B U L L E T I NON ISLAM AND CONTEMPORARY ISSUES

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No. 9, July-August, 2012 (Sya’ban - Syawwal 1433))

ISSN 2231-7627 FREE

Interview with Dr Mohamed Moustafa MahmoudExecutive Director of Madinah Institute of Leadership and Entrepreneurship (MILE), Knowledge Economic City, Madinah, Saudi Arabia talks about leadership development in the Global world. (More p. 3)

Article: Interest vs Profit Literally, riba means “increase.” However, riba is commonly translated into English as “interest.” Riba is a recurrent theme of the Qur’an - referred to in several verses. (More p. 7)

MORE INSIDE• Event Report on Executive Education and Leadership Development for the Global Ummah:

A New Initiative in Madinah (p. 5)• Event Report on roundtable discussion with Professor Tariq Ramadan (p. 5)• Research Updates (p. 10)• Policy Recommendations (excerpts from ICR vol. 3 no. 4) (p. 11)• Events at IAIS Malaysia (p. 12)

Article: Shari’ah in AustraliaA weighty subject, the Shari’ah, was broached over the past year in the Australian media by national and Islamic leaders, scholars and intellectuals. This is God’s Law and along with the Straight Path for His worshippers (Minhaaj ul- Aabidin) leads to Him and Ultimate Success in the Hereafter.

(More p. 8)

Article: Being Muslim and ModernIslam provides a set of powerful teachings and practices with universal relevance for humanity. These resources retain the potential to shape a more compassionate and peaceful future for Muslim societies. The challenge facing Muslims today is to present Islamic values and principles in authentic terms for the twenty-first century. (More p. 6)

Roundtable Discussion with Tariq RamadanOn 16th July 2012, IAIS Malaysia hosted Professor Tariq Ramadan, currently holding a professorial chair in Oxford University and also heading Center for Islamic Legislation and Ethics in Qatar, for a roundtable discussion in the presence of leading Malaysian personalities from academia, politics, business and the civil service including Tun Abdullah Haji Ahmad Badawi, former Prime Minister of Malaysia, Tun Abdul Hamid, former Chief Justice, Tan Sri Syed Hamid Albar, former Minister of Foreign Affairs and other dignitaries. Among issues addressed was the primacy of ethics in intellectual and social life. (More p. 5)

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orderly and purposeful manner in situations of uncertainty, is tolerant of ambiguity, has the skillset to break down goals into manageable steps, is inspirational and understanding of his team’s strengths and weaknesses and finally is committed to excellence.

And, I think it is important that I clarify here that leaders are not just managers. While the manager administers, the leader innovates. The manager maintains, the leader develops. The manager relies on systems, the leader relies on people. The manager does things right while the leader does the right thing. An organisation with good management, but poor leadership, will preserve the status quo, but may not be able to advance to a higher level of performance.

And this is what MILE aims to bring to the Muslim Ummah… Leaders who will advance, innovate and inspire, not just preserve a status quo.

Q2: In one hadith the Prophet (pbuh) gave us a very broad view of leadership in which each of us is in a sense a leader (the original word is ra‘in, implying

something like a shepherd) and will be questioned about our subjects. If we take this broad view, how do we design the knowledge-content of leadership training and education so as to maximise the individual’s leadership potential and empower him with the ability to recognise the right leaders for specific roles?

A2: Leadership in Islam is a trust (amanah). It represents a psychological contract between a leader and his followers that he will try his best to guide them, protect them and to treat them fairly and with justice. As you mentioned, in Islam, every person is the “shepherd” of a flock, and occupies a position of leadership, and here I believe Prophet Muhammad has brought to the light, one more extremely important trait of a leader which is responsibility. Too many leaders get caught up in thinking about power rather than their responsibility to those they lead.

I think as Muslims we already have a head-start because we have so many excellent examples of leaders in our history. If we were to combine their

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Bulletin teamIAIS Malaysia

EDITORProfessor Mohammad

Hashim Kamali

CONTRIBUTORSProfessor Mohammad

Hashim Kamali

Karim Douglas Crow

Daud Batchelor

Abdul Karim Abdullah

Tengku Ahmad Hazri

EDITORIAL ASSISTANTS

Norliza Saleh

Maryam Latifah

Published by:International Institute of Advanced Islamic Studies

(IAIS) Malaysia, Tel: 03 - 7956 9188Fax: 03 - 7956 2188

www.iais.org.my

Q1: MILE was born of the recognition that the ummah is currently having a leadership deficit. What constitutes good leadership and how do we recognise this ability in a person?

A1: Leaders are made not born. If you have the desire and willpower, you can become an effective leader. Good leaders develop through a never-ending process of self-study, education, training, and experience. A leader has a vision. Leaders see a problem that needs to be fixed or a goal that needs to be achieved. It may be something that no one else sees or simply something that no one else wants to tackle. Whatever it is, it is the focus of the leader’s attention and they attack it with a single-minded determination.

