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STRENGTHENING ISLAMIC INSTITUTIONS AND IMPROVEMENT OF
FUND MANAGEMENT: STRATEGIES FOR IMPROVED ECONOMIC
ACTIVITIES ENSURING GROWTH OF THE UMMAH
MR. SIDEK BIN SANIFF
Former Senior Minister of State for Ministries of
Education & Environment, Republic of Singapore
The September 11 incident, unequivocally demarcated the lines between the previous and the
present eras due to the bad judgement in politics. It has created a new era - we are now in a
totally unknown era. The global economic slowdown is unprecedented. We are now in deep
recession; some have even started saying that we are in a state of depression.
As it is already, America (at the point of writing) has lost more than 10 million jobs; bailing out
of the auto industry with billions of dollars. Japan’s economy is in peril; disastrous. For instance
Toyota’s operating profit was the lowest in 25 years.
British Prime Minister, Gordon Brown, assured his people that he will create 100,000 jobs within
2 to 3 years; while President Elect Obama has forecasted and promised that 3.3 million new jobs
will be created in the next few years.
In order to save the economy from financial implosion, US Federal Reserves has adopted, like
China and Japan, ‘Quantitative easing (QE) – an extreme form of monetary easing that pushes
interest rates to 0 percent so as to flood the system with access liquidity’. In Singapore with
effect from 1st Dec 2008, in order to lay down the ground works for engaging the hostile world
wide economic climate, enhancements were made to its various existing business financing
schemes to overcome credit tight-fistedness. This will support an additional S$23 billion dollars
in loans and trading. With more if need be to help businesses gain access to credit facilities. Up
to 124 000 local companies stand to benefit from greater liquidity and credit access essential for
survival. This is according to ‘NTUC This Week’, 28 Nov 2008 during a joint press conference
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involving the Ministry of Finance, Ministry of Trade and Industry, Ministry of Manpower, the
National Trade Union Congress (NTUC), and the Singapore National Employers’ Federation.
Many companies feeling the heat have had to downsize or even go bust. Thus resulting
invariably in the increased retrenchment and unemployment rates. The name of the game is ‘Cut
cost to save jobs, not to cut jobs to save cost’ this has been said by the Secretary General of
NTUC; Mr Lim Swee Say. Our task is to upturn the downturn.
While in the international arena Frank Ching wrote in the New Straits Times, Thursday 11th Dec
2008, Titled: ‘China gains confidence from America’s error’, cast doubts on whether China’s
investments in particular the US$750 Billion or RM2 Trillion in treasury bonds that it holds
maybe at risk amongst other things.
Mitchell Orenstein Professor of European studies, at John Hopkins University, School of
Advance International Studies lamented that ‘The era of free market capitalism launched in the
1980s, by British Premier Margaret Thatcher and President Ronald Reagan – often called
‘Neoliberalism - is OVER’. Already, Latin American countries that embraced free market
policies in the 1990s rejected them in the mid 2000s. Russia which adopted market oriented
policies in the 1990s, moved to a managed form of State Capitalism
in the 2000s as its
‘oligarchs’ were forced to submit to State control – the Straits Times Dec 2008.
He further questions, in doubt, ‘But is that a good thing?’ While many will tempt to celebrate the
end of Neoliberalism, it remains to be seen whether what succeeds it will be an improvement.
Various forms of Statism have been tried in the past; all had proven to be lacking. After all,
although Neoliberalism was technocratic and elitist, it was nonetheless a form of liberalism, and
consistent with the spread of Democratic governance worldwide.
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The world has experienced Socialism and Capitalism. It is time to consider seriously our Islamic
Economic System.
Recently when I was interviewed for a book about ‘Reminiscences of former MPs’, I had this as
a conclusion; ‘The world of post 911 is entirely a different world. There is no model to follow.
Yesterday’s formula cannot solve today’s problems. There will be new challenges that need new
strategies. The global world has become SMALLER, the challenges BIGGER.’ Stay entrenched
with strong values. Work hard, there is no substitute for hard work not even intelligence. Last but
just as important, keep HOPE alive. For us keeping hope alive is just one aspect. The other is the
FEAR of Allah s.w.t. Both aspects must go hand in hand.
