by Nihal Javed

 Why Capitalism Failed?  Root of Global Financial Crisis  ISLAM – A Comprehensive Solution  ISLAMIC MODEL OF ECONOMICS  Conclusion  References

 Model based on greed: RIBA / Interest  Exploitation of resources to maximize profits  Societal benefit not considered  Welfare of a few elite at the cost of: ◦ Massive poverty worldwide ◦ Imbalance of wealth ◦ Lack of justice ◦ Spread of corruption  Irresponsible lending  Non – Production Based economy UNJUST SYSTEM BASED ON OPPRESSION OF THE WEAK

ARTIFICIAL MONEY GENERATION & EXCESSIVE GAMBLING

 What is Islam? ◦ Tawheed, Religion of all prophets  Prophet Muhammad PBUH  Quran: Instruction Manual from our Creator  Divine Guidance from cradle to the grave ◦ From Ibadah, Fasting, Pilgrimage, Economics, Business, to Marital relations, bathroom etiquettes  Applying Divine Laws and guidance ensures success in this life and the next ISLAM: A COMPLETE WAY OF LIFE

 Interest (RIBA) Forbidden ◦ “Allah has permitted trade and has forbidden interest” [Quran 2:275] ◦ “O you who have believed, do not consume usury, doubled and multiplied, but fear Allah that you may be successful.” [Quran 3:130]  Profit – Loss Sharing Model ◦ One party does not assume all the risk (like conventional) ◦ No reward generated w/out risk ◦ Leads to financers carefully assessing risk  Production Based Model ◦ Cannot generate money out of nothing (recycling money through interest) ◦ Promotes “real” growth of economy (Actual goods produced)  Prohibits gambling by third parties ◦ One of the main causes of Financial Crisis – Excessive hedging, speculation, gambling  Provides Implementable Solution ◦ Not just conceptual but practical and applicable ◦ Success demonstrated in History ◦ Commands transactions be sale / lease based (not imaginary) ◦ Products: Murabaha, ijarah, salam, istisna etc No Interest Profit Loss Sharing No Gambling Production Based

 Islamic Economic Model based on the Divine guidance ◦ addresses all the reasons why Capitalism failed  Implementation would ensure a just and balanced system that would benefit mankind as a whole  Solution to eradicating poverty, corruption, injustice  Islam is the submission to the Will of God Almighty  The complete way of live – Governs mans relationship with his Lord, and with other men  Insure yourself against Hellfire by accepting Islam and succeed in this world and the next! ISLAM: SOLUTION for PEACE, SUCCESS & JUSTICE

 “Islamic Finance: A Therapy for Healing the Global Financial Crisis” by Miranti Kartika Dewi1and Ilham Reza Ferdian 