Islamic Economics and Finance

Paradigm Of Intergration-Interconection In Islamic Economics (Indonesian Language)

by Ali Muhayatsyah

This paper is presented in the course of Islamic Studies Approach with lecturers Prof. Drs. H. Akh. Minhaji, M.A., Ph.D. At concentrations of Shariah Finance and Banking, Graduate School UIN Sunan Kalijaga Yogyakarta.

Ide sentral yang membatasi ilmu ekonomi Islam, dan yang menempatkan berbeda dengan ekonomi (neo-klasik) positif,... more Ide sentral yang membatasi ilmu ekonomi Islam, dan yang menempatkan berbeda dengan ekonomi (neo-klasik) positif, adalah desakan untuk memasukkan secara eksplisit nilai-nilai etik yang didasarkan pada agama dalam suatu framework analisis yang terpadu.

Terkait hal tersebut bahwa ekonomi Islam tidak bisa begitu saja terlepas dari ekonomi konvensional. Paradigma ekonomi konvensional akan tetap berfungsi dalam membentuk paradigma ekonomi Islam dan pelaksanaannya. Teori-teori ekonomi konvensional, baik yang mikro maupun makro, akan tetap terpakai dalam diskursus ekonomi Islam. Dalam melakukan proses islamisasi ekonomi perlu mengambil tiga bentuk pendekatan yang adil terhadap ekonomi konvensional. Adapun pendekatan tersebut adalah: Pendekatan menolak (negation). Pendekatan memadukan (integration). Pendekatan menambah nilai (value addition).

Paradigma integratif-interkonektif secara konseptual memang sangat relevan bagi perkembangan keilmuan islam, di mana dialog antar disiplin ilmu akan semakin memperkuat keilmuan Islam dalam menghadapi tantangan zaman dengan segala kompleksitas yang ada. Dengan kata lain, Islam menjadi budaya masyarakat. Lebih jelasnya, seluruh pihak yang terkait dengan perkembangan ilmu Ekonomi Islam harus mampu menampilkan Ekonomi Islam dengan terbuka sehingga mampu merealisasikan Islam sebagai rahmatan lil ‘alamin.

Halal Literacy and Intention of Muslim Consumers to Switch from Products Without Halal Label: An Instrument Development and Validation in Indonesia

by Imam Salehudin

ASEAN Marketing Journal, Vol 2 No 1 (June, 2010), ISSN 2085-5044.

Muslim consumers have strict commandments which guides their consumption behavior. However, Muslim individuals may... more Muslim consumers have strict commandments which guides their consumption behavior. However, Muslim individuals may have different compliance regarding the commandments. This difference in compliance may be explained by difference in halal literacy. Halal literacy is the ability to differentiate permissible (halal) and forbidden (haram) goods and services which came from better understanding of Islamic laws (shariah). Thus, the purpose of this paper is to explore the concept of Halal Literacy as well as to develop and validate an instrument to measure Halal Literacy for Muslim consumers.

Halal literacy was measured using two methods. One method using six items of five point Likert self evaluation scale and the other using fifteen true-false test questions with an option to choose doesn’t know. Proportion of correct and incorrect was used as weights in scoring to represent the difficulty of items. Scoring results were then analyzed with Confirmatory Factor Analysis (CFA) using Weighted Least Square method to test construct validity. Scores were then used to classify cases into high, moderate and low Literacy groups. Self evaluation halal literacy and switching Intentions are compared between groups using ANOVA to determine concurrent validity.

Only ten out of fifteen items are considered valid using Confirmatory Factor Analysis. ANOVA showed that grouping of high, moderate and low literacy score can distinguish differences in perceived halal literacy and switching intentions between the groups. Post hoc tests and descriptive statistics revealed interesting non linear relationship between the halal literacy scores; self evaluated halal literacy and intentions to switch from products without halal labels.

Keywords: Halal literacy, halal label, Muslim consumer, measurement and validation, product switching intention

Intermediaries and Their Roles in Islamic Economics

by Tuan Muhd Taufik Tuan Hussin

A deep understanding of the Islamic Economic System should requires extensive knowledge of the agent in the economy.... more A deep understanding of the Islamic Economic System should requires extensive knowledge of the agent in the economy. This paper tries to discover and argue the existance of intermediaries or better known as "trader" in the economy as lubricant or hoard profit.