Leaders dream dreams. They refuse to let anyone or anything get in the way of achieving those dreams. They are realistic, but unrelenting. They are polite, but insistent. The constantly and consistently drive forward toward their goal. A good leader has an exemplary character, is enthusiastic about their work or cause and also about their role as leader, is confident, functions in an

Warm greetings. IAIS Malaysia’s bi-monthly Bulletin is now presenting its 9th issue which includes a review of our institutional activities. We are pleased to inform that Dr Mohammed Farid Ali has joined IAIS as a Research Fellow. He specialises in Islamic jurisprudence and his research interests include Islamic finance.

This issue features articles covering Islamic economics - the articles of Abdul Karim Abdullah differentiating Riba (interest) from Ribh (profit) Dr Karim Crow writes on “Being a Muslim and Modern”. A background article by Dr Daud Batchelor covers issues surrounding the current topical debate on what role Shari’ah can play for Muslims in Australia. Being an Australian himself,

EDITOR’S NOTE

O GOD: YOU are Peace, YOU are the source of Peace, Peace belongs to YOU. So welcome us (in the Hereafter) O LORD with the salutation of ‘Peace!’, and admit us into Paradise the Abode of Peace. Blessed and Exalted are YOU our LORD, Possessor of Majesty and Reverence.

(Text from al-Tirmidhi and al-Nasa’i)

by Tengku Ahmad Hazri

Focus: Interview with Dr Mohamed Moustafa Mahmoud “Leadership Education for the Global Ummah”Dr Mohamed Moustafa Mahmoud, Executive Director of Madinah Institute of Leadership and Entrepreneurship (MILE), Knowledge City, Madinah, Saudi Arabia

Hikmah

I looked at my friends, and did not find a better friend than safeguarding the tongue. I thought about all the dresses, but did not find a better dress than piety. I thought about all the types of wealth, but did not find better wealth than contentment in little. I thought about all types of good deeds, but did not find a better deed than offering good advice. I looked at all types of sustenance, but did not find a better sustenance than patience.

(Umar bin al-Khattab)

Rear your children for a time different from your own. (Ali ibn Abu Talib)

The objective of the Shari’ah is to promote the well-being of all mankind, which lies in safeguarding their faith (din), their human self (nafs), their intellect (caql), their posterity (nasl) and their wealth (mal). Whatever ensures the safeguard of these five serves public interest and is desirable.

(Abu Hamid al-Ghazali)

Professor Mohammad Hashim Kamali

Dr Daud speaks of his own experience and involvement in the subject of his discussion. A discussion with Islamic reformist, Professor Tariq Ramadan, addressed the primacy of

ethics in intellectual and social life, the need to bring “scholars of the text” (jurists, exegetes) and “scholars of the context” (economists, scientists) together for better understanding, and encouragement to use prevailing systems to extract Islamic mores. A presentation by Dr Mohamed Moustafa Mahmoud of the Madinah Institute for Leadership and Entrepreneurship was provided on a new holistic training initiative in Medina to better prepare Muslim leaders, which may represent a desired add-on activity for Haj or Umrah visitors.

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traits and the contemporary teachings of leadership, the muslim Ummah would make remarkable strides of success. This is the MILE vision.

Q3: As part of its leadership training program, MILE has placed emphasis on nourishing the specific strengths that the individual already has rather than on rectifying his many shortcomings. How far is this viable strategy in developing all-round leaders rather than leaders with only a limited field of competence?

A3: Well, actually it is important to identify both your strengths and shortcomings in order to become an effective leader. At the end of all our programs we have an executive coaching session where each executive gets a one-on-one with a professional coach with the aim of facilitating learning new behaviour for personal growth and professional advancement as well as working on weaknesses.

One of the other ways we, at MILE, develop all-round leaders is through providing programs that are not just focused on theory but programs that develop the individual as a whole; mentally, socially, spiritually and physically. To develop the mental area of the leader we provide a wide-range of speakers from top business schools, consulting and training companies, pre-program assessments, case-studies and best-selling books. To develop the spiritual area we have a visit to Islamic sites in Madinah, Islamic values presentations and daily morning Quran sessions. To develop the social area, we provide executive coaching, team building activities, image consulting and networking opportunities. Finally to develop the physical area of leaders we provide dietary advice at the program, daily morning exercises, a medical checkup (sponsored by International Medical Center) and only offer healthy fresh food at event brunches and dinners.

Q4: Being located at the new Knowledge Economic City (KEC) in Madinah, MILE has, it seems, positioned itself as part of the vision to establish the country as the global educational hub. How do you see following Western business models for training executives, to advance Muslim enterprises in a more Islamic direction?

A4: It is important that Muslim enterprises learn and apply concepts from successful Western Business Models without losing their identity. Mirroring or replicating is not a trait of a successful leader. Rather great leaders are ones who can take the best of knowledge from others but also be innovators who can make use of their distinguished skillsets and resources.

