CSS 2022 Solved Islamiyat Past Papers | Islamic Economics as Solutions to Challenges
The following question about Islamiat was answered by Miss Ayesha Irfan, the highest scorer in CSS Islamiat. Moreover, the question is attempted on the same pattern taught by Sir Syed Kazim Ali to his students, scoring the highest marks in compulsory subjects for years. This solved past paper question is uploaded to help aspirants understand how to crack a topic or question, how to write relevantly, what coherence is, and how to include and connect ideas, opinions, and suggestions to score the maximum.
Question Breakdown
The examiner asked for a proper explanation of Islamic economics in this question. However, providing the main principles is crucial to achieving high grades in Islamic studies. After it is addressed, the next portion of the question with pertinent examples acts like a carry-on top. This section briefly includes solutions to contemporary economic challenges with regard to Islamic economic principles.
Outline
1-Introduction
2-Main principles of Islamic Economics with reference to the life of the Holy Prophet(PBUH)
- ✓Trade in Islam
- ✓Freedom of work and enterprise
- ✓A special concept of ownership
- ✓Prohibition of interest
- ✓System of Zakat
- ✓Distribution of inheritance
3-Contemporary economic challenges of the Muslims
- ✓Unemployment, poverty, inflation, and economic disintegration
4-Solutions of the contemporary economic challenges of Muslims according to the principles of Islamic Economics
- ✓Honesty in every dealings
- ✓Interest-Free Banking
- ✓Zakat
- ✓Ethical Investments
- ✓Equitable distribution of wealth
5-Conclusion
Answer to the Question
Introduction
Islamic economics has been characterized as the study of human falah (welfare) as achieved through the management of earth’s resources. According to the Holy Quran, it has been asked to determine falah on spiritual, economic, cultural, and political levels. The second aspect of the definition must consider how to properly use the earth’s resources in order to achieve falah. The Holy Quran states that Allah has created sufficient resources for His creatures. (41:10). However, proper utilization of these resources is a problem, and man will be held accountable to Allah on the Day of the Resurrection. Therefore, the economic system, which is based on Islamic fundamental principles, ensures social and economic justice, human brotherhood, equitable wealth distribution, and individual freedom in terms of social welfare. On the contrary, neither capitalism nor socialism achieve complete social and economic justice, let alone equitable income distribution. According to Islam, a source of income and a halal (lawful) livelihood are essential. It is permissible to earn whatever one can, but only through fair means. In addition, he must pay “Zakat” and charity to the needy, perform Hajj as required, and spend money on Jihad and the welfare of the poor. In this way, Islam ensures equitable distribution of wealth.
Main principles of Islamic Economics with reference to the life of the Holy Prophet(PBUH)
Economists play a key role in the Islamic economy as social architects. Islam has made it mandatory for those who are financially secure to take on the responsibility of supporting the needy/poor, relatives, and other members of society who require financial assistance. Our beloved Prophet SAW has clarified that while helping the poor and other members of society is an obligation for those who can afford it, it is also a legal right for those in need, which Allah SWT has granted them. According to a hadith, “There are additional rights other than Zakat” Tirmizi (Kitabuz Zakat). The Islamic economic system is based on the individual and collective well-being of members of society.
- Honesty is the core of Islamic trade.
In Islam, trade is permitted. According to the Holy Quran,
“Woe to the defrauders!” They are such that when they need to get something, they take it in full measure, and when it comes time to give, they cheat. Do they not realize that they will be resurrected on the great day when all mankind will stand before the Lord of the worlds?”
(83:1-3).
This verse emphasizes the importance of honesty when buying and selling. Rafio bin Khadij (R.A.) claims that when he asked the Holy Prophet which job is better, he replied that whatever a man has earned via physical labour and every trade that is free from deceit and unfair methods
- Freedom of work and enterprise
This is demonstrated by examining each Hadith collection’s chapter in relation to business, gardening, and agriculture.
“Allah has made business legitimate for you,”
the Holy Quran declares unequivocally (Al-Baqara-275). Islam as a religion primarily permits the economy to run smoothly in accordance with market forces, subject to legal obligations and guidelines on production, distribution, marketing, investment trade, exchange, wages, etc. The state is entitled to step in and restore the balance of the free market in order to uphold justice and other Islamic goals. In such an economy, return should be normal after paying labourers a fair wage in line with Islamic law. However, Islam forbids a few categories of commercial transactions, including exchange, investment, and agricultural land tenancy. As a negative aspect of the economy, it also forbids monopolies and hoarding.
- A special concept of ownership
Islamic teachings state that ALLAH (SWT) is the true owner of everything. “Everything in the earth belongs to Allah,” the Quran states. (Al-Imran). However, as the following verses show, Allah, in His kindness, allows people to seize control of economic resources and to own and use them in accordance with His laws. Do they not see that, among the things we have fashioned for them, we have created cattle that they will eventually own? (Ayat, Sura Yasin: 29). For this reason, Islam permits man to inherit financial resources from Allah (the true owner) in his capacity as Vicegerent. Three categories of rights existed at the time the Islamic state was established: state ownership, communal ownership, and private ownership. In Islam, public ownership of businesses is not required. The state may oversee the operation of the fundamental economic institutions in order to maintain social justice and protect the interests of the general public. Since it has been customary to seize illegitimate property, Islam has safeguarded legitimate property.
