Search results

This study aims to examine the issues and challenges in contemporary affordable public housing schemes and proposes an alternative affordable public housing model for low- and middle-income households in Malaysia.

The paper applied qualitative research method. Semi-structured in-depth interviews with four government officials were conducted to understand the provision, framework and working mechanism of selected affordable public housing schemes. A focus group with nine participants was conducted with low- and middle-income households to validate pertaining residential issues and problems in affordable public housing schemes.

The overall findings reveal that the growing plights of unaffordability, poor maintenance and mismanagement have undermined the performance of affordable public housing schemes in Malaysia. The paper indicates that Islamic Public–Private Housing Co-operative Model (IPHCM) possibly has a comparative advantage in its design and operation and therefore can be implemented as an alternative model to address these issues in contemporary affordable public housing schemes in Malaysia. The findings also offer guidelines to government officials and managers of public housing schemes to implement the IPHCM model that can help in reducing the financial burden on low- and middle-income households, improving maintenance work and enforcing effective management practices with residents’ participation.

The paper is limited to develop a new Shariah-compliant affordable public housing model. The paper presents a design and defines the underlying Shariah concept and contracts and their working mechanisms in the proposed model. The paper has not considered other related areas in the development of IPHCM model including Shariah and subject matter expert’s perspective, consumer behavioural intention, legal and regulatory requirements.

The paper has relevance for policymakers and government institutions offering affordable public housing schemes to ensure successful deliverability of sustainable and affordable public housing for low- and middle-income households in Malaysia.

This paper aims to apply the doctrine of siyasah shariyyah to a policy proposal in the area of monetary economics, namely, the Grondona system of conditional currency convertibility, which has been proposed as a practical means of resisting the economic instability caused by the present-day fiat money system.

The paper uses library research to review the literature relevant to the Grondona system, and examines the extent to which its operations conform to the principle of siyasah shariyyah, thereby encouraging Maslahah, i.e. the public interest.

It has been found that the Grondona system conforms to the philosophy of siyasah shariyyah because it promotes public welfare in a number of ways. First, it is based on the fundamental principle of Prophet Yusuf’s/Joseph (peace be upon him) economic planning, which is accumulating reserves of primary commodities during times of plenty and releasing those reserves of commodities during periods of scarcity. Second, it provides the necessary linkage between the monetary world and the real economy. Third, it could be implemented in parallel with the existing monetary system by using the national currency. Fourth, it would help the least developed countries of the world, which mainly depend on exports of primary commodities (mostly agricultural).

Because of the chosen research approach, this research study is theoretical in nature. Therefore, researchers are encouraged to evaluate the system from economic perspective based on simulation for the purpose of possible implementation.

The paper includes important implications for the policymakers in the Organization of Islamic Cooperation countries for the possible implementation of Grondona system.

This paper fulfils an identified need to apply the philosophy of siyasah shariyyah to the area of monetary economics.

In line with the IFSB and BCBS methodology, the purpose of this study is to undertake a comparative analysis of dual banking systems for asset-liability management (ALM) practices with the duration gap, in Islamic Commercial Banks (ICBs) and Conventional Commercial Banks (CCBs). Based on the research objective, two research questions are developed: How do the duration gaps of ICBs compare with those of similar sized CCBs? Are there any country-specific and regional differences among ICBs in terms of managing their duration gaps?

The research methodology comprises two-stages: stage one uses a duration gap model to calculate the duration gaps of ICBs and CCBs; stage two applies parametric tests. In terms of the duration gap model, the study determines the duration gap with a four-step process. The study selected a sample of 100 banks (50 ICBs and 50 CCBs) from 13 countries for the period 2009-2015.

The paper provides empirical insights into the duration gap and ALM of ICBs and CCBs. The ICBs have more variations in their mean duration gap compared to the CCBs, and they have a tendency for a higher (more) mean duration gap (28.37 years) in comparison to the CCBs (11.79 years). The study found ICBs as having 2.41 times more duration gap compared to the CCBs, and they are exposed to increasing rate of return (ROR) risk due to their larger duration gaps and severe liquidity mismatches. There are significant regional differences in terms of the duration gap and asset-liability management.

Future studies also consider “Off-Balance Sheet” activities of the ICBs, with multi-term duration measures. A larger sample size of 100 ICBs with 10 years’ data after the GFC would be more beneficial to the industry. In addition, the impact of an increasing benchmark rate (e.g. 100, 200 and 300 bps) on the ICBs as per the IFSB 20 per cent threshold can also be established with the duration gap approach to identify the vulnerabilities of the ICBs.