Event Report

On 6th April 2012, IAIS Malaysia held a lecture on “Executive Education and Leadership Development for the Global Ummah” by Dr Mohamed Moustafa Mahmoud, Executive Director of the Madinah Institute for Leadership and Entrepreneurship (MILE) in Madinah’s Knowledge Economic City (KEC), Saudi Arabia. Dr 3M—as he is fondly known—tackled the subject of leadership and why it is under-represented in the Muslim world. Reports from various agencies and organisations, such as the Arab Human Development Report, United Nations Development Program (UNDP), and World Economic Forum (WEF) invariably suggest the lack of viable leadership and the consequent loss of key talent as important factors that stifle growth in Muslim countries.

Dr 3M identified among other factors, the low quality of business schools, lack of corporate universities and in-house training programs, lack of effective professional societies and the tendency to send employees abroad for training as among the principal causes behind such deficit. This last factor, which at first sight may appear to be an advantage rather than shortcoming, is actually fraught with many problems. For instance, training participants can neither relate to nor participate fully in the workshop discussions owing to unfamiliarity with the case studies (often about businesses and cultures foreign to them, and may be irrelevant) and no sustainability of leadership development, i.e. upon returning home, employees make no further effort towards continuous improvement and learning, despite the large expenses spent in sending them abroad, the opportunity cost of which is training many others locally.

To remedy such problems, MILE devised a number of strategies of leadership training through continuous development of future leaders and empowering them with networking opportunities. A holistic approach is taken in its leadership programs by emphasising ethics in leadership as well as intellectual, emotional, physical and spiritual development. MILE also takes an approach to corporate social responsibility (CSR) by which a win-win relationship is established with stakeholders (particularly, CSR donors or contributors, leading business schools, consultancy firms, Muslim business professors based in the West, local businesses and MNCs). Its CSR programs also recognise that some community projects are best served through collaboration with several organisations so that the initiative becomes a collective and shared concern.

by Tengku Ahmad Hazri

Executive Education and Leadership Development for the Global Ummah: A New Initiative in Madinah

Roundtable Discussion with Professor Tariq Ramadan

The primacy of ethics, he argued, questions “the very essence of knowledge” itself, not merely ‘appended’ as it were to the knowledge. Islamic banking and finance is one such example, in which we have “halal transactions in a non-halal system”. Despite this, our challenge is to transform the system from within. Ramadan denies the need to inquire into ontological and epistemological dimensions of knowledge, maintaining instead that our concern should be strictly ethical. But he departs from conventional understanding of ethics as strictly addressed to human conduct but goes to the very essence of knowledge. Thus matters like the possibility of knowledge, structure and reality of things, which under conventional philosophy would fall under epistemology and metaphysics respectively, also fall under ethics in Ramadan’s scheme. The objective, meaning, purpose and scope of knowledge should be part of ethical inquiry. This ethics should pervade our entire social life and address issues in a fundamental manner. Ramadan opines that capitalism itself is in crisis hence perceives Nicolas Sarkozy’s and others’ call to “moralise capitalism” to be self-contradictory. But to assert the primacy of Islamic ethics here does not mean that we ignore perspectives from others religions. In fact the strength of Islam here lies in its ability to accommodate such pluralism, which nevertheless needs to be balanced against the more relativistic strand that asserts that “all religions are the same.” Ramadan asserts the need to bring together what he calls “scholars of the text” (such as the jurists, exegetes, theologians, etc) and “scholars of context” (such as economists, scientists). The text, he argues, should be taken seriously but not to the point of lapsing into literalism.

Quotable Quotes

Think twice before you speak, because your words and influence will plant the seed of either success or failure in the mind of another.

- Napoleon Hill

Coming together is a beginning; keeping together is progress; working together is success.- Henry Ford

Develop success from failures. Discouragement and failure are two of the surest stepping stones to success- Dale Carnegie

The challenge is how to educate the detractors of Islam about the sophisticated tradition of Islamic thought so that they can distinguish the religion from those Muslims who are equally ignorant and violate all its principles.

- Robert D. Crane

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And, I think it is important that I clarify here that leaders are not just managers. While the

manager administers, the leader innovates. The manager maintains, the

leader develops.

contd from page 1

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Thinking Muslims must search for fresh ways to realise and make these values real and effective in our world. This search requires a critical attitude to the legacy of the past as well as a creative response to present human needs and global conditions.

Amidst all the violent and discouraging events that daily occur, Muslims need to remind themselves of their true situation. Let us turn our gaze within to look beyond the post-colonial challenges of socio-economic development and rampant globalisation. If we look sincerely and dispassionately we find that among the factors responsible for the current conditions of Muslims is a certain poverty of creative imagination. Widespread globalising forces nurture and reinforce intellectual and spiritual passivity where many do not think about their role in society nor reflect on the requirements and implications of their faith. Instead they become passive consumers whose material and psychic appetites are stimulated and magnified, replacing inner contentment with outwardly directed desires.

