UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance

Going Back to the Basics with Islamic Finance

Madrid

 

Thoughts from Iraj Toutounchian’s Islamic Money & Banking: Integrating Money in Capital Theory

“In conventional economics, the place of man in society is ambiguous in that it (society) works as an instrument whose ultimate goal is consumption.  Islamic economics is designed to give man the dignity and status he deserves.  He is given the potential to enhance his spiritual life in parallel with his physical life.  Islam provides rules and regulations giving him the option to choose between vice and virtue.  Without this option, there is no way for spiritual elevation.  Unlike in the capitalist system, comfort and happiness come from both material and spiritual elevation.

Islam teaches us that life is a test: ‘Blessed be He … who created death and life, that He might try you which of you is fairest in work.’ (Quran 67:2)  Allah (SWT) endowed people differently and in many ways: in mental or physical ability, in material and social environment, in power, knowledge, wealth, and so on.  Some of these things an individual is born with; some are acquired by effort, and still others come from circumstance; but each individual is accountable to Allah (SWT) for all the ways in which he has been preferred over others.  “It is He who has appointed you vice-regents in the earth, and raised some of you in rank above others, that He may try you in what He has given you …”  (Qu’ran 6:165).  On the Day of Judgment, each individual will be held accountable for the way he lived his life, how he used his knowledge, how he spent his wealth.” (257)

“Only the Creator knows in absolute terms who we are and why He has created us.  For Muslims, the ultimate goal of man is to please Allah (SWT) by following His orders as well as His guidelines and recommendations.  Man, as vice-regent of Allah (SWT) on earth, is responsible to society as well as to himself.  He should understand the reciprocity of actions between individuals and society and, at every stage of life, he has an obligation to all societies and people who have made contributions to the present state of knowledge and technology.

The doctrine of vice-regency indicates that wealth is not an end in itself.  Material and spiritual comfort work as the wings of a bird to take him to the destined place.  The doctrine further implies that wealth exists to serve others and it is this balance between material and spiritual comfort that is one of the most valuable lessons to be learnt from Islam.

I am in complete agreement with the sentiments expressed by Professor El-Ghazali that:

‘At the same time, the responsibility of Vice-regency demands that people work and toil unceasingly to invest this wealth so that it will continue to increase until the Day of Judgment.  The work expected of Man is ‘the good work,’ the work which purifies the soul, upholds morality, increases charity, depends piety, and protects faith, body, mind, property, and progeny.'”  (El-Ghazali 1994: 46-7) (258)

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