TENETS OF THE ISLAMIC ECONOMIC SYSTEM

by Sami Al-Suwailem

Encyclopedia of Islamic Economics, 2010, vol. 2, pp. 235-245.

Decision-making under uncertainty: an Islamic perspective

by Sami Al-Suwailem

Digital Diplomacy: Understanding Islam Through Virtual Worlds (12/10/09)

by Michael Russell

The Digital Diplomacy: Understanding Islam through Virtual Worlds project was lead by Rita J. King and Joshua S. Fouts who are both Senior Fellows at the Carnegie Council for Ethics in International Affairs. The project was funded by a grant from the Richard Lounsbery Foundation.

The idea for Understanding Islam through Virtual Worlds project was hatched with a very specific idea in mind: How... more The idea for Understanding Islam through Virtual Worlds project was hatched with a very specific idea in mind: How could people learn about other cultures in an authentic, experiential space — specifically, how could we learn about cultures that self-identified as Muslim? In turn, how could this information supplement or augment the physical world work of foreign policy and especially public diplomacy practitioners? Fouts and King chose the virtual world of Second Life as the platform for their research for many reasons, among them that it is the best international platform — more than 70% of its users are from outside the United States. The goal was to to see what they could learn about Islam — not by inviting particular people with particular perspectives into Second Life, but rather to follow the trail of what was already happening culturally in the space that might yield new insight about Islam.

The findings included a trilogy of actionable items available in digital format. By releasing three types of reports — policy recommendations, documentary video and graphic book — Fouts and King hoped to make what is still a very new medium as accessible as possible.

Islam and the Olympics: seeking a host city in the Muslim world

by Kasim Randeree

International Journal of Islamic and Middle Eastern Finance and Management

Purpose – Awarding the Olympic Games to a host city in the Muslim world would send a clear indication from member... more Purpose – Awarding the Olympic Games to a host city in the Muslim world would send a clear indication from member nations of the International Olympic Committee of a desire by the international community to engage with Muslim nations on a level that transcends sport. The purpose of this paper, therefore, is to answer the question: will a city in the Muslim world ever become host to the greatest sporting spectacle on Earth, and, if so, which is most likely to receive it, when and why?

Design/methodology/approach – To gauge the potential of cities in the Muslim world hosting the Olympics Games, the approach of the paper is to examine the merits of former host cities and then qualitatively comparing these with member countries of the Organisation of Islamic Conference which have a majority Muslim population.

Findings – The research findings indicate that there are five cities in the Muslim world, at least one of which is likely to be awarded one of the coming six Summer Olympic Games between the years 2020 and 2040.

Research limitations/implications – The broader implications of the study are that, in examining Muslim nations of the world from the point of view of mega-event management on a global scale, their development and advancement capability in the modern world can be probed.

Originality/value – In the absence of any other published study on the subject, this paper would open a discourse that would be of value to scholars and interested parties in diverse fields such as major programme management, Islamic studies, international politics, economics and international development.

مقابلتي مع صحيفة الاقتصادية حول صكوك جولدمان ساكس الامريكي التي يستهدف بها الخليجيين

by Mohammed Khnifer -(MSc,MBA,CSAA,CIFP) محمد الخنيفر

Al-Eqtisadiah Saudi financial newspaper

Three interviews with Al-Eqtisadiah financial newspaper over Goldman Sachs sukuk can be read here:
بنك أبوظبي... more Three interviews with Al-Eqtisadiah financial newspaper over Goldman Sachs sukuk can be read here:
بنك أبوظبي الإسلامي: صكوك «جولدمان ساكس» باطلة http://bit.ly/AALNhq
جولدمان يخطب ود الخليجيين بصكوك قيمتها 2مليار http://bit.ly/upiFcS
متخصص سعودي يشكك في صكوك جولدمان ساكس http://bit.ly/t0X96f

Influence of Zero Sum Game and Gharar on Product development for Islamic Banks

by Bashir Jaman

In this paper gharar and zero sum game have been analyzed with the spirit of maqasis al
sharia. Existing Islamic... more In this paper gharar and zero sum game have been analyzed with the spirit of maqasis al
sharia. Existing Islamic banking products have been justifid in relation to gharar and zero sum
game. Some contradictory products have been debated and marketing strategy to avoid gharar
and zero sum game has been discussed. Finally conclusion has been drawn with the
framework of future product development to avoid gharar and zero sum game.