The attraction and power of modernity lies primarily in its material technological and commercial success, combined with the spread of nation-state identities. Currently we witness a vibrant trend of de-secularisation with an accompanying affirmation of public religious identity in many Muslim societies. This is occurring in varying degrees in the S.E. Asian region, as well as in Pakistan, the Arab world, Turkey, and among Muslim minorities in Europe and the West. The long term consequences of this complex socio-cultural, ideational and spiritual shift is loaded with possible alternative directions contingent upon how Muslims respond to the opportunities and threats they now confront. Several

basic factors shall determine or affect these possible outcomes:

The sense of Isolation and being Left Behind, matched by the spread of outwardly formalist religious observances. There is a vivid sense of marginalisation and being under siege: from the West with its militarist and economic hegemony; from unrepresentative governments or corrupt ruling cliques; and of being abused by the tyranny of authoritarian religious interpretations. This abuse of authority (both political and religious), and the degeneration of authoritative ideals into authoritarian exploitation by segments of society, is a major feature of our era. In response, one observes an increasing emphasis on external ritual observances and literal practice with simplistic doctrinal conformity.

Two chief aspects provoking this response stand out: 1) the military and mercantile hegemony projected by a powerful West employing vast resources and sophisticated technology. This economic, cultural and military projection has been proceeding for several centuries, but has entered a radically new post-imperial late-modern phase dictated by the Information Age and advances in international economic structures—multi-lateral trade & banking policies, trans-national corporate financialisation, and the accompanying marketisation of mass culture. 2) The rise and spread of a simplistic conformist ideology marked by an intellectual-minimalism yielding a scornful de-valuing and marginalisation of ‘higher’ intellectual and spiritual Islamic traditions. This pervasive current is recognisable by its privileging of legal discourse and externalised shari‘ah-consciousness as the preferred normative mode of conceptualisation. This mindset often breeds contempt

THINKING MUSLIM: BEING MUSLIM AND MODERN

for non-Muslim religions and perceived ‘alien’ cultural expressions. It also clearly displays its incapacity and unwillingness to effectively address and respond to changing demands of current global conditions—by choosing confrontation or non-engagement, or by engaging in indiscriminant violence targeting innocents. Take the attitude underlying the mentality of takfir wa l-hijrah (condemning other Muslims as unbelievers, and migration away from one’s Muslim society condemned as corrupt): in reality this is an adolescent rejection of society’s actual conditions and problems, advocating a naïve opting-out by deforming poorly understood ideals selected haphazardly from the legacy of Islamic teachings. It is an unintelligent failure to maturely face reality and work constructively to improve and better society from within. Such attitudes merely perpetuate our problems making solutions more painful and difficult.

The Spectrum of Muslim mentalities: secular / westernised / progressive / conservative / insular. An outstanding feature is the difficulty of meaningful exchange and respectful interaction between these various modes of being Muslim, as well as the scarcity of efforts to maintain open channels of communication or cooperation among differing trends of Muslim thinking and life-styles. There is an increasing attraction for many in our societies to westernised and globalised life-styles, consumerist cultural artifacts, and informational knowledge modes. This is the case especially for younger generations shaped by modern mass education, TV and the world-wide-web. This important segment of the Muslim community keenly suffers the tension between time-honoured requirements of Islamic observance and practice—and pressing demands for leading a

successful modern existence within their own societies through concessions to the widespread consumerist global culture.

The dynamism and creative energy of our Youth shall play an increasingly crucial role in shaping Muslim futures, but they are not being provided with enough enlightened models or sufficiently wise guidance by adult exponents to meet the challenges. Youth are not being offered more adequate responses feeding the flame of authentic Islamic Values and principles, while simultaneously

facilitating engaged social and ethically responsible existence. It is not being widely demonstrated to our youth how to be in the world, yet not of the world – in the words of a famous Prophetic tradition.

Stirrings of the realisation that Muslims are marginalised as a global presence, and are not contributing sufficiently to offering solutions to problems facing all humanity. Despite the great oil wealth of several Muslim states, the majority of Muslims are

affected by poverty and oppression, low productivity, high birth rates, high unemployment and low levels of education. Muslims remain under-represented in a variety of international organisations or institutions, nor do they effectively project a concerted presence and united voice regarding issues of great regional and global importance affecting human security, stability and prosperity. On a positive note, the demands imposed by pervasive globalising forces of modernity are pushing Muslims towards more adequate responses.

(...huwa l-Rahmān al-Rahīm / He is All-Merciful All-Loving)

(This article appears in two parts. Part two will be featured in the next issue of this Bulletin)

Riba is a recurrent theme of the Qur’an - referred to in several verses (30:39, 4:161, 3:130, 2:275-276, 278). Most commentators agree that riba is a sum of money a lender claims from a borrower on top of the principal amount of a loan, as a reward for extending the loan, or for allowing more time for repayment. It does not matter whether the additional amount is small or large; even the smallest amount is still riba because it constitutes an “addition.”

The amount of riba (interest) added to a loan is commonly specified in advance. Moreover, it is specified as a proportion (percentage) of the total amount of the loan. The total amount of interest paid thus depends on the total amount lent and on the rate of interest charged. The higher the amount or the rate of interest or both, the more interest will be paid.

