Islamic Economy System

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Islamic Economy System
BOF Y2S2 2 PFS 2253 ISLAMIC FINANCE

• Prepared by
• Nuradli Ridzuan Shah Abdullaah Jalil

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Chapter Outline

• Definition
• Al-Falah Maximization
• Islamic Economy Philosophy
• The Objectives of Islamic Economics
• Basic principles of Islamic Economics
• Islamic Economics Structure
• Special characteristics of Islamic Economics

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Definition

• Islamic Economics as a science on how to consume
  and manage resources for self interest, society
  in order to get the bessing of Allah - Hailani
  Muji Tahir
• Importance characteristics
• Akidah
• Self interest could become priority as long as it
  do not affect the interest of the society
• The objectives of Islamic economics is to get the
  blessing of Allah

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Al-Falah Maximization

• Al Falah maximization is to get the blessing of
  Allah as compared to Conventional economics which
  is to maximize profits.
• Just profit instead of max profit
• The inclusion of reward and sin
• Al-falah also means the success in this world as
  well as in the hereafter.

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Islamic Economy Phylosophy

• The concept of Tauhid (Oneness)
• The Concept of Rububiyah (Allah is the Greatest
  Creator)
• The concept of Tazkiyyah (Purification)
• Judgment day
• Man as the Khalifah (Trustee)
• Equality and Brotherhood
• Ownership Concept Man as the trustee
• Normative and positive economy

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The Objectives of Islamic Economics

• Economics stability for individual, society and
  country
• Necessity
• Optimum Resource Usage
• Fair distribution of wealth
• Uphold individual freedom
• Equal rights and opportunities
• Justice and cooperation

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Basic principles of Islamic Economics

• Individual liberty
• Right to property
• Economic inequality with natural limits
• Social equality
• Social security
• Wider circulation of wealth
• Prohibition of accumulation of wealth to certain
  group
• Prohibition of anti-social institutions
• Social and individual welfare

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Islamic Economics Structure

• Politics/Public (Siasi)
• Business/ Private (Tijari)
• Social/ Voluntary (Ijtimai)

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Special characteristics of Islamic Economics

• Resources Trustee
• Islam approved personal property ownership but
  public interest exceeds individual interest
• Al-Taawun (Cooperation)
• Property as a productive resource and not selfish
  end
• Public ownership for certain industry
• Taqwa (fear of Allah) to avoid oppression, fraud,
  unlawful profit, discrimination

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Thank you