Dammam – The recent global economic crisis was not caused just by sub-prime loans and credit derivative swaps but the more fundamental drawback of the system was behind the meltdown.
C.H. Abdul Raheem, a senior chartered accountant, prominent scholar in Islamic Economics and general manger Finance and Business Planning with Tasnee Company- Jubail, expressed these views at a lecture on “Global Economic Crisis- an Alternate View”.
The event was recently organized by Thanima- a socio-cultural organization of Indian expatriates in the Kingdom here at a local restaurant.
Raheem, is also the founder of Alternative Investment Credit Limited (AICL) a non – banking financial institution, which is run by Islamic banking concepts, implemented in Kerala state in year 2001 with the approval of the Reserve Bank of India.
“Any economic system has to take care of different behavioral aspects of human beings, and moral part is very important, and systems based on material gains alone will not work in the long run,” Raheem said.
The economist said that Islamic economic system, which advocated a balanced combination of individual freedom and social responsibility backed by a strong moral base, was the only viable alternative.
“Islam has structural and compulsory wealth re-distribution mechanism such as Sadaqa, Zakat, Will, Waqf, law of inheritance etc. There were period in human history when these principles were successfully practiced and prominent economist lived in those time and wrote valuable books on Islamic economics and practice”, he said.
Raheem said that the two important symbol and icons of capitalist system – the interest-based banking and the speculative stock exchange system - had miserably failed.
“Capitalism, especially interest-based economy, has brought in huge disparities between the rich and the poor. The capitalist system is practically dead as the western governments has nationalized most of the banks and other industrial corporations, which is a big anti-thesis of capitalism,” he said, adding that implementing a non-interest banking and investment system, which is divine and an ethical procedure is the only practical solution to solve to cover up the present situation.
During the function he answered various questions asked by the audience. Earlier, the chief organizer of Thanima’s Dammam chapter, C.P. Musthafa welcomed the audience and K.M. Rasheed presented the vote of thanks. - SG