Riba mentioned in the Qur’an takes place in the course of lending, and is known as riba al nasi’ah. Despite the fact that the Qur’an draws a sharp distinction between a sale (al ‘bay) and riba (Qur’an 2:275), according to prophetic traditions riba may also arise in the course of trading (buying and selling). This type of riba takes place when items of equal weight but unequal value are exchanged in barter, or when an asset is traded at a price that substantially exceeds or falls short of its market value. In trading, riba is known as riba al fadl.

INTEREST (RIBA) vs PROFIT (RIBH)

The loan and its repayment with interest constitute an exchange of values. In so far as a loan at interest is invariably smaller than the repayment, the amounts of money exchanged in such a loan are always unequal. The smaller amount is paid to the borrower on the spot, while the larger amount is paid to the lender later. Thus, as in a trade, the values exchanged in a loan at interest are unequal.

Because the counter values exchanged in both types of riba are unequal, riba may be defined as the amount by which one of two countervalues exchanged exceeds the other counter value, regardless of whether this takes place in lending or in trading.

Riba is prohibited (haram). This is clear from a definitive (qat’i) verse, “God has permitted trade but forbidden usury” (Qur’an 2:275). The cause (illah) of the prohibition of riba is the difference between the counter values exchanged. The rationale (hikmah) for the prohibition is to realise justice in dealing.

The injustice in a ribawi transaction, whether in a loan or in sale, arises from the fact that one party receives greater value than the counterparty. In such a transaction, the difference between the two values is transferred from one party to the counterparty. Effectively, the party receiving the higher value benefits at the expense of the party receiving the lower value. One could say that the

party receiving the greater value “takes advantage” of the counterparty.

Transactions in which one party receives a greater value than the counterparty will, over the longer term, produce and perpetuate a divided society. In such a society, people will be divided into debtors and creditors. This runs counter to the ethos of Islam, which emphasises the need to share wealth, rather than concentrate it among a few wealthy creditors at the expense of the majority.

The Qur’an leaves no doubt as to the seriousness of the offence of riba. It calls on the believers to give up whatever remains of their demands for riba. (Qur’an, 2: 278). It advises the believers to give time to debtors in difficulty to repay the principal amounts of their debts. Indeed, it recommends forgiving even the principal sums by way of charity. (Qur’an, 2: 280). In other words, the Qur’an calls for debt forgiveness. A common rationale used to justify payment of interest is that the lender needs to be compensated for the erosion of the purchasing power (currency debasement) of money that takes place due to inflation by the time the debt is repaid. With regards to this view, we note that lending rates generally exceed the inflation rate by several percentage points (3% on average), so the party that lends at interest normally receives more than what is necessary to compensate for inflation.

by Karim Douglas Crow(contd from page 1)

by Abdul Karim Abdullah(contd from page 1)

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It is surprising to find concern among some that Muslims wish to force Shari‘ah on Australians at large. This view is totally false. In Islam there is no compulsion in religion [Q2:256] and Australian laws need parliamentary approval. Clearly in Australia, Shari‘ah is a requirement only for Muslims - except when non-Muslims may voluntarily accept Shari‘ah rules, such as may be the case for Islamic financing instruments.

The Council of Imams Queensland in their late 2011 article in the Queensland Muslim Times, “Shari‘ah Law and Living as Muslims in Australia”, was a welcome clarification of the subject. It rightly pointed out that the Shari‘ah is broad and touches on all aspects of life: personal, communal, family, legal, ethical, financial and political. Shari‘ah encompasses the branches of ‘ibaadaat (ritual worship), mu‘aamalaat (social transactions) and ‘uqubaat (punishments). Shari‘ah is therefore applicable to the daily practices of Muslims wherever they may be, such as the correct performance of their daily prayers and fasting in Ramadan. If Shari‘ah was absent there could be no Muslim marriages or mosques, such as was the case in some former authoritarian communist regimes.

Australian government politicians Barnaby Joyce and former Attorney-General Robert McClelland declared in May there was no place for Shari‘ah in Australia. These views seem based on a narrow interpretation of Shari‘ah that stresses the formal legal aspects and not the broader elements.

Australian Muslims Turning to Shari‘ahThe journalist, Sally Neighbour, who researched the current application of Shari‘ah in Australia in her January 2011 article in the Monthly magazine, titled “The Way to the Waterhole”, commented, “Strong anecdote evidence suggests Australia’s Muslim population – 400,000 and growing … are increasingly turning to sharia to resolve their affairs in areas such as marriage, divorce, custody and inheritance.” This is not surprising. Muslims would naturally wish to strive for an environment that is spiritually and morally uplifting for their families and communities, while wishing to share these blessing with non-Muslims who may be receptive.