As a Muslim I ponder with a long sigh, asking deep in my heart of hearts, what was written in
the Al-Quran and those voluminous sayings of our Prophet (peace be upon him) regarding the
situation we are facing - the world is facing now. Maybe at this juncture its worth our while to
quote from Imran N Hosein in his book Jerusalem in the Quran, gave due emphasis to riba’ by
quoting the holy Al-Quran and hadith to that effect.
In the Al-Quran surah ‘Al-Baqarah 274-280’ which states ‘…Those who devour interest do not
rise except as rises one whom Satan has smitten with insanity. That is because they say; ‘Trade
also is like interest; whereas Allah has made trade lawful and made interest unlawful….O ye
who believe! Fear Allah and relinquish what remains of interest, if you are believers…But if you
do it not, then beware of war from Allah and His Messenger…’.
And hadith narrated by Umar Ibnu Khattab (r.a) which says ‘…the last verse to be revealed was
on Riba’ but the Messenger of all (pbuh) was taken without having expound it to us. So give up
not only Riba’ but Reebah (i.e. whatever raises doubts in the mind about its
rightfulness)…reported by Sunan Ibnu Madja and Darimi; and of course not forgetting surah
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Al_Nadjmi verse 39;…’ man is entitled nothing except that which he laboured…’ No
speculation, nor games of chance. Like politics, banks are not gambling dens.
Let us observe this phenomenon by first understanding the capacity of the human mind which
entails with the role of the power of ‘ilm’ (knowledge). Let me quote an interesting observation
by Said’ Farid Alatas. He gave an interesting definition about ‘ilm, in his book ‘An Islamic
perspective on the commitment to inter-religious dialogue’ on page 25;
i. All knowledge comes from Allah
ii. Muslims have never recognised the division of knowledge between secular and religious.
All knowledge comes from God but such knowledge is either about God as in theology
for example or about God’s creation as studied by the various rational sciences.
iii. Islam recognises various sources and methods of knowledge acquisition, including sense
of perception and reasons.
iv. The acquisition of the various sciences is obligatory upon all Muslim societies because
this is one way of taking God’s creation seriously. Furthermore, the study of the world of
empirical things points to the creative.
If we agree in those definitions, which I do, after Badar, we learn the non Aqidah subjects or
Fardhu Kifayah from non Muslims but 260 years later we gave the world, the world of science
and technology. We not only observed but meticulously followed with experimentation. After
that we produced many thinkers including
political thinkers, Sufis, Philosophers, Middle
Roaders, Renaissance in the near and middle east, as well as Renaissance in South East Asia
such as Abu Yusop, Al-Farabi, Al-Mawardi Ibnu Khaldun, Abdul Kadir Jalani, Ibnu Arabi,
Jalaludin Rumi and Philosophers like Al-Kindi, Ibnu Sina, Ibnu Baja, Naseer Ad-din Tusi, and
AlGhazali.
The scenario portrayed above is like a reminder, persuading and coaxing us to relook and revisit
the fundamental teachings of our beloved Prophet (pbuh) as narrated by Abdullah Bin Omar; ‘O
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immigrants, I seek the refuge of Allah Almighty against five traits of characters lest they should
grow into you…’
i. Against modesty if immodesty prevails in people if they are hit by plagues, epidemics
and even new diseases not even heard by their elders
ii. Against cheating in weights and measures. They will be hit by famine, price hikes,
vigorous labour and over work and oppressive rulers.
iii. Against non-payment of zakat – rains stopped
iv. Against religious apathy of people, for when a community breaks its covenant and His
messenger (pbuh), then Allah s.w.t makes alien enemies sit over them who snatch away
that belong to them without any justification.
v. Against the apathy of the ruling authority, for where the rulers of the people fail to decide
matters in accordance with the book of Allah because the injunctions revealed by Allah
do not suit their fancy, then Allah s.w.t causes mutual hatred and disputations descends
upon them.
Besides the financial turmoil and the collapse of US economy, we are now facing the predictions
made 1400 years ago. As Muslims, we should take heed of these reminders and plan out critical
measures to be taken and execute these plans. These are for us as ‘Khalifahs’ of the world. These
challenges should be embraced and confronted with thoughtful finesse.
Despite the turmoil in the conventional financial instruments and practice, to date our Islamic
financial institutions have escaped unscathed. I am sure you would agree the primary reason for
this is because our act is in accordance with teachings in both the Al-Quran and the hadith as
taught by our beloved Prophet (pbuh).