Islamic Banking and Economic Growth: Empirical Evidence from Malaysia

by Hafas Furqani

Role of Stakeholders of a Business Entity: An Islamic Paradigm

by Nur Barizah Abu Bakar

Nur Barizah Abu Bakar and Sariati Azman (2007). Role of Stakeholders of a Business Entity: An Islamic Paradigm. Journal of ISEFID (Islamic Economics Forum for Indonesia Development), Vol.6, pp. 28-44. (ISSN 1693-5012)

Cursory examination of the prevailing state of affairs in the present business environment reveals that many Muslim... more Cursory examination of the prevailing state of affairs in the present business environment reveals that many Muslim individuals as well as organizations are not practicing businesses in the Islamically-prescribed manner. Based on this premise, this paper is an attempt to demonstrate that Islam as a comprehensive religioun provides guidelines on the roles  and responsibilities of different stakeholders of business entities. In doing this, it first explains the Islamic worldview and ethics and how this should lead to different social and economic behavior of the Islamic stakeholders. The four related fundamental Islamic principles being discussed are the concept of unity of God, vicegerency, justice and accountability. It then proceeds with the central issue of this paper which compares the behaviour of various stakeholders from Islamic perspective. The paper concludes  with a strong emphasis on the need for these stakeholders to behave Islamically.

Comparative Study of Zakah and Modern Taxation

by Nur Barizah Abu Bakar

Nur Barizah Abu Bakar and Abdul Rahim Abdul Rahman (2007). Comparative Study of Zakah and Modern Taxation. Journal of King Abdul Aziz University: Islamic Economics, Vol.20 No. 1, /pp. 25-40. (ISSN 7383-1018; King Abdul Aziz University)

This paper critically discusses the concept of zakah and taxation. The main objective of the paper is, first, to... more This paper critically discusses the concept of zakah and taxation. The main objective of the paper is, first, to compare and contrast zakah and taxation, especially on the legal, economic, social, ethical and spiritual aspects. Secondly, the paper aims to examine issues related to the implementation of zakah in modern time by reviewing the practices of zakah and taxation in the early Islamic period and exploring the issues in the context of Malaysia. The paper indicates that zakah greatly differs from the taxation system. Zakah aims not only to achieve religious merit but also to become part of the modern state fiscal policies and share a greater role in removing inequalities in the society. The paper argues that there may be lack of proper implementation of zakah in Muslim countries which limits the success of the noble aims of zakah. Finally, the paper indicates the urgent need for education and political will of modern governments to
ensure the success and survival of zakah.

Accounting Treatment for Corporate Zakat: A Critical Review

by Nur Barizah Abu Bakar

Muhammad Akhyar Adnan and Nur Barizah Abu Bakar (2009). Accounting Treatment for Corporate Zakat: A Critical Review. International Journal of Islamic and Middle Eastern Finance and Management, Vol. 2 No. 1, pp.32-45. (ISSN 1753-8394; Emerald Publishing)

Purpose – The purpose of this paper is to review the accounting treatments for corporate zakat, as advocated by... more Purpose – The purpose of this paper is to review the accounting treatments for corporate zakat, as advocated by accounting standards and guidelines, as well as those been practised by relevant corporations. The aim is to determine their appropriateness and adherence to both the Islamic as well as the accounting theoretical perspectives.

Design/methodology/approach – Accounting standards and guidelines related to zakat, including the Financial Accounting Standard No. 9 and the Technical Release i-1, are examined. Additionally, analyses are made on the practices of Islamic financial institutions to determine their compliance with both standards and ontological aspects of zakat.

Findings – The study reveals that there is a general misconception of zakat, as indicated in several standards and guidelines, which has consequently resulted in inappropriateness in their proposed corporate zakat recognition and measurement and hence presentations. These inaccuracies, in one way or another, have not been in line with the true spirit of zakat in Islam. More worryingly, some unfavorable consequences may and in fact have already been implicated on the larger Muslim community as a result.

Research limitations/implications – An alternative view on the accounting treatment of corporate zakat is offered in this paper with the aim to provide a fair and proper assessment of zakat on corporate wealth, which is more parallel to the true spirit of zakat.

Originality/value – The paper integrates both the revealed and the contemporary accounting knowledge in scrutinizing the standards and practices as well as in recommending an improved and meaningful alternative.