Necessity for Muslims to take Decisions Using Shari’ahGod Almighty has stated in clear terms “whoever fails to judge on the basis of what Allah revealed has committed Zulm (injustice and oppression) [Q5:45] … has committed Fisq (disobedience) [Q5:47]. In the very next verse Allah refers to the Qur’an as ordering judgments according to what He revealed and so has prescribed His Law (Shir‘atun) and a Clear Way (Minhaaj) [Q5:48], which is the Shari’ah and al-Islaam. As this is specified by Allah Himself, I would take Shari‘ah to be His Ideal and Perfect Law that the fuqahaa’ (jurisprudent scholars) strive to achieve through the science of Fiqh (scholarly rulings) based on Usuul al-Fiqh principles. Only in the so-called manifest (Zahir) and explicit (Nass) Qur’anic texts is the Law of Allah self-evident while other texts require an element of human fiqhee interpretation for law-making. For a believing Muslim it is obligatory to follow the Shari‘ah. Matters requiring directives by a Muslim ruler do not however, apply in a Muslim-minority country such as Australia; an obvious example is the Huduud laws and prescribed punishments. As full citizens, Muslims need to live within the legal system of Australia and obey its law.

SHARI’AH - A TOPIC OF INTEREST IN AUSTRALIA

Another rationale used to justify the payment of interest is that lenders need to be compensated for a lost opportunity to earn profit with the money they otherwise lend to borrowers. With respect to this view, we note that as there is no way of confirming that the lender “would have earned” any profit at all just because he had the opportunity to do so, this claim remains unconfirmed. Having an opportunity to earn profit, and earning profit are two very different things. Many have the opportunity to earn profits, but few do.

The Qur’an draws a distinction between riba and sales. The difference between riba and selling, however, implies a distinction between riba and ribh or profit. Thus, the meaning of riba can be brought into sharper focus by comparing lending with

trading, as well as by contrasting riba with ribh or profit.

Ribh – commonly translated as “profit” – is an amount of money added on top of the cost price of a good or a service. This “extra” is known as a “mark-up.” The profit of the entrepreneur comes from this mark up, after all expenses are paid. The “extra” in the form of a mark-up represents compensation to the trader for his expenses and for making the effort and taking the risk to bring a product or a service to market. Riba, by contrast, is generally added not to a cost of a product but to a loan of money.

Riba (interest) and ribh (profit) are different because they are earned in different ways. Trading and by extension

investment take place in the real economy. Buying and selling meets people’s needs. While profits have to be earned by active participation in economic activity, interest is gained passively, without the participation of lenders in the production or distribution process. In the case of collateralised loans, interest is earned even without taking risk.

It is important to maintain an awareness of the important difference between profit and interest, as well as between the types of activities – trading and lending – that generate them, respectively. Without a good understanding of the difference between forbidden riba (interest) and permitted ribh (profit), it will be difficult to maintain the compliance of Islamic finance and banking with the Shariah.

One Imam in Australia told me he believed that Australian laws cover 90% of (what is in) the Shari‘ah. It is important to note though that Shari‘ah law has a spiritual base that cannot be divorced from the evident legal statements, while Australian laws are secular.

Former Influence of God’s Law in the WestWestern countries once recognised the overriding importance of God’s Laws but then moved towards secularism with separation of “church” and “State”. The law in Britain and its former colonies was strongly influenced by the Ten Commandments, which although part of God’s Law given to the Israelites at Mt Sinai [Q7:154], had been acknowledged as a source of guidance by Christians in their countries. Not surprising, except for (4), such commandments, in slightly different form, are also mentioned in the Qur’an (shown in brackets). In breviated form as extracted from the Bible they are recorded as (1) you are to have no god but Me (47:19) (2) Do not make idols (14:35) (3) Do not make wrongful use of God’s name (19:88-89) (4) Remember the Sabbath and keep it holy (5) Honour your father and mother (17:23) (6) Do not commit murder (5:32) (7) Do not commit adultery (17:32) (8) Do not steal (5:38) (9) Do not bear false witness (2:283) (10) Do not covet your neighbour’s property (20:131). Although these Commandments had been an inspiration and source of legislation, this is not now the case as many laws were removed as being inappropriate in a liberal democracy. Over the past 100 years laws related to the commandments such as 1,2,3,4, and 7, have been removed or diluted (e.g. blasphemy laws). At the same time Australia, like other secular countries, has been sliding away from a God-centred society to more of a self-centred one. There are positive signs though that many Australians want to reverse this trend.

Legal System in AustraliaThe Australian people and parliaments should be congratulated on achieving a high level of social equity and justice through the legislative system, which is appreciated by its Muslim citizens. These laws developed through consultation and

reasoning do not however, benefit from the revealed Guidance of the Supreme Being and consequently have some deficiencies. For example, permission is provided for activities which degrade the nobility of man including laws that facilitate pornography, prostitution and gambling. Some without a voice are totally ignored and ‘terminated’ – the aborted unborn – who in a country of virtually zero infant mortality would have had every expectation of living to adulthood. The error in permitting such activities is addressed by the divine Shari‘ah, but may not be obvious to a non-believer. The highest objective of the Shari‘ah is to guide a Muslim how to seek God’s acceptance through submission to His commands … this is not the objective of national secular laws.