The study makes profound contributions to the literature and suggests various policy recommendations for Islamic banks, regulators, and standard setters of the ICBs, for identifying and measuring the significance of the duration gaps; and management of the ROR risk under Pillar 2 of the BCBS and IFSB, for financial soundness and stability purposes.

To the best of the authors’ knowledge, this is a pioneer study in Islamic banking involving a sample of 100 banks (50 ICBs and 50 CCBs) from 13 countries. The results of the study provide original empirical evidence regarding the estimation of duration gap, and variations across jurisdictions in terms of vulnerability of ICBs and CCBs in dual banking systems.

This paper aims to discuss the opinions of current Shariah scholars on the concept of debt money in the present-day fiat money system.

Research design of this paper is a quantitative investigation of Shariah experts by distributing a questionnaire to them. As majority of Shariah scholars are also Shariah advisory of the current banking system, it is important to find out their level of knowledge on the issue of debt money created by the commercial banking system through the fractional-reserve banking (FRB) system.

Based on this investigation, most Shariah scholars are unaware of and confused about the mechanics underpinning the creation of money, especially with respect to FRB as it is practiced by the conventional and Islamic banking systems.

Based on this research, it is recommended that these scholars should improve their understanding of the operation of the fiat money system and its consequences. It is recommended that, in future, Shariah scholars should think “outside of the box” by creating Islamic financial instruments that do not resemble those of the conventional system.

To reason whether the interest‐based fiat monetary system is compatible with the objectives of the Islamic law or the Shariah.

This is a theoretical paper that uses the quantity theory of money and the objectives or maqasid al‐Shariah as expounded by scholars as basis for logical deductions therefrom.

The socio‐economic implications of fiat monetary system imply that the maqasid al‐Shariah cannot be attained. Indeed, the system is likely to cause a move away from the maqasid.

The paper is based primarily on theoretical deductions. Further empirical investigation would shed further light.

Practical implications are numerous. The definition of what is money is then crucial to address the socio‐economic implications caused by the fiat monetary system. For Islamic economics, this would imply that the process of Islamization of knowledge/disciplines is futile without addressing this issue first. Accordingly, the establishment of Islamic economics, banking and finance warrants a serious look into the current definition of money and monetary systems.

It calls for a definition of Shariah‐compatible money. This is beneficial to the researchers, proponents and practitioners of Islamic economics, banking and finance.

Having argued in the part I paper that the interest‐based fiat monetary system is not compatible with the objectives of the Islamic law or the Shariah, this paper seeks to argue why commodity moneys, like the gold dinar and silver dirham, are compatible with the maqasid.

This is a theoretical paper that integrates information from the Qur’an, the traditions of the Prophet, the writings of early Islamic scholars and historical observations vis‐à‐vis the objectives or the maqasid al‐Shariah and makes logical deductions therefrom.

The theoretical conclusion is that while fiat money is counterproductive to the maqasid al‐Shariah, commodity moneys like the gold dinar and silver dirham, are indeed compatible with the maqasid. The Islamic economic system is, therefore, fundamentally a “barter” system, i.e. an exchange economy where goods and services are exchanged value for value, but avoids the problems associated with barter by taking some of the commodities exchanged in the economy, that have the characteristics of money, as money. Gold is argued to be the best Shari’ah money.

Empirical investigations may shed further light.

If the theoretical deductions and contentions of the paper are correct, then their practical implications cannot simply be understated. For the Islamic economic system to emerge in reality, or for that matter any process of Islamization of knowledge/disciplines to succeed, it is foremost crucial that commodity moneys gradually replace fiat money.

The paper establishes that commodity moneys like gold and silver are Shariah‐compatible moneys, whereas the current fiat money is not.

The purpose of this paper is to show that fractional reserve banking (FRB) has implications for the ownership structure of assets in the economy that violates the Islamic principles of ownership.

This is a theoretical paper that looks into the works of Islamic scholars on the issue of ownership that are based on Qur'an principles and the traditions of the Prophet, and evaluates the FRB from that perspective.

