Page 58 - CMA Journal (Mar-Apr 2025)

Pakistan’s Economy Focus Section

is Islamic by Law

— It Must Now Become

Islamic in Practice

The science of economics deals with production, cost of activities. A sharp and
production, productivity, distribution, consumption, deep examination of
growth rate, profits, etc. Every individual, organization, Riba (interest) would
and country is engaged in all these economic activities in conveniently reveal that
pursuit of prosperity. However, some achieve the desired interest, loan, and
results while others fail. Basically, it’s the distribution of prosperity have a very
scarce resources to minimize the gap between limitless close relationship.
demand and restricted supply through economic Interest by itself is a
competence. The amount of success depends upon the non-entity but is an
level of morality in dealing with economic factors. Moral outcome of some
values prevailing in society automatically bring a high situation—generally
level of success. A society with a high moral code would borrowing or investing Syed Shamim Ahmed, FCMA
not cheat or lie while dealing in their business affairs. — a price/rent/ fee for Former General Manager Finance
Japan, for that matter, regards ethics as the most usage of money. The Karachi Port Trust (KPT)
important factor while running their trade. During their rate of interest would
business practices, they do not lie, never cheat, give vary depending upon the “value” of money, which could
respect, avoid arrogance, and demonstrate utmost be high for a poor person and low for a rich one. For
responsibility. This has created a high level of trust and example, rupees ten thousand carry high value to a
confidence, built strong business relationships, and won person earning fifty thousand a month compared to a
them growing affluence. Similarly, all other countries person who receives five lacs a month. For one, the same
with soaring economic standing display high integrity amount of ten thousand is twenty percent of his monthly
standards besides hard work and sincere leadership. income, but just two percent for the other. Similarly, a
developing country attracts more value to money,
Islamic commercial jurisprudence provides a detailed set
causing interest rates to be high. On the other hand, a
of rules and regulations for conducting business practices
developed country can afford to keep the interest rate
under the principles of Islamic dogmas deduced from the
low for obvious reasons. With such a nature of interest, it
Quran and Sunnah. These Islamic laws generally lay down
is harsh on a poor borrower who takes money to meet
moral norms and values with certain key principles of
some essential expenses at high rates with stringent
fairness, justice, and avoiding exploitation, and specific
conditions, but kind to a rich borrower who takes a loan
prohibitions of—Riba, gambling, uncertainty, hoarding,
generally for expansion at comparatively low rates with
bribery, backing out from contracts, unfair pricing, trading
soft terms due to his repayment capability.
in prohibited products, etc. It may be observed that except
Riba and Zakat, all other principles of Islamic trading are
generally in line with traditional Developing Countries Developed Countries
business ethics, as all these are
Country Interest Per Capita Country Interest Per Capita
founded on universally accepted
Rate Income Rate Income
virtuous moral tenets. Even the
Venezuela 59% $4,000 KSA 5% $30,000
concepts of Riba and Zakat
Zimbabwe 35% $2,500 Qatar 5% $87,000
prevail indirectly in high-moral
non-Muslim societies, as every Turkey 50% $15,000 UK 5% $54,000
Islamic ordainment allures to the Argentia 32% $13,000 USA 5% $66,000
welfare of humanity as a whole. Egypt 28% $12,000 Japan 0.5% $43,000
Riba (interest) has always Ukraine 13% $15,000 Sweden 2% $58,000
remained a center of deliberation Kenya 16% $4,000 Denmark 2% $47,000
due to its importance in business Pakistan 12% $1,500 Switzerland 0.25% $70,000
56 ICMA’s Chartered Management Accountant, Mar-Apr 2025