Acceptance of Shari’ah ElementsRather than being portrayed in the media as a concern, many Shari’ah elements have demonstrated their goodness. Shari‘ah-compliant investments weathered the GFS better than most. Concern for the worth of paper currencies has encouraged Muslims (and now non-Muslims) to seek gold backing. The Australian Gillard government is reportedly planning to ease barriers to Shari‘ah-compliant financial products to tap into Islamic finance and

banking. Comparisons of legal systems provide evidence of the strong influence of Shari‘ah law on western legal systems in both common and civil law as a consequence of the Normans invading Britain (having been exposed to Islamic systems when they conquered Sicily), as well as being introduced by Crusaders returning to their homelands. I suspect the famous Magna Carta issued in 1215, the bedrock charter of British citizens’ rights, had such a background.

Joint Efforts with ‘People of the Book’To work for a more God-centred society, Muslims need to join with believers from among the People of the Book – Christians and Jews – to promote common values, such as strong family values, and rights of children and the unborn. Muslims themselves need to appreciate the elements of worship and social practices (part of the Shari‘ah) that they are able to practice freely in Australia, as are the followers of other religions able to practice theirs.

Muslims like other Australians have made important historical contributions to the development of the “Lucky Country” and are deserving of the same respect as other citizens. For example, there should be no veto of their legitimate

The conference plans to examine the juristic discourse on the implementation of Shariah laws for Muslim minorities in non-Muslim countries.

by Daud AbdulFattah Batchelor(contd from page 1)

wishes to have alternative dispute resolution and adjudication procedures such as currently apply to Australian indigenous and Jewish communities (Beth Din). For Shari‘ah -based facilities to be more broadly accepted, Muslims themselves need to make the effort to demonstrate their effectiveness and benefits.

10 11July - August 2012 July - August 2012

RESEARCH, PUBLICATION AND CONFERENCE PRESENTATION Professor Mohammad Hashim Kamali 1. Working on a collection of my written works to be published as a book on “Maqasid al-Shari’ah” with the

assistance of Tengku Hazri.2. Writing on “Censorship in Islam” for an Encyclopedia in United States.3. Revising my book on Islamic Criminal Law: A Critique of the Hudud Bill of Kelantan (1993) for a wider

readership within and outside the Malaysian context. I am doing this new edition with the assistance of Abdul Karim.

4. Revising and enhancing my recent book on “The Qur’anic Principle of Wasatiyyah,” for Oxford edition.5. Engaged in preparation and editing of another book of essays: “Islamic law of Transactions and Finance:

Principles and Developments” with the assistance of Sheila Ainon.

Emeritus Professor Datuk Osman Bakar submitted two articles, a book review, and an events report for publication in the coming July issue of ICR Journal. His article is titled “The Identity Crisis of the Contemporary Muslim Ummah: The Loss of Tawhidic Epistemology as Its Root Cause.” He was one of the keynote speakers at the Inaugural National Conference on Medicine and Religion held in Chicago on 23-25 May 2012 and organised by The Program on Medicine and Religion at the University of Chicago, Department of Medicine, MacLean Center for Clinical Medical Ethics. Dr Osman presented two papers at the Conference, titled “Medicine and Religion in Islamic Culture” and “The Relationship between Religion Ethics, Science and the Practice of Medicine: An Islamic Perspective.”

Dr. Karim Douglas Crow pursues research on adaptation of Islam to globalizing Modernity; cultural impacts of materialist consumption on Muslim societies; and how Islamic Rationality contrasts with Euro-American values as a basis for the Islamic alternative to Modernity. His other main concern is faith and ethics and their relevance to contemporary conceptions of Security-Peace.

Abdul Karim Abdullah @ Leslie Terebessy has completed a paper for the ICR on ‘Debt as the Root cause of the financial crisis,’ and is currently engaged in writing an OPS entitled “From Interest-based Financing to Profit and Loss Sharing,” which is a comparison of the costs of interest-based financing with the benefits of financing by way of profit and loss sharing.

Mohammed Farid Ali1. Working on a small book Shariah Objectives (Maqasid al-Shari’ah) in Financial Transactions and contracts

with Prof Dr. Mohammad Hashim Kamali.2. Final revisions to the forthcoming publication Forty Hadith of Mulla Jami. He is a co-author with Prof. Dr.

Ajmal M. Razak al-Aidrus.3. Completing the Translation of Shah Wali Allah al-Dehlawi’s Fawz al-Kabir fi Usul al-Tafsir.4. Wrote a small article Imam Abu al-Hasan al-Mawardi (d. 1058 CE) on Adab of Learning: Excerpts from his

Adab al-Dunia wa al-Din for IAIS Bulletin no.7 and continued the same article for no. 8 (the current issue).5. Wrote a small article Economic Thoughts of Umar Ibn al-Khattab for the next IAIS Bulletin no. 9.6. Writing a view point on Relooking at the Verses of the Qur’an on Riba and Its Implications on Society. 7. Finalising a draft of recommendations for action, on the topic of peace and security from the perspective of

Islam, for publication as a policy issues paper.

Sheila Ainon Yussof is preparing a chapter on “The Maqasid Filter in Takaful Audit”, and writing an article “Takaful: The Malaysian Exeperience” for Current Law Journal.