This should motivate and convince us to strengthen our financial institutions including, Islamic
banking, Islamic Insurance (Takaful), Islamic investments, Islamic pawn broking (Ar-Rahnu),
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and the general employment of technologies to support our Islamic economic activities such as
electronic zakat payments, direct zakat debit and many other related applications of technologies.
I would like to bring to attention a recent article in the Berita Harian, 23rd Dec 2008, written by
Mr. Azahar Mohd pertaining to pawn broking in Singapore:
i. The pawn broking business is even today a thriving business
ii. No. of pawn shops has increased from 91 outlets in 2004 to 113 in 2008…quoted from
Insolvency and Public Trustees Office (IPTO).
iii. With S$2.7 million in trading last year and a turnover reaching S$1.6 Billion, up from
S$1.1 Billion 10 years ago.
Since the start of the economic crisis, more middle income earners are visiting the pawn
shops for short-term loans. Pawning amongst others luxury watches such as Rolex, Omega
and Longines. 40 to 50 percent of these customers are Malays, while 30 to 35 percent are
Chinese and the remainder comprises of other races.
Comment:
For those who are willing, the pawned gold when auctioned can go as low as 5 to 8 percent
of the actual gold value. Gold at the goldsmith cost between S$44 to S$45 dollars per gram
while auctioned unclaimed pawned gold can be purchased at between S$40 to S$42 dollars
per gram.
In the midst of global economic turmoil, our Islamic economic systems such as Islamic banking
and even Ar-Rahnu has gone almost unscathed, unaffected by these turmoil, perhaps it forces us
to ponder if the Islamic Economic Systems of finance and banking is perhaps the solution needed
to rectify and stabilise the world’s economies today.
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I believe with an open mind, transparency, sincerity and prudent adherence to Islamic
governance, we should approach this possibility through the following approaches:
i. Continual and progressive improvements of our banking systems and institutions in this
part of the world with countries like Malaysia, Indonesia and Brunei taking lead roles
while guiding and supporting countries like Thailand, Philippines, Cambodia, Vietnam
and Singapore to follow suit at a suitable pace.
Progressive alliances and efforts between Middle Eastern and East Asian Economies
should be formed to promote, employ and grow
Islamic-Economic based
activities including banking, Ar-Rahnu and other facilities to a level that will attract the
interest and willingness of non-Islamic countries to adopt the Islamic system of banking
and finance through realisation of its fairness, robustness and adaptable application of
these principles. The West and East need to co-exist in a spectrum of cohesiveness and
acceptance so as to create a better singular Global system especially in light of recent
findings and events exposing critical weaknesses in the current conventional system.
We should impress upon them the very unique concepts of our Islamic-economic systems
such as profit sharing (‘Mudharabah’), joint-venture ‘Musyarakah’ joint-venture and even
cost-plus (‘Murabaha’) which is generally more acceptable to the masses.
ii. To successfully achieve this, we need to go back to basics. A country can only be strong
when it has successfully strengthen the following environments:
a. Good Character (Akhlak)
b. Knowledge (‘ilm)
c. Cultural and social (Budaya dan Sosial)
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d. A harmonious combination of economic, politic and administrative components.
Emphasis should be given to the administrative component and this has to be executed with
wisdom (Hikmah). Wisdom not in the context of mere submission or lip service, but rather
wisdom in the context of Islamic values; ‘How not to say the right thing at the wrong time, many
a times when we are right, we feel that it is correct for us to say it regardless of time, place or to
whom. This is the gravest of all mistakes.
As per hadith Rasullah s.a.w ‘Oh Muhammad invite people to your Lord with wisdom and better
council…and argue with them in such voice, as its best; verily your Lord knows the one who
wonders astray from His path and He knows those who are on the right path.’
Many will ask how do we know when ‘Not to say the right thing at the wrong time’? To derive
the answer we need to look back into time, into the history of Islam and the efforts of our
beloved Prophet (pbuh) Muhammad s.a.w. For instance it does not suffice for a Muslim to be an
‘Abid’ (staunch practitioner of Islamic Ibadah), he has to also be an ‘ibad’ (a servant of Allah).
