Proposal for a New Economic Framework Based on Islamic Principles
This book provides a socioeconomic framework that is in conformity with Islamic principles.
The book analyzes capitalism, socialism, mixed economy and the Islamic economic system. It proposes an economic framework with special focus on fiscal reforms, and discusses:
- Potential of Zakat to meet fiscal needs of the government;
- Monetary reforms that would encourage savings, check inflation and manage liquidity in the banking sector;
- Managing balance of payments and exchange rate stability in an interest free economy;
- Currently practiced Islamic banking and finance;
- Role of institutions;
- Comprehensive mechanisms to meet the needs of a sophisticated, contemporary financial system;
- Feasibility of microcredit as an alternative for interest-based microfinance;
- Handling potential obstacles such as lack of trust, funding commitment, lack of collateral arrangement and lack of documentation.
The book recommends introduction of options in mortgage financing, modified roles for banks entering into a Mudarabah contract, changes to generate employment and productive activities in the economy, reforms in equity markets and alternatives for insurance.