- Prohibition of interest
Islam forbids interest, as is well known, but in order to put that idea into practice, the economy must be completely restructured. Experts in finance and economics have acknowledged the viability of Islamic banking.
- System of Zakat
It has become a duty of the wealthy Muslims to pay Zakat in order to assist the less fortunate. Zakat’s benefits extend beyond wealth distribution; it also boosts investment, reserves, and the equitable distribution of resources and income. Conversely, those who are financially disadvantaged receive assistance through ZAKAT as well as other programs like SADAQAT, USHR, FITRA, etc. According to the Holy Quran (Ayat 5–6 of Sura Qasas), Allah SWT says that it is His will that the impoverished be helped. Dr. Monzer Kahf has provided a comprehensive analysis in his book “Islamic Economy”.
- Distribution of inheritance
Islam’s property distribution system is predicated on everyone’s economic and social well-being. Islam has provided a model for the division of inheritable property among the following four groups of people: children, husbands and wives, parents, and brothers and sisters, in specific circumstances. This sharing looks after various groups by anticipating needs, the degree of affinity relationships, and the responsibility of each member of society. Moreover, Islam has preserved a wasiat (will) for each and every one of these family members in the event of their infirmity.
Contemporary economic challenges of Muslims
The current economic challenges that many countries and communities, with a majority of Muslims, face are unemployment, poverty, inflation, and economic disintegration. These difficulties impede social advancement, economic expansion, and general stability. Divergence from the core principles of Islam and from its teachings is one of the main causes of these difficulties. Moreover, inadequate infrastructure, political unpredictability, corruption, and restricted access to healthcare and education can exacerbate Muslims’ financial difficulties.
Solutions to the contemporary economic challenges of Muslims according to the principles of Islamic Economics
Islamic economics, which seeks to advance social justice, equality, and sustainable economic growth, is founded on ideas taken from the Quran and Sunnah.
- Honesty in every dealings mitigates economic disparity.
Islamic teachings emphasize the importance of honesty in trade and business as a fundamental principle. It encourages honesty, equity, and moral behaviour in business dealings. The significance of fairness in business is emphasized in the Holy Qur’an:
“And, O my people, give full measure and weight justly, and defraud men of their things, and act not corruptly in the land, making mischief.”
Nevertheless, the Prophet (PBUH) cursed those who took usury or lent money with interest, as well as those who witnessed it and documented it. When asked what kind of work a man should do with his hands, the Prophet (PBUH) said that it was the best. as well as truthful commerce. Therefore, according to the tenets of Islamic Economics, being truthful in all of one’s dealings is the fundamental solution to Muslims’ current economic challenges.
- Interest-free banking promotes business opportunities
In Islamic finance, interest (riba) cannot be paid or received. Rather, risk-sharing alliances (Musharakah) and profit-sharing arrangements (Mudarabah) are employed, encouraging fair and ethical financial dealings. Thus, in accordance with the tenets of Islamic Economics, interest-free banking is the answer to the current financial problems of the nation.
- Zakat reduces poverty
In Islam, Zakat is a type of required charity in which a predetermined portion of one’s wealth is distributed to those in need. Zakat promotes consumption by providing resources for the poor to spend on essential commodities, which benefits businesses.
This policy promotes local consumption and business opportunities while also empowering the poorest segments of society. For instance, Abu Bakr enforced stringent policies to guarantee the efficient collection and distribution of Zakat, resulting in a notable decline in the rate of poverty. Therefore, by ensuring the Zakat system, a nation can combat its current economic problems, such as poverty and economic disparity.
- Ethical Investments lead to economic sustainability
.Islamic finance steers clear of industries like alcohol, gambling, and tobacco in favour of investments in morally and socially conscious projects. This could encourage ethical and sustainable business practices.
- Equitable distribution of wealth
The equitable allocation of resources and wealth is a key component of Islamic economics. Economic disparities can be addressed through social welfare programs, policies that support income equality, and assistance for marginalized communities. Nevertheless, economic integration is vital because it fosters mutual dependence, and the likelihood of conflict and war decreases with increasing mutual dependence. Trade is increased by economic dependence. This encourages growth and strengthens reliance on one another. Ibn Khaldun maintained that neither the presence of gold and silver mines nor the stars—that is, chance—are factors in development. Instead, it is based on economic activity, specialization, and the division of labour, all of which are influenced by market size.
Conclusion
In a nutshell, the study of human welfare, as attained through resource management, is known as Islamic economics. According to the Holy Quran, welfare on a spiritual, economic, cultural, and political level has been asked to be determined. The fundamental tenets of Islamic economics are the prohibition of interest, the freedom of labour and enterprise, the rules of trade, and the Zakat system. However, it’s crucial to acknowledge that contemporary economies ought to do better in the future, particularly if the current instability in the global financial system worsens and makes it clear that fixing it will call for more than just minor tweaks to the system; rather, it will call for a more robust infusion of market discipline. The structural innovation of Islamic economics and its financial products will help create a new asset class that will be accessible to investors of all faiths. Consequently, adhering to the authentic teachings of Islam is the only way to overcome the current economic challenges of the world. Therefore, Islamic economics, which aims to promote social justice, equality, and sustainable economic growth, is based on concepts drawn from the Quran and Sunnah. The principles of Islamic economics offer solutions to the world’s current economic problems.
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