A meeting under the banner Forum for Group Discussion on Economic Issues (FGDEI) commenced on 22nd March 2014 in Dawat Nagar, Okhla, New Delhi. This forum has been formed by Sahulat Microfinance Society in association with Radiance Viewsweekly in order to deliberate upon issues relating to Islamic economics, finance and banking. The meeting started on a welcome note delivered by Mr. Azim Hussain, Manager Operations & Research, Sahulat Microfinance Society. Dr. Ausaf Ahmad delivered a presentation on the topic of "Economic Development in Islamic Perspective Revisited". This presentation is based on a Paper that was presented in 2012 in Pune College, Pune, in an International Conference in collaboration with Institute of Objective Studies.

About 25 years ago a prominent Islamic thinker spoke of a challenge before the Islamic Ummah. This is the Challenge of Development. Dr. Ausaf referred to a paper written by Dr. Khursheed Ahmad, "Immediate challenges confronted by the world of Islam are the challenge of development. Restructuring its economy that is to commensurate with its idea of world role has to be logical with the idea of worldwide role of political Islam. Even after half decade the challenge remains same because of the bitter economy. The international economic organizational system has changed accordingly.

Dr Ausaf further elaborated that there was emphasis of the state intervention. At the other hand we have a conclusion that state can't make development on itself. It can't create development as inherent it was to. Development takes place at its own pace and through its own agents. In fact the students of economic history know that throughout the long period Britain was considered as mother of Industrial revolution and throughout that period it did not more than .3% per annum. If we compare this with the growth rate achieved by Malaysia, Indonesia and other countries which is 11% to 12% per annum. Our own country has grown at the rate of 7% in past few years. So when we compare this with the leader of free world e.g. Great Britain. We find that the difference is huge. In fact we can say that the map of development has been redrawn. The other thing is that the idea of catching up is no more as mesmerizing as it was once. If we look at the development plan of a number of countries we will find that they wanted to catch up with the US. The industrialised countries are developing at fast pace and gap between rich and poor nations is increasing. It was pointed out in the earlier of 20th century and if we compare that in term of trade between poor nations we will find that the trends were strengthen and the industrialised countries were their best buyers.

During the past 50 years or so after the demise of USSR the world become unipolar. It was multipolar before then and it was stable to predict changes and results. We can see if USA sends fleet of warships to some part of the world the trade union warns it or issues some notice to not to do this and it is not good for our own economy. But the world has become unipolar now. The US and its alliance have industrialized countries; they have achieved monopolistic situation in commodity trade, in technological trade as well as in economy.

The defeat of socialist system does not mean a victory for capitalist system which has its own problems. The problems of this capitalist system are skewed distribution of income and wealth, poverty, economic injustice, inequality of opportunities, high rate of crime, high rate of inflation. These are the few diseases of capitalist system.

Thus we have seen that the demise of socialist system does not mean a victory for capitalist system. One reason for the demise of socialist system and not making victorious the capitalist system is that both of the systems were devoid of any moral content. There is no morality either in central planning or in the free market. If and when a decision is taken to open production at one place then it does not mean that it is a moral decision but a pure technical decision at that time.

Now if we divert our discussion to the development in Islamic perspective, when Prof. M N Siddiqui prepared a bibliography in 1970 and presented in 1976 in first international conference on Islamic finance held in Makkah Mukarrama at that time he didn't find studies about relationship with the development to be counted and figured. It means economic development was and has been a neglected area in Islamic economics. Most of the attention was diverted on banking and Riba etc.

The Dr Khurshid Ahmad came up with the idea of development and with its holistic nature. Economic development activity is not merely economics. It has social end, it has market end and it is related to the development.

So the idea was more emphasized by Dr Khurshid Ahmad in his paper. He goes deeper and points out the Oneness of God (TAWHEED), Devine Providence of God (RUBIBIYAH) and said that these two are the main features of Islamic development concept. Tawheed is important because it unifies the whole thing into one and divine providence is utilization of resources created by God. The main criterion on which development is based is human experience must be evaluated that what it does to the lives of people.

