 As-salamu alaikum dear respected viewers, welcome to another episode of Current Events, the program that takes an Islamic look at what's happening around the world. As always, I'm your host Ali Jasim. One of the more unique aspects of the religion of Islam is that it is a faith that encompasses all aspects of life, from the major to the minor, the macro to the micro. The Shari'a, or the body of Islamic religious law, covers not only acts of worship but also includes an entire construct for the ideal social order, including what kind of laws and principles should govern our economic interactions with one another. In the religion of Islam, laws are underscored by broader sets of values, and these are in turn derived from the Qur'an and the Sunnah. In the case of Islamic economics, the underlying value is our socioeconomic justice and equity, given that we have many countries and societies on earth that claim to be Islamic in one way or another. This raises an interesting question. When it comes to their economies, just how Islamic are they? Rahman and Askeri are two academics who set out to study and answer this complex question, and did so by selecting a broad sample of countries, establishing a baseline of specific characteristics and economic markers, and measuring these against generally agreed upon aspects of Islamic law and values. In their research, they highlighted a number of key ways in which Islamic economies should be distinct, such as having a greater emphasis on justice in all aspects of economic management, more honesty, the eradication of poverty, distribution of wealth and income, better social services, better treatment of workers, and even increased emphasis on environmental regulation. Using a series of standard measures, they created what they called the Islamic Islamic City Index, capable of comparing economies around the world and ranking them according to relative adherents to Islamic economic practices and values. What they found may surprise you. Malaysia is the first Muslim country to appear on the list, but its rank is 33rd, while the top ranking slots are dominated by European and North American economies. In fact, even when adjusted for a number of other possible variables, the study's authors found that Islamic countries continue to perform worse, unfortunately. In the end, although they emphasized that their findings are only preliminary, the authors concluded that their results show that Islamic countries are not as Islamic, at least in the realm of economics, as one might expect. Joining me to discuss these issues is the Imam of one of the largest Shia centers in the world and an expert in economy. Please welcome my guest, Sheikh Abbas Banju. Peace be upon you, Sheikh Abbas, how are you? First of all, we thank you for joining us here on Current Events on today's episode, which will cover the first in a series of episodes on Islamic economy. Now we all know that Islamic economy is a vast and open topic that cannot be covered in only one single episode, and therefore we have made a series of episodes. For today's episode, the first in the series, we will cover the effects of a true economic system and its evidence on a country. Can the standard of living for the general population be a proof of the good economy system or bad economy system of that country? Sure. When we come into the field of economics, you will find that the mannerism in which the health of an economy or the success of an economy is measured, there are multiple variables that are taken into consideration. For example, you will find that one of the avenues or one of the measures to measure the success of an economy. So when we are judging between an economy which is successful or not, the variables that perhaps we are able to use, according to a number of economists, would be one would be the level of output from the economy. What is meant by level of output from the economy would mean the ability of the economy, yani of the nation, when it comes to producing goods, where is it to facilitate trade. So generally, when it comes to determining those variables through which we are able to judge and distinguish between a successful economy and a non-successful economy, one of the variables that is measured is the output. How strong is the industry in terms of its production and its ability to produce goods? This is one measure. On the other hand, another measure which is used by economists when it comes to measuring the success of an economy is the general standard of living for the citizens of that state or the citizens if it is from that economy per se. So, yes, in regards to your answer the standard of living is a definite apparent measure for the success of an economy or the success of the economic policy being implemented by any given state. So usually economists have devised a formula through which they are able to some extent measure the success of an economy comparatively or in comparison to other economies that are there around them. And the measure through which an economy is measured is usually known as a GDP. So you have what is known as the gross domestic product. So the gross domestic product is basically it's a calculation of the monetary values of goods and services that are produced within that country over a specific period of time. And later that an annual level sometimes it is calculated at a quarterly basis. So generally speaking at a very simplistic level the gross domestic product known as the more famously known as the GDP. This is used as a calculation to measure the success of an economy and the GDP is made up of a number of components whereby the consumption within the country will be measured and then the government spending within that period is also measured. All the investments that were made within that country within that period are also measured. And then you have net export net