New Age Islam
Wed Oct 05 2022, 08:46 AM

Islamic Society ( 6 Jul 2018, NewAgeIslam.Com)

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Value System of an Islamic Economic Model Is Universal

By Robin Augustin

July 5, 2018

Economist Kamal Salih today mooted an Islamic economic model that is needs-based and “somewhere between a capitalist and a socialist system” to address wealth inequality in the country.

He said such a model could be adopted as an alternative to the New Economic Model (NEM) proposed by the previous government.

The Universiti Malaya adjunct professor said given that 70% of the Malay community did not vote for Pakatan Harapan in the recent general election, it would be difficult to run away from dealing with Bumiputera policies although race did not determine wealth inequality.

“Inequality within the Chinese community is worse than before,” he told reporters after meeting the Council of Eminent Persons (CEP) today.

He said the NEM, which is more market-based with more liberal approaches, had failed to address unequal wealth distribution.

He also said inequality was growing between income groups and that this cut across all races.

The NEM was introduced by former Prime Minister Najib Razak in 2010 with the goal of doubling per capita income by 2020.

Kamal said he was looking at how growing inequality could be dealt with, noting that the current system is pro-business, capitalist and more driven by profit margins.

He also said the failure of the systems Malaysia had tried over the past 40 years wasn’t due to systemic weaknesses but rather the failure of institutions, adding that this had to be dealt with.

Kamal said the institutional failures in the last 10 years showed that the past government had “run into the swamp”.

“I’ve been looking at this for 10 years, an Islamic economic model which is somewhere between a capitalist system and the socialist side of a market system.”

Although Malaysia’s population is 70% Muslim and 30% non-Muslim, he said the value system of an Islamic economic model was universal.

He said non-Muslims too would not agree to Riba (interest) and that everyone was concerned about social welfare and protecting the environment.

“It’s not an antagonistic model but it requires acceptability by all,” he said, adding that it was geared towards a sharing economy which the Western world was also looking at.

“There is a counterpart to this, which is the social solidarity economic model based on the Norwegian social democratic system.”

In this system, he said, the government would play a strong role in the distribution of wealth but this involved high tax which Malaysians could not afford.

In the Islamic model, he said, the people could grow as much wealth as they wanted but they must also share with the less fortunate.

He said there were some practical issues he needed to study further, such as Shariah compliance, but overall the Islamic economic model was more holistic.

“The Islamic model is needs-based, not a Bumiputera policy but one based on Islam, and minorities are protected in Islam.

“My current thinking is to look at Turkey which is like Malaysia in the 1990s. (Turkish president) Recep Tayyip Erdogan has managed to bring up Turkey and there’s a lot of excitement in the country.”

On how matters like alcohol and gambling would fit into such a model, Kamal said the implementation of the model would have to be adjusted to suit realities as there was a non-Islamic economic sector.