The Role And Development Of The Global Islamic Economy In Malaysia

The execution of Kingdom of Saudi Arabia and MENA's economies have surpassed world development. In the interim, Saudi's non-oil division has conveyed quickening development rates as the economy differentiates. Supported by hearty GDP development and macroeconomic security, shopper certainty is well over the provincial normal. Developing private credit and expanded open uses on framework and different activities give a wide premise to powerful open doors over the Middle East, however in Saudi Arabia these are interpreting into especially solid and maintained development in household request. KSA itself has never been more dedicated to supporting financial development. Powerful development in government incomes is supporting twofold digit increments in government consumptions on social, base, and other ventures. Maybe significantly more critical in the long haul, an undeniably deregulated and focused financial environment is supporting a blast of business arrangement as the private area plays an inexorably noticeable part in the economy (AT&T

For 140 years, foll0owers of Islam had created an empire that ruled the Middle East and stretched across North America into Europe. There’s many more interesting facts about Islam such as political orders, military conquest and how Islam spread so quickly.

As the Islamic religion rose, both the Persian, and Eastern Roman Empire began to collapse. In the seventh and eighth century, the rise of Islamic religion began to quickly move to rule the territories, taking over to create what is now a very important change in Islamic history. The rise of Islam began in the Arabian desert, showing great change for Islam as a religion, as well as the nature of the Islamic empire, but eventually this great rise began to collapse. The events that took place, is considered to be one of the quickest and affecting movements in history. As the movement took place, the Islam introduced a powerful political system, as well as the Islamic beliefs of faith. This was a genius and powerful take over that would rise for a while, until the rise eventually fell into the hands of the Mongols. The growth of the Islamic world changed history forever; one of the biggest steps that made Islam what it is today.

Becoming an expert in Islamic economics and finance field is one of my long-term goals in life. I started to organize and made a plan towards achieving that dream since senior high school. The concern towards Islamic economics and finance concept, and its application for society and the country began when I was reading a book entitled Islamic banking-theory and practice. After finishing reading the book, my interest in Islamic economic and finance topics rose and strengthen my own determination to become the expert of Islamic economics and finance. The main principle of Islamic economics and finance which offers the just and ethics in economic activity, poverty alleviation through income distribution mechanism, and prevention of economic and

This growing practice of Islamic banking will be discussed more fully in a later section as a modern application of usury prohibition.

llectual life is rich and vibrant, it is little known elsewhere, primarily because most Indonesian scholars write in the Indonesian language and not in English.

The financial sector in some Sub Saharan Africa countries has been growing rapidly in the past two decades. New products have been introduced and financial institutions are playing an tremendous role in financial intermediation, including cross-border financial flows. However, Islamic finance in Sub Saharan Africa remains small, although it has potential given the region’s demographic structure and potential for financial expanding. As of end-2012, about 38 Islamic finance institutions comprising commercial banks, investment banks, and takeful1 (insurance) operators were operating in Africa (Dow Jones, 2012). As estimates based on Bank scope and Zawya, April 18, 2012 out of

The adoption of Islamic business practices by organizations: Why, How and what are the performance outcomes

Musharakah, Mudarabah, Istisna’, Salam, Ijarah and murabahah is the main contract with their customers to use in providing facilities for Islamic banks. Possible classification , these contracts may be: Islamic pattern of non- debt financing (Musharakah and Mudarabah) and debt creation mode ( the Other ) . A third possible classification : Original Islamic mode of financing (Musharakah, Mudarabah, Istisna , Salam ) and financing of "reinventing " mode (Ijarah and murabahah).

Today, Islamic finance has shown impressive performance with the Islamic finance industry’s assets are estimated to have amounted to $1.8 trillion as at end-2013, recording an over 16% y-o-y growth according to KFH-Research. In a newly released report “Islamic Finance Outlook 2014” by Kuwait Finance House Research Limited (KFHR), the Islamic finance industry is forecasted to continue to chart tremendous double digit growth rates across all sectors, with total industry assets estimated to reach approximately $2.1 trillion as at end-2014.

It is undeniable fact that Islamic banking system has been flourishing for last few decades and now has become the focus of global market forces. Pioneers of Islamic banking proclaim that foundational principles of Islamic banking is allied with Shari’ah guidance and their accounting practices, policies and financial reporting mechanism is based on Sharai’ah values. Consequently, Islamic institutions have the responsibility to follow Islamic rulings in all their practices. The core purpose of this study is to confirm that either current practices are align with Islamic ethical values or just based on shari’ah terminologies. However, author find that current practice of Modarbah are not just contrary to its theoretical foundation of Islamic Banking but also to basic shari’ah guidance to some extent. It has been also identified that whenever an issue arises in Islamic banks they try to make it shari’ah compliant instead of resolving particular issue they are busy in just manipulating or islamizing conventional banking products by using Shari’ah terminologies to capture the attention of Muslims who are thirsty for transparent ideal Islamic system. This behavior of Islamic banks has made the practices of Islamic banks more controversial. Proper implication of current study can make great contribution in the literature of Islamic banking as it will help Islamic banks to review their practices in order to fulfill the basic ethical principles of Islam.

Similarly, Mobarek & Kalonov (2014) provided empirical evidence, using two frontier approaches, from many OIC countries to compare Islamic and conventional banking. They found that though conventional banks more efficient in their operations, Islamic banks had an upper hand when it came to financial stability. Their extensive study covered pre-crisis and crisis periods. The finding of Mobarek & Kalonov (2014) is validated by an earlier study conducted by Al-Hares, AbuGhazaleh, & El-Galfy (2013) in which they studied banks from 2003-2011. Al-Hares, AbuGhazaleh, & El-Galfy (2013) found that Islamic banks in Gulf Cooperation Council (GCC) were less efficient than

“Islamic finance is equity-based, asset-backed, ethical, sustainable, environmentally and socially responsible finance. It promotes risk sharing, connects the financial sector with the real economy, and emphasizes financial inclusion and social welfare”. (World Bank)

The Federation of Malaysia is made up of two main territories separated by the South China Sea in Southeast Asia. “East Malaysia is located on the northern quarter of the large Borneo Island and West Malaysia, where most of the population resides and forms the southern portion of the Malay Peninsula and south of Thailand.” (The Multiparty System: Country Studies – Malaysia) The western part known as “The Federation of Malaya, gained independence from the United Kingdom in 1957.” (The Multiparty System: Country Studies – Malaysia) Malaysia has a population of 31 million people with a mixed population of ethnic backgrounds. Malaysia’s present administration and previous ones were unable to make fundamental reforms in Malaysia. “Affirmative

Islamic finance refers to the provision of financial services in accordance with the Shari’ah Islamic law, principles and rules. The principles of which “emphasise moral and ethical values in all dealings have wide universal appeal” - (Institute Of Islamic Banking And Insurance - What Is Islamic Banking) Shari’ah does not permit the use of Riba (Interest), "gharar" (excessive uncertainty), "maysir" (gambling), short sales or financing activities that it considers harmful to society. The purposes and use of Islamic banks are similar to conventional banks, the only difference is that, Islamic banking is in accordance with the rules of Shari’ah which can also be known as ‘Fiqh al-Muamalat. Charging customers interest and fees for their services runs conventional banks. Islamic Banking is now well established, and heavily institutionalized in some 76 countries (Ariff and Iqbal). The existence of modern Islamic financial institutions was first recognized in 1960s and now has spread to a large number of Muslim countries including GGC (Gulf Cooperation Council), Arab, South and South East Asia, North Africa, and some of the west countries including UK, France, Denmark, etc. number