export the amount of exports and the amount of imports. The difference between the exports and the imports are then calculated. And then this what is known as a net export together with the consumption and the investments and the government spending within that period together are added as a formula to measure the success of an economy within that period. So in regards to monetary value for value added products or value added to products when it comes to production you will find that this indicator is within the GDP. I want to clarify something to our dear viewers and that is what exactly are the standards of living. In regards to standard of living and what is the definition of standard of living and how a standard of living can be measured. Economists differ in their opinions. If we go back to the history of economics you will see that there are a number of principles and a number of philosophies that have been put forward by the thinkers in regards to measuring this concept. When you come within the teachings of Ahlul Bayt in regards to a successful economy you will see that measuring the standard of living is divided into two aspects. One which is materialistic and one which is non-material. When it comes to non-material these are intangible things that cannot be measured such as satisfaction. Human satisfaction with his condition of life in general emotions such as happiness and contentment are not measures that can be are not principles that can be tangibly measured per se. These are intangible measures however that can be monitored and that can be discovered and put together by way of statistics. This is for sure. However when you are looking at material measures for standard of living you will find that in regards to quality of life when you are looking at ability to be able to meet expenses. If the income is equivalent or the income is sufficient to meet expenditures is a person able to meet through his income the expenditures this could come under a variable from the variables for measuring standard of living. If you go forward up the hierarchy does the income which is earned by the citizen of the state does it surpass his expenditures which allows him for example to cater for savings. This is another measure or another variable that comes under measuring the standard of living. The quality of life in regards to availability of housing the type of housing that is there access to education access to progress in life for a human being to progress. Does the human being enjoy or does the citizen of the state enjoy freedom of speech freedom in political participation for example these are all aspects in regards to whether the state is satisfied with the political and economical landscape in his country or not if the policies that have been which are being implemented helps a person fulfill his basic material and non-material needs we use this scale in its entirety to to put together the concept of standard of living in that it's a measure of the quality of life and quality of life quality of life has to do with happiness and contentment both at a material level and a non-material level if we were to combine the first two questions we can come to the conclusion that a good economic system can fulfill the materialistic and non-materialistic needs and make people living in these countries satisfied and happy with their lives is that reasonable to say absolutely it allows the people to progress in their life as well standard of living or a comfortable standard of living and quality of life necessitates that the person is able to progress as well progress in terms of his wealth progress in terms of his psychology progress in terms of his spirituality so progress is an important part of measuring quality of life yes sheikh thank you for that how can we distinguish whether our country is applying a true economic policy before I answer this question my dear brother it's always it's also important for us to recognize the fact that economic policy can is generally not formulated as independent of political decisions the political policy of a country greatly dictates to a cell to greatly dictates the direction of the economic movement of that society or of that nation so these are two two sciences that in essence go hand in hand they're intertwined with each other when it comes to measuring the success of an economy you know there are certain variables within the economy that are seen as indicators which will be able to reflect to a great extent on the satisfaction at a very simplistic level of the citizens of that state so for example if I want to measure a successful economy or to compare between two economies or two states to see which one is economically more successful than the other there are measures such as unemployment unemployment is a big indicator and a good measure of whether economy successful or not unemployment is also means through which we are able to recognize the downfalls or the problems that a certain economy is is facing unemployment is a measure of how successful economic policy within a certain country is or not as you know if people are unemployed it leads towards poverty poverty absolutely without doubt all the intellectuals will tell you that poverty is an indication of dissatisfaction of the people yes Sheikh Abbas not only poverty the number of crimes in the countries will also increase as a result of unemployment Ahshantoum absolutely in fact crime is crime is instigated to a large extent due to unemployment and you will see that there is a core relationship if you were to look up through statistics countries that suffer from high unemployment are also the same countries that suffer from high rates in crime because there is a causality there's a relationship of causality between high unemployment and crime so if you were to be living within a country or to live within a city where