Then Dr Khurshid identifies an Islamic strategy to the development. Now the point of concern is "Should that be an Islamic strategy or there should be several Islamic strategies of development?" This is the basic question now. That is to say that, "Can you prescribe a common strategy of development and that is for all the countries or you have to pick and choose and you have to say that there is one Islamic strategy for one country and there would be another Islamic strategy for another country and so on." Apparently different scholars have suggested different strategies. Dr. Khurshid Ahmad, Prof MN Siddiqui, Dr Umar Chapra, MA Rehman have come up with different ideas of Islamic development strategies.

Now we can submit that most of the strategies are nothing but tall orders requiring far reaching changes in political and economic structure. Since those changes do not come therefor we are in the atmosphere of backwardness. Now we can say that these ideas were merely an academic exercise and nothing else.

At this point of time it can be said that we have adopted rational approach. Nations and regions must be our guide and self-interest, sanctity of private property, profit motive and negation of parochial approach are identified as some of the development values. While Islam emphasizes an universal and human approach in all matters concerning human beings. It enjoins justice and fairness in human dealing. It encourages rational enquiry and freedom of action.

So these are the Islamic values on which we have to concentrate while thinking about a strategy of development in Islamic perspective. It may be argued that there is no inherent conflict between the values by Islam and the values required for development. But what we find besides this in the present world is that we are backward. If we look at the group of Islamic countries we will find that there are rich people and there are poor people too. The rich countries like Kuwait, Bahrain, Brunei and KSA where per capita income is much more than developed countries. But the fact is all this is a result of petroleum deposits which is all created by God. In result wealth is accumulated in these countries. Some of it utilized for income distribution, some of it has find its way to the poor countries but most of the finance goes to their riches and to their luxuries. Therefor what we have to find out here is the reason for apparent backwardness of Muslim society. It must be sought somewhere else not in values.

There was a sociologist Max Webber who thought that the Islamic societies are backward because of Islam. But he was not correct because there is no inherent contradiction between Islamic values and development values.

So the reason of backwardness should be sought somewhere else. It may be in mismanagement of economy, in political circumstances in the mismanagement of colonial rule etc.

The other thing which could be emphasized is scientific revolution. Development is earned through human experience. It must be evaluated and learnt in term of human experience. We can't go away from the way the world has gone. Therefor scientific revolution was another thing to happen. What happened at that time in our experience we closed the gates of the reasons of thinking? Since last 500 years no new idea hit the Muslim countries. This has happened to us after the era of Newtonian Scientific era. So our society and knowledge is based upon pre Newtonian science. Now we have to cover this gap and have to open the gates of knowledge on ourselves. We have to adopt our policies in such a way that these changes and developments must take place in the front of economics at advance stage not in phenomenal stage.

Another thing we can take about is the role of institutions and policies. There are four types of institutions in Islamic perspective. First one is religious institutions, second one is financial institutions, third one is Zakat institutions and fourth one is Awqaf institutions.

In past 25 years or so we can say that the idea of Islamic banking has come up in the Muslim countries. In last two decades or so two important institutions have emerged from Muslim countries. One is Tabung Haji in Malaysia and another one is Grameen Bank in Bangladesh.

Tabung Haji is an institution which is considered as a precursor for Islamic banks. Tabung means foundation and Tabung Haji is a Haj Foundation kind of institution. There is a tradition in Malaysia one can't marry until unless he or she has performed Haj. It is mandatory in their tradition. Now look at the economic aspect of this. People had land at that time. So to perform Haj they sell out their land to other person and once they sell it to other. It created changes in distribution of land and distribution of income as well. So the governmentt of Malaysia after their independence has come up with this Idea of Tabung Haji. The idea was a fund should be maintained in which people will save in order to go for Haj and the saving will be invested and income would be obtained through it. SO that way Tabung Haji has become a financial institution and it has branches all over the Malaysia. Tabung Haji has experienced the many of the tools of Islamic investment. Now it has several companies e.g. real estate companies, trade companies, financial institutions etc. So Murbaha, Mudharba, Musharka etc all the financial techniques of Islamic economics are being experimented by many of the Islamic banks are discovered by Tabung Haji.

Grameen bank in Bangladesh is another example. There is a very famous economist Mohd Yunus. He has attributed in development of Grameen Bank. It was started as a pilot project in very beginning in a small village of Bangladesh. It is not an Islamic institution but a conventional microfinance institution. Through this rural savings are mobilised and invested.

So in the conclusion we can come up with more comprehensive concept of the development. It is emphasized by the Islamic approach and a Muslim economist has traced the reasons of non-performance of Muslim countries in adoption of western models and in inappropriate strategies. They may be correct but nevertheless the point is that it must be modified. Lessons from history and ground realities must be taken into consideration.

