Contemporary Islamic Finance: Innovations, Applications and Best Practices

CHAPTER 2

Contemporary Islamic Economic Thought

MOHAMMAD OMAR FAROOQ¹

Head of the Centre for Islamic Finance, Bahrain Institute of Banking and Finance

Economics as a specialized field of social science that systematically studies and explores the economic dimensions of life is a modern phenomenon. Thus, it can be safely argued that there was no Islamic economics until modern economics was developed.² Yet, Muslims had a vibrant and dynamic civilization, where the economic life did go on both at the individual and collective level. And, the Qur'an as the anchor of the Islamic way of life has some fundamental principles affecting the economic dimensions of life. Gradually the Muslim world faced decay and Western civilization emerged as dominant. In the civilizational encounter, the Muslim world, similar to many other parts of the world, became a victim of colonization and was dismembered and disfigured in many ways.

In the twentieth century the Muslim world experienced a new revivalism, which was also instrumental in challenging Western colonialism. This revivalism unfolded in both Islamic and nationalistic form. With few exceptions, Islamic revivalism was central to the aspiration for freedom and independence in the Muslim world. The pan-Islamic contributions of, among others, Jamal Al-din Afghani (d. 1897 AD), his disciple Muhammad Abduh (d. 1905) and Abduh's disciple Rashid Rida (d. 1935 AD) paved the way for Islamic movements, such as Jamaat-e-Islami in South Asia, Ikhwan al-Muslimoon ...