there is high unemployment and they are high crime rates the citizens of that state or the citizens of that city are living in a state of fear you could say because of the crime and because of unemployment they are not able to meet their financial needs therefore again what we were saying in your previous question that between unemployment and high crime rate we're able to see that the quality of life or the standard of living for the citizens within that particular place would not be very high because of the discontentment and the difficulties that surround them at the financial level and at the social level due to the high crime rate so absolutely you are right that's that's a valid observation high unemployment leads towards crime it leads towards drug abuse in a number of countries there are studies that have been conducted that talk about and that show the causality between unemployment high unemployment rates and high usage of drugs because unemployment to a greater depression and the person tries to counter this depression by using drugs so coming back to your initial question unemployment is a great indicator as in regards to measuring the success of the economic policy or economic models employed by a certain country unemployment is one inflation is another inflation in regards to horizon prices for consumer goods there are certain times where the prices of basic goods within the markets have risen to such an extent such that the income being earned by the people by the working class within the work forces to meet their needs so you could say to a certain extent inflation is a measure of a successful economy and unemployment on the other hand is also the measure of a successful economy between unemployment and inflation you also have the ability the unemployment well obviously this would come under unemployment in regards to ability to produce so I think it is sufficient for us to say sheikhuna that unemployment and inflation are two good measures of measuring the success of an economy or the failure of an economy so in a brief we can say that the best evidence of bad economies unemployment which leads to crimes drug abuse which comes mainly from depression and also inflation is that correct yes my dear brother Ali this is these are good variables to be used as a measure of a successful economy thank you so much for that what do you think about Western economies that they have a successful economy or not and why sure when it comes to making a subjective analysis of whether or a definite analysis on regards to whether a certain or a particular country or group of countries are successful economies or not the answer most of the times is relative in that instead of being absolute in that when I'm deciding or trying to decipher between successful economies I want to compare between say four countries within the you within Europe I want to compare each country with the other or I want to compare European countries in regards to Middle Eastern countries so when we talk about whether Western economies are successful or not I would assume that the question is based on our Western countries relatively successful compared to for example economies within the East or economies within Africa in that sense the answer again there are certain aspects of an economy that show it to be successful and there are certain aspects of the economy that show that it is unsuccessful to a great extent however what we would share is that in regards to a Western economy if we were to categorize it as being successful it would be because a lot of the domestic policies in regard within these countries facilitate to a certain extent for the growth for the people growth of the people to provide people with the opportunity to succeed at an economic level I believe that perhaps the success of the Western countries to a great extent is because they have succeeded in this now as we are comparing Middle Eastern and Western economies and based on what you just have said in today's episode we can come to the fact that there are some issues with the Middle Eastern and African countries which do not exist in Western countries and is that why we might consider the Western economy to be much stronger and powerful than that of ours can we draw this conclusion or is there another point of view or analysis the question that you've asked the reality by the other has a lot of complexities attached towards it and you know again as we said in one of the previous questions is that the reality of the fact is that political decisions political economic policies sorry the reality of the matter is that economic policy cannot be judged or cannot be seen as being independent of political issues as well and political policy of when we are doing a comparative study between the success of economies between the East and the West or between African countries and Western countries you will find that one of the outstanding factors in regards to a failing economy within the Middle East and within Africa to a great extent is that the scale of corruption within the economy or within the state contributes towards the failure of that state so perhaps the economic policies that are put in place the policy as a policy might be a virtuous and the direction of that policy may be towards the enhancement of that economy and the well-being of the people but you find that the implementation of the policy is poor in that there is corruption within the political process there in within the political within the government itself many times you find that economic policy perhaps is formulated domestic economic policy will be formulated in order to serve the interests of others rather than the citizens of the state so when we are looking at comparative political success between Western countries and Eastern countries the corruption political corruption that is rampant unfortunately