Verily Allah s.w.t loves the work of his servants especially the Prophets (pbuh) and his
companions (r.ah) in their effort of ‘Da’wah’ by ‘ziarah’ and spreading the message entrusted
upon them. It is the duty of each Muslim to spread the teachings of Islam to all. The efforts of a
good Muslim should not be confined to only worldly matters but the continual dissemination of
the teaching of the Prophet (pbuh) should also prevail.
From another perspective, ‘The minimum expectation of a Muslim is that his hand and his mouth
(tongue) do not injure people. The maximum expectation is his health and his wealth are for the
Ummah (mankind)’ with emphasis given to the message and not the messenger, we thus become
borderless. Sometimes perceived differences caused by man made perceptions can cause
disharmony amongst the Ummah or mankind through our own incapacity.
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Yet another avenue for us to seriously look into, even fine combing it, is in the area of
‘Mesyuarah’. It is indeed shameful when many governments and institutions in the world of
Islam fail to follow the philosophy and the practice of ‘Mesyuarah’ whilst many a time the nonMuslim practices it. In a ‘Mesyuarah’, we are asked to unify our hearts and mind in seeking truth
not winning or avenging. There is no ‘Mesyuarah’ before and after the ‘Mesyuarah’. ‘Satan’ will
play his part cunningly because of the failure of our ‘Nafs’ and manipulate our ever lusting
desire.
It is one of the greatest gifts from Allah s.w.t stated in the Al-Quran; it was one of the pillars and
basis of Islamic greatness. The Prophet (pbuh) and his companions, the Sahabah (r.ah), made
decisions collectively by using three principles:
i. Based on majority
ii. Sometime minority opinion
iii. In fact, though rarely; sole decision of the Amir, the Prophet (pbuh) or Khalifah.
Everybody during the time of the Prophet (pbuh) understands the functions of ‘Mesyuarah’ so
much so that nobody complains after decision by the majority, no pointing fingers as if the
decision was based on cronyism, when it was based on minority and finally nobody accused of
one being a dictator when the decision was made by the Prophet (pbuh) or the Khalifah alone.
Even President Elect Obama, in his book; ‘The Audacity of Hope’ mentioned about
‘Mesyuarah’; he lamented ‘lawyers or political operatives – a profession that tend to place a
premium on winning arguments rather than solving problems.’
Another point for us to follow closely is a comment made by a prominent Islamic scholar in
Singapore Ustadz Ahmad Sonhadji Bin Muhammad Milatu;
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Four key ingredients of a successful business are:
i. Tawakal
ii. Inabah (Stop for a while and check if there is any ‘Haram’ elements, especially when the
business is good - if there is, ‘Inab’ then ‘Taubah’)
iii. Be afraid of Allah and not be afraid of losing profits or income
iv. Redha (Accept the outcome)
InsyAllah with ‘Hidayah’ from Allah s.w.t, we can reflect and introspect on these fundamental
philosophies of Islam that can bring about escalated changes. With His blessings, we can raise
Islam and its devotees to their rightful places of ‘Khairul Addeen’ and ‘Khairul Ummah’ in the
eyes of the world. InsyAllah.
To raise Islam to Its rightful place in the eyes of the world; in this highly modern and technology
based, and biased society. We need the support, acceptance and tolerance of the mass media to
remove the ‘Distortion’ pertaining to Islam.
Sumbul Ali-Karam-Ali, in her book ‘The Muslim next door - the Quran - the media and that veil
thing’…on page 221 wrote, ‘The media systematically, attaches the pre-fix Islamic to any crime
that has the vaguest connection with Muslim or Islam…’ After the Sept 11 attacks, it is easy to
say with the perfection of hindsight’…’I told you so’ We were right to suspect ‘Muslim
terrorist.’ But al-Qaeda is only one organisation and terrorist of all kinds exist in the world. For
example, the armed wing of the Irish Republican army attacked sub way stations in London for
years and the racist atrocities committed by somewhat white-supremacist groups such as the Ku
Klux Klan (KKK) are based on those groups’ interpretation of the Bible. Jewish extremists have
slaughtered worshippers in Mosques. The people who blow up abortion clinics do so because of
their religious beliefs. Buddhists use chemical weapons on the Japanese subway to kill and injure
numerous passengers. David Koresh, who died as an extremist not as a representative of
Christianity. Over 900 followers of a Christian cult were massacred in Uganda, in early 2000 by
their cult leader.
