K Rahman Khan said Islamic economics could be an alternative system to achieve a just and stable economic order amid the ongoing global financial crisis.
Deputy chairman of Rajya Sabha K Rahman Khan on Saturday, said Islamic economics could be an alternative system to achieve a just and stable economic order amid the ongoing global financial crisis.
"We cannot just say Islamic economics is best in the world. It is one of the alternative systems which can be evolved to achieve a just and stable economic order," Khan said while addressing a seminar on the global economic crisis and relevance of Islamic economics.
"Islamic Economics prescribes various sets of rules which is based on the principles of justice and morality," said M Nejatullah Siddiqui, Islamic economist and former research professor at Islamic Centre in King Abdul Aziz University, Jeddah.
"Islamic Economics stands for abolition of riba (bank interest) and maysir (gambling-like speculation) in financial dealings as well as a regard for the interest of others in one's pursuit of material gain," he added.
Siddiqui argued that debt-finance coupled with speculative products whose intricacies defy understanding provide ample opportunities to greedy profit-maximising agents to exploit the aspirations of ordinary investors and for goading home owners and consumers into living beyond their means and chasing untenable dreams.
A world of banking and finance without riba and maysir will be the best alternative to the current scenario, he said.
"In this new environment risk sharing will replace risk shifting and morality will serve as the corrective to self-destructive outgrowths of current financial capitalism," he said.
The current crisis that emanated from US markets and spread to other developed and fast developing countries started as a credit crunch due to highly over-stretched leverage, Siddiqui said.
"The situation was aggravated by the complexity of the products and reached its zenith due to moral failure generating conflicts of interest and mismatch between incentives of the various groups and individuals involved," he added.
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