Malaysia and Islamic economics

Abstract

Islamic economics as a subject is relatively new in Malaysian universities but practically unknown in corporate business. People may have heard about Islamic finance but there has been relatively less discussion lately on Islamic economics and many may think that these two are the same. To some extent there are similarities between these two fields of studies since economics is the mother knowledge of business and finance. The same is true for Islamic economics. But Islamic economics today as a discipline is still a baby although Islamic history is rich with economic lessons and policies crafted by the early Caliphates to suit the needs of Muslim nations then. Currently, Islamic economics has relied tremendously on the Shariah and Islamic commercial law (fiqh muamalat) with its undue emphasis on fiqh. The prohibition of riba (usury) and the implementation of the zakat system has been the backbone of Islamic economics, thus it is not surprising that Islamic economics is sometimes labeled as capitalism minus riba plus zakat. Focus on the financing aspects of economic activities has been overwhelming. It is normal to see discussions on Islamic economics to revolve around financial issues such as banking and the capital market. Islamic finance seemed to have overtaken similarly important issues such as economic methodology, the problem of the consumer and the firm, market structures, factor markets, public finance, poverty and economic development. But Islamic economics is not about financial institutions alone. It seeks to examine the behaviour of man in the market place, his likes and dislikes and how these tendencies have impacted his way of conducting economic activities. This essay looks at 4 basic phenomenon's or more accurately projects of Islamic economics in Malaysia.