the environment is important. The subjects were 400 Muslim individuals across Malaysia who were randomly selected from different organizations, universities and companies. A web-based survey was conducted using an online collection method. The data analysis illustrated that Islamic environmental awareness has strong association or significant influence with environmental awareness and environmental protection. It specifies that the more Muslim communities in Malaysia are aware about Islamic environmentalism, the more they are aware of their own environment, and consequently, the more they are willing to protect it. Furthermore, the findings also indicate that environmental awareness is positively related to environmental protection. It stipulates that the greater the level of invironmental awareness, they greater the level of environmental protection
MATERIALISM, HEDONISM, SPIRITUALITY, AND SUBJECTIVE WELL-BEING: AN EMPIRICAL STUDY OF RISALE-I NUR (RN) READERS
Get PDFSince the Enlightenment, particularly in the West, the quest for happiness has been primarily sought through material consumption. Although global capitalism has been successful in producing more wealth, many studies reveal that more wealth and consumption have not increased human happiness. Muslim scholar, Said Nursi, has argued that this failure to achieve happiness is due to the adherence to hedonic and materialist values at the expense of spiritual and moral values. He links the success of the Islamic exegesis, the Risale-i Nur (RN) to its novel approach to happiness. The purpose of this empirical study is to determine whether pleasures of Paradise or true happiness are more likely attained with a life that focuses on good deeds, virtues and spirituality. We designed and conducted a comprehensive internet-based electronic survey among 1523 Risale-i Nur readers to test Nursi’s argument. The survey was designed to capture the values/goals of RN readers and their subjective well-being through over 100 questions. The survey included the Satisfaction with Life Scale, the Social Well-Being Scale, and the Aspiration Index as well as additional items that queried three additional domains of intellectual life, honesty and fairness, and aesthetical life. The study reveals that the more participants read the RN, the more they report the value of spirituality, fairness and honesty, family and friendship, intellectual activities, personal growth, aesthetics experience, conformity, altruism, and health. Conversely, the more they read the RN, the less they value hedonic pleasures, popularity and fame, money and material gains, image making, and fear and anxiety
THINKING FROM THE QUR’ĀNIC PERSPECTIVE
Get PDFThe Qur’ān is the main reference and source of knowledge for Muslims. It logically follows that understanding the concept of thinking should also be referred to the Qur’ān. Even though the word ‘intellect’ is mentioned 49 times in the Qur’ān, and there are hundreds of verses that urge Muslims to think, the theory of thinking from the Qur’ānic perspective has not been extensively explored to guide Muslim educators, curriculum designers and developers. Hence, this paper attempts to explore the concept of good thinking from the Qur’ānic perspective. It extensively examines verses of the Qur’ān pertaining to the intellect and thinking to come up with a theory of good thinking. From the analysis of the relevant Qur’ānic verses, the research found that the intellect is capable of rational and spiritual cognition as a result of applying critical, creative, ethical and spiritual thinking. Therefore, the research posits that good thinking from the Qur’ānic perspective is multi-dimensional; the dimensions are critical, creative, ethical and spiritual thinking. Furthermore, according to the Qur’ān, the aim of good thinking is to achieve wisdom. Hence, this paper also explicates the meaning of wisdom from the Qurānic perspective
PERSUASION AND COMMUNICATION CAMPAIGNS: OUTLINES OF A COMMUNICATION INTERVENTION STRATEGY FOR CROWD MANAGEMENT AT ISLAMIC HOLY PLACES (MASHA’ER) DURING HAJJ
Get PDFBased on an overview of over half a century of research on persuasive communication and information campaigns in the West and the assumptions and challenges of a successful communication and information campaign, the present paper basically outlines a holistic communication intervention strategy in the service of crowd management in the holy places (Masha’er). The objectives and characteristics of the strategy in general are described. Theoretical rationale and a prototype of a set of on-site messages for creating a communication ambience in the Arafaat area are also given. These particular messages aim at preventing crowd congestion around the mount al-Rahmah (Jabal al-Rahmah)
INTERPRETATION AND VIEWS OF QURANIC COMMENTARIES ON THE PLANET BASED ON AL-KAWKAB AND AL-KAWAKIB TERMS
Get PDFThis paper examines the occurrence of the terms al-kawkab (plural,al-kawakib) in the Qur’an and investigates the views of classical andcontemporary Quranic commentaries concerning the interpretationof the meanings of these terms. In general, the Qur’an usesal-kawkab as the singular term and al-kawakib as the plural term.The argument among Quranic commentaries concerning theinterpretation of the meaning of al-kawkab (plural, al-kawakib) inthe Quran revolve around whether it refers to either a planet or astar. Thus, this paper attempts to reconcile this contradiction in themeaning of al-kawkab (plural, al-kawakib) among Quraniccommentaries by considering the Arabic lexical sources as well asthe various Quranic allusions. The data collections involved libraryresearch based on the primary and secondary sources relating to theplanets in the solar system. After examining the views on the Quraniccommentaries, the authors conclude that the meaning of the termal-kawkab (plural, al-kawakib) in the Quran refers to a planet
SHARIAH NON-COMPLIANCE RISK AND ITS EFFECTS ON ISLAMIC FINANCIAL INSTITUTIONS
Get PDFThe objective of this paper is to provide the definition of shariah non-compliance risk associated with Islamic financial institutions (IFIs). Having a precise definition of shariah non-compliance risks is highly necessary for the purpose of developing a comprehensive risk management framework for an Islamic financial system. This study is conducted through a literature review on Islamic turath, regulatory provisions and existing academic journals on Islamic risk management. This paper provides an in-depth discussion on the major elements that trigger shariah non-compliance risks and hence affects the validity of Islamic contracts such as riba, gharar, taghrir, ghubn, etc. These elements of risk were identified as that emerging from the entire process of developing an Islamic financial product, starting from the structuring stage until the execution of the product in the market and hence cause severe both financial and non-financial costs to IFIs. This research may have someimplications to the Islamic finance industry in Malaysia, becoming a reference for Malaysian IFIs in structuring their own comprehensive risk management and internal control system and hence enhance the effectiveness of the shariah governance practice within the IFIs