The conclusion of the paper is that money creation through FRB is creation of purchasing power out of nothing which brings about unjust ownership transfers of assets, from the economy to the bank effectively paid for by the whole economy through inflation. This transfer of ownership is not based on human effort by taking on legitimate risks and neither with the knowledge nor the consent of the initial owners. This violates the ownership principles in Islam and is tantamount to theft. It also has the elements of riba. Islamic governments should therefore not create fiat money since this is equivalent to taking assets of the people, rich and poor alike, forcefully without compensation.

Empirical investigations into how bank loans along the years have changed the asset ownership structure in economies may shed further light.

It is, therefore, important that Shariah scholars render a fatwa on both the fiat money and the FRB system. Such a fatwa is urgent and pertinent before Islamic banking and finance, that operate under these systems, takes a course that may prove difficult to reverse later. The Islamic economics and finance cannot be founded upon a money system that is fundamentally equivalent to theft and riba.

The paper shows how the operations of Islamic banking and finance within the fiat money, FRB system are invalid from the Islamic perspective.

The purpose of this paper is to develop a new Islamic credit card model that is in line with Shariah principles and can be adopted as an alternative to contemporary Islamic credit card models by Islamic financial institutions in Malaysia.

This paper is theoretical in nature and mainly based on descriptive research method approach.

The overall findings indicate that the contemporary practice of Islamic credit card in Malaysia is still controversial in its design and operation. Moreover, the adoption and practice of Shariah contracts in bay’ al-inah, tawarruq and ujrah models are not in line with fundamental doctrines of Shariah and are imbued with the practice of hilah (legal trick), which allows them to circumvent the prohibition of riba. The paper indicates that Al-Muqassah model possibly has a comparative advantage in design and operation when compared with the bay’ al-inah, tawarruq or ujrah models.

The paper is limited to develop a new Shariah-compliant Islamic credit card model. The paper presents a design and defines the underlying Islamic financial contracts and their working mechanisms in the proposed model. However, it will not address other related areas like consumer perception, legal and regulatory requirements.

The paper will have direct implications on contemporary practice of Islamic credit card in Malaysia and elsewhere. The practice of Al-Muqassah model can also possibly have effects on common well-being and economic development.

The paper has relevance for Islamic financial institutions offering Islamic credit cards. The proposed model is fully in line with fundamental doctrines of Shariah and performs the key functions of an Islamic credit card.

The purpose of this paper is to empirically explore market integration among five selected Association of Southeast Asian Nations (ASEAN) emerging markets (Malaysia, Thailand, Indonesia, the Philippines and Singapore) during the pre‐ and post‐1997 financial crisis periods.

Employs two‐step estimation, cointegration and generalized method of moments (GMM).

The study finds that the stock markets in the ASEAN region are cointegrated both during the pre‐ and post‐1997 financial crisis. However, the markets are moving towards a greater integration, particularly during the post‐1997 financial crisis. Finally, as measured by the error correction terms, except the emerging market of Indonesia, all other ASEAN markets appear to be the important bearers of short‐run adjustment to a shock in the long‐run equilibrium relationships in the region both during the pre‐ and post‐crisis periods.

The study only focuses on stock markets of the five founding members of ASEAN, i.e. Malaysia, Indonesia, Thailand, Singapore and the Philippines.

The paper reveals that unlike during the pre‐crisis period, the long‐run diversification benefits that can be earned by investors across the ASEAN markets in the post‐crisis period tend to diminish.

The study is among the first to use two‐step estimation, cointegration and GMM to re‐examine market integration either in the emerging or developed markets.

The aim of this paper is to reconcile the diverging opinions among Islamic economists toward the concept of scarcity and to present a holistic model of scarcity and abundance from a Qur’anic perspective.

Analyses of both interviews and texts were performed. The method in studying scarcity from Islamic perspective consisted of semi-structured interview with five experts in the field of Islamic economics and development.

One major implication of this study is that the concept of scarcity as it is postulated by mainstream economics tends to clash with the Islamic worldview, as it does not have any reference in Islam. Scarcity can act as a phenomenon in economic activities but not as the defining concept in Islamic economics.

Practically, this paper will contribute to the making of the first lecture of the course of Islamic economics.

Socially, this paper will contribute to the process of transforming the science of economics and Islamic economics for a sustainable tomorrow.

This paper is a fundamental paper that addresses some aspects from critical realism and transcendental idealism into the making of Islamic economics. Not only that the discussion on the concept of scarcity in Islamic economics is limited and seems to be lacking; in addition, this paper offers a critical discussion on the validity of the concept of scarcity in economics from a critical perspective.