By Abdul Aziz VK, TwoCircles.net
Kochi: While western countries are exploiting the rest of the world using interest based financial system, the interest free economic thinking becomes a revolutionary concept, says the prominent political leader and a member of Kerala government planning board, CP John.
Many European countries, particularly England and France positively initiated interest free banking institutions officially, a third world country like India still expresses its hesitation and this is very pathetic, John opined inaugurating a half day seminar in Cochin, on ‘Economic Development: An Ethical Approach’ organized by Indian Forum For Interest Free Banking recently at Kerala Chamber of Commerce Hall, Ernakulam.
After the financial crunch of Wall Street, western economists are more receptive in accepting the scope of interest free banking. But it is very paradoxical that a Harvard educated economist like Subramanyam Swamy is crusading against such institutions that is obviously hypocrisy, in no way a democratic attitude.
According to John, every segment of the society irrespective of caste and religion should march forward demanding an interest free banking system as it is beneficial to the downtrodden people. If the government sincerely follows its own welfare policies, there is no other way but to experiment with newly emerging views in economic thinking like interest free financial system.
CH Abdurahim, a chartered accountant by profession, and the chairman of Forum for Interest free banking presented a scholarly paper on ‘Economic Development: An Ethical Approach’. Profusely quoting many western mainstream economic journals and economists, Abdurahim substantiated his case with solid statistics and case studies.
In a Power Point presentation, Abdurahim invited the audience to the recent comments by internationally reputed journals like The Economist which once had written, “in a global recession, Islamic finance looks an attractive business. Worldwide Sharia-compliant assets grew by 29% over the past year to $822 billion, according to The Banker. French officials fret that Paris is missing out on its share, particularly to London, whose multicultural approach gives an open-arms welcome to Islamic investors”(12 Nov 2009).
He thematically divided his presentation in to four parts namely, the definitions of development given by economists, historically tested systems of development, the rationale of ethics in development and finally alternative economic thinking like Islamic economic system and its contextual relevance.
Abdurahim pointed out the definition of development forwarded in “ UN Millennium Development Goal – 2000” as Elimination of poverty and hunger , Achieve universal primary education, Promote gender equality and empower women, Reduce child mortality, Improve maternal health, Combat deadly deceases – AIDS, Malaria etc.
Ensure environmental sustainability and develop global partnership for development. These indicators explicitly reject the traditional concept of mere GDP as the prime indicator of development. While analyzing the capitalist system, he quoted the President of USA, Barack Obama, “…we can’t go back to an economy that’s built on a pile of sand, on inflated home prices and maxed-out credit cards, on overleveraged banks and outdated regulations that allow for recklessness of a few to threaten the prosperity of all.”
This clearly illustrates the unsustainability of capitalist system as perceived by its own classical theoreticians. In presentation, Rahim quoted Sir Mark Tully (former BBC Chief in India) who said, “We do not need to have an economic situation that is driven only be drastic consumerism. The market culture we’ve grown into has become grossly materialistic. But there’s a higher goal to life than buying a motor car”.
Surveying the recent financial crunch and its aftermaths, he debunked the main tenets of conventional economic systems and explained the vulnerability of a financial system that is deeply divided masses in to the haves and have not’s. The pattern of economic development, as attested by decades of growth of modern countries, shows the widening gap between the rich and the poor.
Rahim also quoted Bill Clinton, the former president of USA, commented in an address given in Oxford University in 2007 as “The most critical challenge facing the governments in the coming decades will be how to narrow the gap between the rich and the poor”.
In the concluding section of the presentation, Rahim put forward an alternative economic system, Islamic Economics as a panacea for the modern ills which is articulated in a Prophetic saying, “He whom God has made an administrator over the affairs of people, but remains indifferent to their needs and their poverty, God will also be indifferent to his needs (in the Hereafter)”.
He also quoted The Holy Quran, “Those who devour usury will not stand (on the Day of Judgment) except as stands one whom the “satan” by his touch has drawn to madness……(Quran 2. 275) which show the speculative and satanic overshadowing of present pitfalls.
The presentation was followed by a lively discussion.
The Vice chairman of Forum for Interest Free Banking, OP Ramankutty presided over the seminar. The Forum General Secretary CK Anver had given the welcome speech and the vote of thanks was by Shahir Ismail.