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But the media does not use the term ‘Catholic terrorist’ or ‘Protestant terrorist’ or ‘Jewish
terrorist’ or ‘Buddhist terrorist’ or ‘Hindu terrorist’, and not because there have ever been any.
Violence is a characteristic of human kind, yet Islam is continually used as an explanation for
violence.
In April 1995, Timothy McVae blew up the Arthur P. Murrah federal building in Oklahoma City.
The media, formed with the opinion of those convinced that…’Islamic terrorists had done the
deed’. Composite profiles of the perpetrators, portrayed them as dark haired and dark skinned.
And witnesses described them as Middle-Eastern looking. They turned out to be light-skinned
and light-haired and an American.
Again, in page 225 she said, in order to understand how removed American images of Islam are
from most American Muslims, it is useful to understand the specific characteristics of the
discourse. For example linguistic professor Jeremy Hanzel-Thomas, lists entire paragraphs of
stereotype commonly applied to Islam including:
i. Fundamentalist
ii. One dimensional
iii. Incapable of integration or assimilation
iv. Backward
v. Uncivilised
vi. Hostile
vii. Fanatical
viii. Terrorist
ix. Oppressive
x. Negatively exotic
xi. Bent on imposing on the whole world a rigid theocratic system of government which
radically overturn every principle of freedom and liberal democracy, cherished by the
Western world
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I cannot articulate how immeasurably grateful I felt when doctor Hanzel-Thomas recited in one
sentence 33 examples of inane stereotypical adjective purporting to describe Islam, and finished
with these words; ‘I have to say I don’t know a single Muslim who embodies even one of these
characteristics and I have Muslim friends and colleagues in all walks of lives and from many
cultures all over the globe’
Hopefully the natural characteristics of ‘Rumpun Melayu’ of tolerance, forbearing and being
considerate, coupled with positive Islamic values, will be the impetus force that will gel the multi
racial societies of this region and the world.
The world has moved from one era to another, from one generation to another and from one time
to another. From the Romans to the Greeks, from the Israelis to the Christianity and Islam, from
British to the Americans. September 11 has opened a new era, a new page in our history and
provided human kind with a unique opportunity to revisit and relook it values, emphasis and
importance. Islamic characteristics and values can and should be rejuvenated for the benefit of
all human kind.
If there is one word that a business man must have, that word or character is ‘Amanah’.
If there is one term suitable for a politician to adhere, it is ‘Upholding justice’.
If there is one word for an Ummah to embrace, that word is ‘Adil’.
Without ‘Amanah’, our PhD means nothing.
To not be able to ’Uphold justice’; your intellectual courage voicing truth, how can one expect
the physical courage?; the readiness to die for your religion, for your race and your country?
Without an Ummah who is ‘Adil’, then we may make the same mistake, made during the
governorship of Amr Al-As (r.a) whose followers took a piece of land from an old Jewish
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woman in order to enlarge their mosque. Even though the compensation was more than
reasonable, the fact remains, she didn’t want to part with her beloved piece of land. She
complained not to the governor but to the Khalifah, Umar Ibnu Khattab (r.a). Umar Ibnu Khattab
(r.a) wrote with a very short one sentence reply ‘Oh Amr Al-As is the Caesar of Persia more
‘Adil’ than us?’ Amr Al-As (r.a) understood what he (Umar Ibnu Khattab) meant, he ordered the
mosque be demolish the land returned to the old woman. The old woman then understood what
justice meant to the Muslims. In a nutshell, she became a Muslim and the Mosque remained
intact.
There is a saying amongst Malays; ‘To know if the fish is fresh or not, look at the Head, if the
Head is fresh the rest of the body will also be fresh.’ Qualities of leaders are paramount in Islam,
the Prophet (pbuh) especially has shown it and it was followed meticulously by his companions,
and then the Ta’biin. These are the criteria of an excellent Ummah in attaining Allah s.w.t
pleasures by portraying pristine values and middle-way community (Ummatun wa’sata).
Extremism is not Islamic. In fact, the best of mankind are those that bring benefits to others the
most (Al-Baihaki and Al-Qudhaie)
The challenges ahead are staring straight into the eyes of the Muslims, while time is fast ticking
away. This is our time. Our time is, NOW!
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