“ The Global University in Islamic Finance ” PRE-EXAM QUESTIONS PES  Overview of Economics  Worldviews and Economics  Sources of Knowledge

“ The Global University in Islamic Finance ” Overview of Economics Q 1. Discus the problem of economics from both secular and Islamic perspectives.

“ The Global University in Islamic Finance ” Definition of Economics Economics is the social science that studies the allocation of scarce resources to satisfy unlimited wants. 3

“ The Global University in Islamic Finance ”  Scarcity of Resources (Economic resources are limited relative to wants)  Unlimited Wants (People’s desires to use goods and services that provide satisfaction.  Choice (Scarcity of resources requires choices to be made) The Economizing Problem 4

“ The Global University in Islamic Finance ”  Scarcity means that people want more than is available.  Scarcity limits people both as individuals and as a society.  As individuals, limited income, time and ability, restrict people from doing or having ALL what they like.  As a society, limited resources such as manpower, machinery, and natural resources limit the amount of goods and services that can be produced. Scarcity 5

“ The Global University in Islamic Finance ”  People must choose which of their desires they will satisfy and which they will leave unsatisfied.  When people, either as individuals or as a society, choose more of something, scarcity forces them to take less of something else.  Economics is sometimes called the study of scarcity because economic activity would not exist if scarcity did not force people to make choices. Scarcity Requires Choice 6

“ The Global University in Islamic Finance ”  People make choices about what goods and services they wanted.  People work harder and do business to earn income or make profits in order to satisfy their unlimited wants.  Commodities, money and profits constitute their happiness. Choice 7

“ The Global University in Islamic Finance ”  What is our main objective in this earth?  How to worship Allah the whole day? Economics from Islamic Perspective 8

“ The Global University in Islamic Finance ”  Islamic Economics is a social science which studies the economic problems of people imbued with the values of Islam.  It is the study of social science which enables people to perform their obligation to Allah and to their society Definition of Islamic Economics

“ The Global University in Islamic Finance ” It studies man not only as an isolated individual but of a social individual having;  faith,  ethics (believing in the six articles, his deeds is accountable to Allah as it is guided by Shari’ah.  he is also required to propagate good doing and prohibit bad doing al-Amr bil Maruf wa al-Nahy anil Munkar in the society (watch his business ethics) Cont. Definition of Islamic Economics 10

“ The Global University in Islamic Finance ”  Akhirah: the hereafter for accountability, and for getting the outcome of all deeds including economic activities, in an eternal life.  Economic and Non-Economic well- being for leading a good life and discharging socio-Islamic obligations in this world and for achieving the home of hereafter. Islamic Economic 11

“ The Global University in Islamic Finance ” How Islam views the Economic Problems?  Scarcity of Resources  Unlimited Wants &  Choice

“ The Global University in Islamic Finance ” Resources in Islam  Allah (swt) Has created resources in abundant.  However recourses in the eyes of mans is scarce/limited due why?  due to lack of means to reach this resources (which is the results of man’s choice such as lack of knowledge, skills, etc.)

“ The Global University in Islamic Finance ” Islam recognizes that human desires are unlimited. This is explained in the Quran and in the Hadith. Unlimited Wants 14

“ The Global University in Islamic Finance ” يَحْسَبُ أَنَّ مَالَهُ أَخْلَدَهُ Thinking that his wealth would make him last for ever!(104:3) Cont. Man’s Unlimited Wants 15

“ The Global University in Islamic Finance ” قال رسول الله (ص): « لو أن ابن آدم أعطي واديا من ذهب أحب إليه ثانيا ، ولو أعطي ثانيا أحب إليه ثالثا ، ولا يملأ جوف ابن آدم إلا التراب ، ويتوب الله على من تاب » “If man is given a valley of gold, certainly, he wants the second and third one and he will …..” Hadith Man is greedy 16

“ The Global University in Islamic Finance ”  Hence scarcity of means necessitates choice which can provide higher values but at same time performing one’s mission in this life.  Choice in Islam should be ranking according to need fulfillment and not to greediness Choice in Islam 17

“ The Global University in Islamic Finance ” Acquiring Wealth in Islam Is it prohibited ? Yes/No

“ The Global University in Islamic Finance ” When a man dies he will be asked on four: 1- His youth how he spend it? 2- His age how he spend it? 3. His wealth how he acquires it? & 4. How he spends it? عن ابي الدرداء قال قال رسول الله صلى الله عليه وسلم لن يزول قدما عبد يوم القيامة حتى يسأل عن أربع عن شبابه فيما ابلاه وعن عمره فيما افناه وعن ماله من اين اكتسبه وفيما أنفقه Cont. Acquiring Wealth in Islam

“ The Global University in Islamic Finance ” WORLDVIEW AND ECONOMICS Q 2. How can Islamic economics be explained within the context of Islamic worldview. Q 3*. Discuss the concept of khalifah in the production, allocation and distribution of resources from the Islamic perspective.