Sukuk Defaults Bring Innovative Restructuring Approaches to the Islamic Finance Industry

by Mohammed Khnifer -(MSc,MBA,CSAA,CIFP) محمد الخنيفر

Islamic Business & Finance

Stand & Default: An exclusive detailed insight to sukuk restructuring after defaults. The author brings for the... more Stand & Default: An exclusive detailed insight to sukuk restructuring after defaults. The author brings for the first time the three approved structuring approaches: 1) Debt/Equity SWAP 2) Extending Maturity, 3) Haircut

آليات إعادة هيكلة الََدَين الإسلامي ---- (صحيفة الجزيرة) السعودية
http://bit.ly/x5YGE0

The Untold Story of the Premium Collapse of Gulf Finance House

by Mohammed Khnifer -(MSc,MBA,CSAA,CIFP) محمد الخنيفر

Business Islamicia Magazine

The Private Equity Calamity

This paper dissects the balance sheet and business model of Gulf Finance,... more
The Private Equity Calamity

This paper dissects the balance sheet and business model of Gulf Finance, and scrutinizes the existence of a "pre-exit premium" in their activities - on top of the usual exit fees and/or performance fees. The study suggests that this practice (uncommon even for conventional Private Equity businesses - much less for an Islamic Private Equity house) was pioneered by GFH and it is this same practice that brought them down to their knees. 

Toward a Universal Islamic Deposit Insurance System- Part (1)

by Mohammed Khnifer -(MSc,MBA,CSAA,CIFP) محمد الخنيفر

Islamic Business & Finance

The research highlights the types of deposits offered by Islamic banks such as  demand deposits, savings... more The research highlights the types of deposits offered by Islamic banks such as  demand deposits, savings deposits, and general and special investment deposits. Then, it elaborates in details the technicality & mechanism of Islamic Deposit Insurance System & how it can be implemented.

Certificate holders can take default worries off their shoulders with proper asset-backed Sukuk

by Mohammed Khnifer -(MSc,MBA,CSAA,CIFP) محمد الخنيفر

Business Islamicia Magazine

The research explains how lawyers can structure Sukuk that can save certificate-holders from the repercussions of... more The research explains how lawyers can structure Sukuk that can save certificate-holders from the repercussions of what
comes after default.
Asset protection of certificate-holders vis-a-vis their creditors can be achieved by adopting bankruptcy remoteness.

Inside the Meltdown from Islamic Finance Perspective

by Mohammed Khnifer -(MSc,MBA,CSAA,CIFP) محمد الخنيفر

Global Islamic Finance Magazine

In the middle the heat of one of the greatest recorded financial meltdowns, and the breakdown of toxic assets, some... more In the middle the heat of one of the greatest recorded financial meltdowns, and the breakdown of toxic assets, some small niche practitioners deliberated an important question: could this financial crisis have been averted, had the savvy Wall Street investment banks used the principles at the heart of Islamic finance.

This paper differs from the post-financial crisis research articles as it explains the credit crunch in a ‘SIMPLE” manner for those who just joined the investment Banking industry.

Voices of the Unheard - Salvaging the Next Generation of Islamic Bankers

by Mohammed Khnifer -(MSc,MBA,CSAA,CIFP) محمد الخنيفر

Islamic Business & Finance Magazine

The SILENT GENERATION of unemployed Islamic financiers !
The Author warns the Islamic finance industry that it is... more The SILENT GENERATION of unemployed Islamic financiers !
The Author warns the Islamic finance industry that it is about to lose its second generation of bankers
على طريقة رائعة أليخاندرو «الأشجار تموت واقفة».. صناعة المال الإسلامية على وشك أن تخسر جيلا بأكمله من المصرفيين الشباب
الجيل «الصامت» من المصرفيين الإسلاميين العاطلين .. خدعوهم بالتصريحات المنمقة عن مستقبل الصناعة وأداروا ظهورهم لهم بعد التخرج
http://www.al-jazirah.com/20120207/ec6d.htm

Exploring the Optimal Method of Penetration into the Saudi Islamic Investment Banking sector

by Mohammed Khnifer -(MSc,MBA,CSAA,CIFP) محمد الخنيفر

Banker Middle East Magazine

This research paper highlights the potential which lies within the opportunities offered by the under-developed Saudi... more This research paper highlights the potential which lies within the opportunities offered by the under-developed Saudi Islamic investment banking sector.