Riba and the Pakistani Economy

Re: # 41

Zeemax:

``Japan reduced interest rates to zero and has maintained it at zero since a few years. But even zero rates are still interest rates in an overall interest rate regime....

So why do the banks continue to loan money. Whats going on?

Quite realistically, many people reject the interest-free system outright because it is difficult to believe the people in the 7th century knew about the vast implications of an interest based regime...

Interest has been historically seen as an intrinsic evil. So it is not just the Quran which condemns the practice, but the Torah also. Roman law also introduced penalties against the use of compound interest.

Re: #48 by rf786

Morally we suffer from selective amnesia....

Maybe others do. Maybe even others who take the same line as me do. But I would like to think that I don`t. I agree that there are other problems within our societies that need to be addressed. I agree that corruption needs to be tackled. But that doesn`t mean that I should turn a blind eye to this type of exploitation. Does it?

I could not get the actual text of the Al-azhar fatwa itself, although I got a few news reports. If you have a copy let me know.

Meanwhile you did not answer my point on the Quranic verse.

Thanx

Musa

#46 by Urstruly on June 10, 2006 9:20pm PT
what you are advocating is social justice, we don`t need islam for that, europe did it with social democracy. there is no reason why islamic and the third world can`t do same, infact some are already doing it, i.e south korea, malaysia.

I have been tracking this islamic finance business for the past 16 odd years ever since Malaysia started on the sukuk bandwagon. Financial Institutions love this, its a one way bet, nobody loses. Across the arab world, you get what is called as non-interest bearing deposits. One way bet, you cant lose, you take in the money from people who dont want interest and loan it out. Which is the reason why you have strange liquidity sinks and peaks in the middle east markets.

ALL justifications given by the sharia boards are pure unadulterated BS. And I mean ALL, no exceptions. So if an instrument is publicised as sharia compliant, immediately know that they dont know what the heck they are talking about, each and every financial transaction is either interest bearing or has elements of explicit risk involved. It is all a way to make money out of the faithful. Then again, its the same with the ``socially responsible investment``, you are paying for your consience in that case, and in case of these islamic instruments, you are paying for your faith. Best of luck.

The first responsibility of Islamic government in the Islamic Republic of Pakistan will be to make arrangements and establish policies that are conducive to and facilitate the people of Pakistan to earn decent and honest living which is called Rizq-e-Halal. In order to achieve this objective we will have to eliminate the bloodsucking social class that has lost its fear of God. Those who do not fear God are the enemies of God and His people.

Since interest and Riba is haraam, the institution of banking will be replaced by a federal government financial institution that will be called Baitul Maal or People`s Treasury. Initially, it will contain all the liquid assets that are currently owned by by all national and private banks. The role of institutionalized lending by any private or government institution, in the present day sense, will be abolished. THe trillions of rupees currently owned by these banks will be loaned to people who would want to establish a business. These loans will be absolutely interest free, that is, Qarz-e-Hasna. However, the borrower will have to pay back the loan in a fixed time (it may be in installments) with a mark-up that would be equal to the rate of inflation for that period. In addition, borrower would also pay the administrative charges (which will include the wages for those who administer the loan process i.e. baitul maal employees etc). In other words a bank in Islamic republic will be absolutely non-profit. For loans upto Rs. 500K no collateral in fixed assets will be required. However, there will be stern process in place to deal with defaulters. A network of collection agencies, run by federal investigators will be establihed. The Baitul Maal will be required to publish a monthly financial statement, which will have absolutely no hidden or secret line items. The list of borrowers will also be publihed periodically along with their borrowed money figures. Since, the money lended is from Peopl`s treasury, therefore, confidentiality clause will not apply. This pool of funds will be replenished with a part of state revenues annuallyand partially through zakat and usher funds. The bulk of zakat and usher funds will be used for pension for all Pakistanis of retirement age, every child will be given a state stipend from the day she was born until she will reach the 16 years of age. Education for every child in Pakistan will be free upto Secondary school. Every jobless Pakistani will be given unemployment allowance for 12 months and he will be loaned (interest free) to continue his higher or vocational education. Unemployed will be given preference for businss loans.

I am not describing a society living on Mars; almost every Western country has established this welfare state in their country. Pakistanis have to make a decision today, whether they want this achievable dream materialize in their country or they wish to continue their misery under the oppression of a corrupt, amoral, and bloodsucking class. There is absoluetly no other way to our freedom without eliminating this malignant tumor festering among us. It is now or never.