The last thing of this discussion is development role of existing Islamic institutions. For example Zakah and Awqaf institutions can be modified to make it a modern institution and it should be brought out for the welfare of people. Some scholars have suggested that Mosques are not for worldly trades or worldly dealings and it is only a place of worship. So what we have to do here we have to change the perception of people and have to learn from the experiences of past sixty years.

The presentation was followed by the discussion of the participants.

Then Prof. Nejatullah Siddiqui was invited to provide his input and asked for his suggestions to decide the way ahead for FGDEI.

Prof Siddiqi said that one big issue is when we talk about such topics and elaborate on what Islam gives us in term of values and agendas. We also have to think the distance between what Islam wants and what Muslims perceive and actually do. One more issue is how to breach this gap. This is being debates since last 200 years with no clear solution inside. Somebody has to change the reality whether in Turkey or in Iran or in any other country. But unfortunately the desired state of affairs despite of Iranis and Urdagan we still look forward for something we still desire.

One more point should be emphasized here while talking about welfare and development we should emphasize and project the role of ideas. It has been known through experience and by analysis that the real things are not coming up. These real things are real virgin ideas. When we give new ideas to the institutions the institutions take us forward. The point is where do these ideas come from, and why fewer and fewer ideas have been coming to us from Muslim communities in the last 500-700 years when a lot of ideas came during first 500 years. What is missing in the environment of Muslim livings which is preventing new ideas taking birth?

Prof Siddiqi quoted a book named "Where Do Ideas come from" and said that the author of the book gave very interesting observations base on statistical analysis. If we forget about the invention of fire and wheel we can see that very few ideas have come from rural community. Most of the scientific ideas and recently bulk of them have come from very densely populated metropolitan cities like San Francisco, Delhi, Mumbai and New York. Actually there is a correlation between how large a city is and how many innovations and patents are coming from human population. What is the cause of this nobody knows.

The other thing is for idea to come and emerge and take fruit into producing institutions we need freedom. Freedom to think, freedom to express, freedom to discuss, freedom to put those ideas into action like somebody who came up with the idea of Tabung Haji and Mohd Yunus who came up with Grameen Bank. So these essential freedoms are required for taking birth of new ideas. An atmosphere is required where nobody is afraid of new ideas and nobody should chide you on expressing it. People should be encouraging and giving ears to listen.

Perhaps the factors to keep us backward as Muslim community are the false notion that there is nothing new to be said or known. All the good things are there in our past books and all the good things have been said by the past good men like Ghazali and Ibn Taymiah and so on. All we have to do is we have to learn from the books so much so that one must use his tongue, nose, ear and sixth sense in knowing the environment and learning it. And also in expressing it whatever he or she feels. One may be feeling afraid or thrilled or optimistic in putting those things in front of people.

It is the society bothered with fear of saying something wrong, doing something wrong, being punished for something new. Instead of a society which is excited and very keen to know very keen to learn something new and also very keen to welcome something new. Perhaps this is the thing which is missing from us from Muslim community.

Opinion is converging now that it is not material resources not even the management techniques but the new ideas which is missing is responsible for the backwardness of Muslim community. This is the reason that San Francisco has given the world much more than the whole continent of Africa in past few years.

Let's try to change the environment in which Muslim youth grows and then wait for something.

Let's change the environment and allow newly budding ideas to flower and hope for the best.

On the question of what could be the best way ahead for FGDEI for future Prof Siddiqui replied and said that he can refer to the event of Jeddah and what a group of scholars including Prof. Siddiqui was doing there over a period of time and everybody was agree that it is something useful they made it a must to meet even if there is no previously announced paper or lecture or topic of discussion. On the assumption that when a group of people will sit together, somebody will have some thought, or have read something or heard something to be shared and let them come together. If there is a pre decided topic then well and good otherwise just give a chance to everyone present there to say something and if there something comes up which is worth discussing immediately shift your discussion towards it. In doing so don't confine yourself to finance but anything. It may be about elections, candidates, corruption or it may be the role of state. The worst thing is to make a list of topics and rigidly following it.

Then the session was adjourned with vote of thanks to the participants and special thanks to Dr Ausaf Ahmad and Prof MN Siddqui.