ET: LONDON: With the strengthening of democracy in Pakistan, calls for building an interest-free economic system are increasingly gaining traction. As the debate on public sector borrowing intensifies in the wake of the recent budget and the government’s successful conclusion of a US$5.3 billion facility from the International Monetary Fund (IMF), it would be helpful to look into Shariah guidelines for both spending and borrowing.
First let us look at the Shariah guidelines for expenditure. Monzer Kahf, an Islamic economist, lists three areas that early Islamic governments traditionally spent on: defence, judiciary and what was known as society’s management, under which internal social/tribal affairs and foreign relations were included. Social goods, such as health, education, drinking water were provided through Auqaf, or charitable trusts.
Therefore, according to Shariah, if Pakistan limits itself to the provision of defence and internal security, judicial sustenance, and the running of national politics and international relations, a lot of expenditure that the government incurs could either be shifted to the private sector or the not-for-profit sector.
Categories: Asia