Re: # 46

urstruly,

``Since interest and Riba is haraam, the institution of banking will be replaced by a federal government financial institution that will be called Baitul Maal or People`s Treasury. Initially, it will contain all the liquid assets that are currently owned by by all national and private banks. `` .................. so you are proposing that we nationalize the banks (once again) but this time put maulvis in charge of the ledgers instead of clerks and babus ? ......... so we get rid of competitive commercial banks and replace them with yet another government run agency run by corrupt officials - how will that make things better ?

............. like i said, the bearded classes keep on wanting to reinvent the wheel instead of simply accepting the fact that a round wheel is better than the triangular design suggested by primitive bedouins ............

........ and you must really think that everyone is stupid when you say: ``These loans will be absolutely interest free, that is, Qarz-e-Hasna. However, the borrower will have to pay back the loan in a fixed time (it may be in installments) with a mark-up that would be equal to the rate of inflation for that period. In addition, borrower would also pay the administrative charges (which will include the wages for those who administer the loan process i.e. baitul maal employees etc).``................ that is exactly what my bank in pakistan does today when they pay me the ``profit`` - the profit just happens to be pretty close to the goinng interest rate ................. remember, inflation + admin charge is still interest regardless of what you call it ............. all you are doing is putting lipstick on a pig and trying to pass it off as a horse ......... shame on you !

Re: # 54

I do not belive in the capitalist propaganda that nationalized institutions are always corrupt and bad. All around the world, government take steps what is best for their citizens. That is why we see universal health coverage run successfully by Canadian government and almost all of Western Europe.

In Pakistan failure was because of a bloodsucking lawless class who consider itself above any law. In 58 years of Pak history not a single government has ever been accountable to the people of Pakistan. They consider the wealth of Pakistan as the milk of their mothers and pakisatn as their personal fiefdom. When we will establish a government that will not rule people of Pakistan but serve the people of Pakistan, and people of Pakistan will know that it is their country and its wealth is their wealth they will chop the heads of those who even think of being unaccountable to the people. That will be the day when a police wala will address a tongawala as ``Janab` and not as ``oye maa yawway aidhar aa``. THis is our destination. In order to get to this destination we will have to eliminate the ghulamzaday and haramzaday left by british and propped by neo-colonialsts.

Re: # 55

``When we will establish a government that will not rule people of Pakistan but serve the people of Pakistan`` ............... but you already have a government that is serving you right here in michigan !

.......... you might be surprised but i agree with you on health care in the usa - it is a mess .......... but the answer is not in a beauracratic national health service - it can be done by regulating the insurance companies, the malpractice lawyers, the american medical association and expanding medicare and medicaid to insure the uninsured ....... i think governor romney is on the right track in massachusetts - you know that he is a fellow michigander, don`t you ? went to cranbrook, was a vp with bain and then founded bain capital, a very successful vc firm ......... why don`t you and i vote for romney as president in 2008 - it is a lot better than wating for the khilafat to be established in washington dc with marion barry as the first khalifa ........... look, they already have a khilafat in mogadishu and what has that done for them ?

........... urstruly, turn in your al-mohajiroon card and stop dreaming about establishing the khilafat because pretty soon they will find osama, his one-eyed brother-in-law and zawahiri, the man with the mark of the devil on his forehead ............. go down to eight mile and get a few lap dances, it will make you feel better - if you want, i will come along ........... here again, i agree with you that the dancers should be nationalized - after all, they are a national treasure !

Re: # 46

.......... and pigs will fly !........... why, some of them might even be able to make it to the eighth heaven, thus breaking the previous record held by a flying horse !

Re: # 46
You may not be describing a society on mars but sure do sound like an alien from a planet millions of light years away from earth.

Islamic Govt? Govts are made of ppl, flowery words are excuses for totalitarianism, exclusion of minorities, no room for dissent. Where do u see Islamic society in Pakistan or this world or when was the last time one was sighted?

Liquid assets currently owned by National (??) and private banks? Abay jahil, jub putha na huwa karey tho muth bola kar. These liquid assets are loans granted against CUSTOMER deposits. Banking ki abcd aathee naheen aur challay hein lecture denay.

Care to expand on the concept of inflation? why dont u be honest and say LIBOR ie London inter bank offer rate, cause thats what all the Islamic banks are doing.

If there is a malignant tumour in our society it is in the form of semi-literate maulvis parading themselves as all knowing pure breeds, in actuallity they are good for nothing power grabbers including the Taqi Usmanis of this world.