Tengku Ahmad Hazri is researching on legal and constitutional theory in Islam, currently revising his paper on the rule of law and shorter pieces on related topics, in addition to published contributions in the ICR. He is also helping Prof Kamali with the latter’s book on maqasid al-shari’ah (objectives of Shari’ah).

Mohammad Hashim Kamali, Ethics and Finance: Perspectives of the Sharī‘ah and Its Higher Objectives (Maqāṣid)• Integrate the maqāṣid al-sharī‘ah in the operative rules of Islamic banking and finance (IBF);• Promote a self-critical and evaluative approach to Islamic banking and finance, which should open fresh avenues of

enhancing ethical and social justice dimensions of the industry; • Ethical concerns and credibility factors require that IBF should develop more vigilance in order to reduce imitation

and match-making of the conventional banking modalities and products.

Osman Bakar, The Identity Crisis of the Contemporary Muslim Ummah: The Loss of Tawhidic Epistemology as Its Root Cause• More studies be done on the epistemological dimension of the ummah’s knowledge-crisis in modern times and the

implications of this crisis for the ummah’s identity with the view of securing a better comparative understanding of Islamic and modern Western knowledge-cultures;

• An ummatic agenda on the rediscovery and recovery of Islam’s tawhidic epistemology be concertedly pursued by Muslim scholars and research centres, particularly in the universities;

• Academic policy makers for higher education in Muslim communities pay serious attention to the issue of application of tawhidic epistemology in contemporary Muslim education at all levels of learning, particularly through curriculum reforms.

Karim D. Crow, In Search of ‘Islamic Lifestyle’• Muslims and their leaders carefully appraise and reflect upon consumption patterns in their society, in order to

understand potential benefits, risks, and harms unfolding in their midst;• They must consciously awaken a living concern with Islamic resources when responding to the pressures of

consumption and increased affluence;• They should design procedures and methods which may nurture more restrained and self-critical lifestyle choices

within the prevailing consumerist environment.

Abdul Karim Abdullah, Understanding the Causes of the Debt-Crisis: Interest-Based Financing• It would be time to phase out interest-based financing, for example by permitting businesses to sell their products

directly to consumers on a deferred basis;• It is necessary to enable consumers to purchase items on an installment basis, while ensuring that the credit price

is the same as the spot price in order to avoid ribā;• Microfinance should be promoted with incentives, such as tax advantages.

Eric Winkel, Views of Science and their Implications for Muslim Higher Education• European science with its technological success has to be placed within an overarching context anchored in the

two worlds of the Qur’ān: our consciousness of physical existence and corporeal phenomena, and the immaterial unquantifiable dimension of human experience;

• A re-reading of qur’ānic passages through the lens of great Islamic exponents will help expand the minds and hearts of students in the laboratory and classroom;

• The narrative of modernity as inevitable, irreversible, and teleological needs to be challenged by demonstrating the integrity of sciences and technologies.

Teoman Duman, The Value of Islamic Tourism: Perspectives from the Turkish Experience• “Islamically acceptable” motivations should be taken as the reference point for a definition of Islamic tourism;• The term ḥalāl should be used to describe the economy and the sector where ḥalāl goods and services are offered

to the markets;• Islam and tourism are multidisciplinary areas. Therefore, a joint effort is needed to deepen the discussion on Islam

and tourism.

POLICY RECOMMENDATIONS

The following policy recommendations have been excerpted from longer research articles carried in IAIS Malaysia’s journal, Islam and Civilisational Renewal, Volume 3, Number 4, July 2012

12 July - August 2012

EVENTS AT IAIS MALAYSIADATE EVENTS16th July Professor Dr Tariq Ramadan (Professor of Contemporary Islamic Studies, Oxford

University, UK) visited IAIS Malaysia and engaged in dialogue with the members/fellows of IAIS inlcuding the invited participants.

1st August Public Lecture on Intellectual Horizons of Contemporary Pakistan: An Overview. The speaker was Professor Dr Syed Nomanul Haq, who is currently a senior faculty member and Chair of the Residential Colleges at the Lahore University of Management Sciences (LUMS). Formerly, he had been a faculty member of Brown University and the University of Pennsylvania.

10th August IAIS Iftar Gathering 2012

29th August Public Lecture on Christian-Muslim Relations in Eastern Europe, with a special reference to Poland. The speaker was Professor Krzysztof Kościelniak, of the Institute of Middle East and Far East Studies, Jagiellonian University, in Kraków, Poland, and author of many papers and books on Islam.

Public Lecture on Christian-Muslim Relations in Eastern Europe, with a special reference to Poland, presented by Professor Krzysztof Kościelniak

Public Lecture on Intellectual Horizons of Contemporary Pakistan: An Overview, presented by Professor Dr Syed Nomanul Haq

IAIS Malaysia Iftar Gathering 2012 Participants during public lecture on Christian-Muslim Relations in Eastern Europe

Participants at the Roundtable Discussion with Professor Dr Tariq Ramadan

Members of IAIS during Iftar Public lecture on Intellectual Horizons of Contemporary Pakistan

Professor Krzysztof Kościelniak

Roundtable Discussion with Professor Dr Tariq Ramadan