“ The Global University in Islamic Finance ” Worldview explain how man perceives this world. It denotes “a set of implicit or explicit assumptions about the origin of the universe and the nature of human life”. WORLDVIEW

“ The Global University in Islamic Finance ” SECULAR WORLDVIEW Every community or system is controlled or influenced by its own worldview. The different worldviews among communities or among system lead to dissimilar end means of human life.

“ The Global University in Islamic Finance ” - separation between religion and other aspects of life, - materialistic, - individualistic, - less socio economic justice - less public relations, - less concern with the hereafter life SECULAR WORLDVIEW (Man’s Way of Life)

“ The Global University in Islamic Finance ” - belief in a dual worldviews: this world & the hereafter - religion is part of his/her daily life - maslahah of the ummah (public benefit), - accountability, - trustworthiness, - transparency etc. ISLAMIC WORLDVIEW (Man’s Way of Life)

“ The Global University in Islamic Finance ” Islamic WORLDVIEW To understand the Islamic worldview let us first define the followings: 1. Islam, Iman, A’mal, Ihsan. 2. Relationship between Allah, man, nature, religion. 3. The nature and characteristics of man; man’s role as ‘abd and khalifah

“ The Global University in Islamic Finance ” Man as a Khalifah (Vicegerent and Slave) Man is the khalifah of Allah or vicegerent on earth and the resources at his disposal are a trust (Amanah). He must utilize them according to the will of the Creator and he will be held accountable for any misuse of these resources. It thus, follows that these resources are means to attain falah.

“ The Global University in Islamic Finance ” ‘ Adalah (Justice) Everyone is a khalifah, unity and brotherhood of mankind. This brotherhood would remain a hollow concept devoid of all substance if it is not accompanied by ‘adalah (justice).

“ The Global University in Islamic Finance ” Nature  Nature is the creation of Allah for man.  All resources in nature are means for man to attain his falah (happiness) in this world and in the hereafter.

“ The Global University in Islamic Finance ” Man’s aim in life Man’s aim in life is to achieve happiness not in this world alone but in the hereafter too, i.e. to achieve falah (success/prosperity).

“ The Global University in Islamic Finance ” The Islamic Worldview ( Ru’yat al-Islam li al-wujud ) An Islamic world view or Ru’yat al-Islam li al Wujuod, is the vision of reality and truth that appears before our mind’s eye reveling what existence is all about. It is defined as “a set of implicit and explicit assumptions about the origin of the universe as well as the nature and purpose of man not only in this world but in the hereafter too”.

“ The Global University in Islamic Finance ” Cont. The Islamic Worldview Hence the Islamic worldview can be described as a dual worldview, comprising both this world and the Hereafter. The Islamic worldview is based on Islam. All worldviews must include concepts on Allah/Tawhid, Man/Khilafah, Nature, Man’s aim in life, ‘Adalah

“ The Global University in Islamic Finance ” Muslim believe that this world is a temporary place for them to be tested in order to determine whether they will get the reward or punishment in the Hereafter. Cont. The Islamic Worldview

“ The Global University in Islamic Finance ” Q 4. Differentiate between secular and Islamic sources of knowledge in relation to economics. SOURCE OF KNWOLEDGE

“ The Global University in Islamic Finance ” To seek knowledge is a holy duty; it is obligatory on every Muslim, male and female. The first revealed word in the Qur’an was "IQRA" READ i.e. it encourages man to seek knowledge, to be educated. IMPORTANCE OF KNOWLEDGE IN ISLAM

“ The Global University in Islamic Finance ” SOURCES OF KNOWLEDGE IN ISLAM Knowledge can be classified into two kinds with respect to the sources of knowledge; 1. Revealed Knowledge and 2. Acquired Knowledge

“ The Global University in Islamic Finance ” WESTERN SOURCE OF KNOWLEDGE  Western source of based upon acquired knowledge, i.e. upon cultural tradition reinforced by strictly philosophical premises based upon speculations.  There can be no certainty in philosophical speculations in the sense of religious certainty based on revealed knowledge understood and experienced in Islam.