within the Middle Eastern countries and within African countries this is something that you cannot discount as a variable when you are successful when you are comparing between two economies so I would say to a great extent corruption is a major reason as to why the African or Middle Eastern countries are performing so poorly in regards to economy as opposed to Western countries obviously this is not just the only reason but it is one of many okay let's say we were an African country and we wanted to enhance our economic system can we just copy the system of the Western countries and implement the same system in ours sure in regards to copy pasting the structure of of Western economy and if we were to use that or if we were to import I think perhaps the suggestion or the idea is that if we were to import economic policies from within the West within African or Middle Eastern countries would that help us succeed again that you have it is the implementation each country has got its own strengths and each country has got its own weaknesses that make it unique when it comes to being a player within global economy so the idea is number one for a country to recognize its strengths in regards to its natural resources in regards to its foreign policy in regards to its domestic policy and structuring economic political policies that will facilitate for the growth of their people on condition that corruption is not a corruption is corruption is not tolerated within that country to begin with Sheikh Abbas in the Islamic economy theory what is the role of governments in regards to the livelihood of their people you know as you know my dear brother Ali Islam is Islam as a religion is an entire way of life Islam has solutions Islam as a religion gives us solutions to facilitate for the happiness and the success of mankind in both this dunya in this world as well as in the Akhira therefore you find within the teachings of Ahlulbayt you will find that there is a perfect political system in place you will find that within the teachings of Ahlulbayt there is a perfect economic system in place within the teachings of Ahlulbayt you will find you have the best practices when it comes to engineering when you come to Islam you will find that the teachings of Ahlulbayt have got the best policies when it comes to conservation of the planet for example you will find that within the teachings of Ahlulbayt you have the measures to a best family and social environment which a person needs in order to progress within this life and within the hereafter having said this when it comes to economic theory within the teachings of Ahlulbayt in light of the Quran and in light of the teachings of Ahlulbayt you find that the role of the government is to purely facilitate for the growth and the well-being of the citizens of the state in that the government according to the teachings of Ahlulbayt when it comes to formulating an economic policy or establishing an economy based on the teachings of Ahlulbayt the government does not have the right to own resources within that country that be who's which in essence belong to the citizens of that state so and the proof from that for example would be from the Quran where for example Allah or where Allah says within the Quran in Surah Al-Baqarah Bismillahirrahmanirrahim He is the one who created for you what is in the Quran Surah Al-Baqarah verse number 29 Allah has created everything within the earth for you Khitaab of Allah Subhanahu Wa Ta'ala Allah Subhanahu Wa Ta'ala in this Quran is addressing all mankind you know it is he Allah Azza wa Jalla who has created everything within the earth for who for the people Allah Subhanahu Wa Ta'ala didn't create these resources in terms of raw materials that are benefited through the earth for the government Allah Subhanahu Wa Ta'ala says all the natural resources that you have on the earth are created for mankind in their entirety so the government that does it within the teachings of Ahlulbayt you take for example the issue of oil within the teachings of Ahlulbayt oil as a natural resource is not seen as the exclusive property of the government Allah this goes against the Quran He who created for you for the entire mankind everything that is within the earth and everything that you can benefit from the earth so therefore the first thing is that within an Islamic economy as for the teachings of Ahlulbayt the government does not have the right to monopolize the natural resources that exist within that country for itself rather the job of the government is to facilitate the usage of natural resources in order to ensure that the citizens of the state are able to improve and increase their standard of living the job of the government through its economic policies is to ensure that it provides every citizen of the state an equal opportunity to earn and to increase his standard of living on the other hand the job of the government is to reduce as many bureaucracies and as many impeditions or impeditions there are towards trade to facilitate for the people to success in the reality the job of the government when it comes to regulating or monitoring an economy as for the teachings of Ahlulbayt is at a very minimal level the job of the government is more of managing and facilitating for the growth of the people and to provide the people with the opportunity to enhance their lives either through trade or through agriculture or through manufacturing industry thank you so much Sheikh Abbas may Allah bless you thank you you're welcome and once again thank you for having me on your show this concludes the first part of the series of Islamic economy be sure to tune in to the next series of episodes in which we will discuss in detail the Islamic economy we thank Sheikh Abbas Panjoo for joining us today and we thank you dear viewers for watching until next time waslam alaykum