Taken from the literature of “Islamic global

organization”
Capitalism: An exploitative System

Let us observe some important stats of the beacon of

Capitalist State

The United States of America

In America:

In America:

37 million people live below the official poverty line—12.6 percent of the total
population

At least 2.3 million people experience homelessness at some point each year,
including nearly 1 million children

The richest among them has more wealth than the bottom 45 percent of the
households combined
Capitalist system:

Polarization of Wealth
is the Hallmark of Capitalist system
Net worth and financial wealth distribution in the U.S. in 2007
 Rich getting richer and poor getting poorer

 Microsoft CEO Bill Gates has more wealth than the bottom 45 percent of
American households combined.

 Business Week reports that in 1999 top executives earned 419 times the average
wage of a blue-collar worker, up from 326:1 in 1998. In 1980, the ratio was 42:1.
Concentration of Wealth in the West
Percentage of wealth held by the Top 10% of the adult population in
various Western countries

wealth owned
Country
by top 10%
Switzerland 71.3%
United States 69.8%
Denmark 65.0%
France 61.0%
Sweden 58.6%
UK 56.0%
Canada 53.0%
Norway 50.5%
Germany 44.4%
Finland 42.3%
 Where is the world headed!!!!!
An analysis of the trend of the widening gap between the rich
and the poor countries

Year Poor: Rich ratio

1820 3:1
1913 11:1
1950 35:1
1973 44:1
1992 72:1
 System not Resources

Pakistan's misery due to the rotten

Capitalist system not because of lack of
resources!
 Comparison

Islamic Economic System

vs
Capitalist System
 Economic Problem
Khilafah Democracy
Human needs are of two types Human needs are unlimited while
 Basic Needs (limited) there are limited resources to
 Luxurious Needs fulfil them
World resources are enough to fulfil
basic needs of all the people of world 1

Solution: Solution:
Distribution of wealth and resources to Needs of all the people won’t be
guarantee all basic needs to each fulfilled
individual Increase Production to fulfil
Create opportunities so that maximum needs of as many people as
number of people can work to fulfil there possible
luxurious needs

Rules related to collection of funds and its distribution constitute “Economic

System” and cannot be taken from other than Islam
Methods to increase production is “Economic Science” and can be taken from
other civilizations including the West
 Resources are limited- Non sense
 The United Nations Development Program (UNDP) reported in 1998 that the
world's 225 richest people now have a combined wealth of $1 trillion. That's
equal to the combined annual income of the world's 2.5 billion poorest people.

 As of 1995 (the latest figures available), Federal Reserve research found that the
wealth of the top one percent of Americans is greater than that of the bottom 95
percent

 According to the US Census Bureau, 35.9 million people live below the poverty
line in America including 12.9 million children. (http://www.census.gov)

 The wealth of the three most well-to-do individuals now exceeds the combined
GDP of the 48 least developed countries

 UNDP calculates that an annual 4 percent levy on the world's 225 most well-to-do
people (average 1998 wealth: $4.5 billion) would suffice to provide the following
essentials for all those in developing countries: adequate food, safe water and
sanitation, basic education, basic health care and reproductive health care.
Ownership
Economic System:

Ownership & Types of Properties

Khilafah
Three types of ownership
Individual
Public
State
Oil, Gas1, non-delectable minerals2 etc ‘free’
and anything on which society depends
and people will disperse in pursuit for it,
remains in public ownership
If these were owned individually this will
deny the public from benefiting from
these huge resources, creating misery
for the common man
Capitalism
Freedom of ownership
Individuals or companies
can own anything and
everything
Multinational companies are
to own public properties
such as oil, gas, parks etc
They are ‘free’ to spend or
hoard the wealth as they
please

 Huge resources for people’s welfare

 Cost of utilities much lower
 The foundation of economic colonisation
Economic System:

Pakistan’s Privatization Drive

Privatized
ABL, HBL, UBL, MCB
Bankers Equity Ltd
Hub Power Co, Kot Addu Power Co
PTCL (Ufone, Paknet, TIP, CTI)
Steel Mill (Decision Reversed)
Ghee Corporation of Pakistan
KESC
UCH Power Ltd, Saba Power Ltd
Dharki Power Ltd
Oil and Gas exploration Licenses are
innumerable
To Be privatized
OGDCL, PSO, PPL, SNGPL, SSGPL
NIT, ICP
Sindh Engineering, Bolan Textile
Lyallpur Chemical and Fertilizer Co.
Javedan Cement, Karachi Shipyard
Republic Motors, Lasbella Textiles
Heavy Mechanical Complex
HPFL (Hazara Phosphate Fertilizer
Limited)
Jamshoro Power Co, Pak Arab
Fertilizer, Mustahekam Cement

 In first ten month of 2004-2005 assets worth $3.6 billion has been sold:
Survey 2005:2006

 Current year privatization target is 75 billion rupees.

Taxation
 Taxation in a Capitalist System

 Tax the poor and average man

 Give tax-breaks to the

 Rich
 Multinational companies
 Landlords
 Taxes in America

Who Benefits from Bush's Tax Cuts?

 George Bush's 2001 $1.3 Trillion tax cut was the largest in US history

 The Top 1% supper-rich got 37 % of Bush's tax cut as saving ($481

billion)

 Whilst the bottom 80% of Americans only got 29 % of the total tax cut
($377 bn)

 The tax cut savings clearly shows that Bush works for the Super-Rich,
and that he is willing to promote their interests above those of all other
Americans
 Taxes in Pakistan
 Agriculture sector in Pakistan contributes 40% to the GDP whilst astonishingly its
contribution to the tax revenue is a meager 1%

 GST, which is an indirect tax extracted from common man, constitutes 37% of the
total tax-revenue of Pakistan

 No Zakat taken from the land mafia which owns billions of rupees of land for the
last decade or so. Islam requires a Muslim to give two and half percent of the
value of the tradable goods in alms as Zakat

 Currently No Ushr and Kharaj being levied on Agriculture produce

 No wonder in democracy the elite legislate laws to tax the poor and give tax
breaks to themselves
 Taxes Comparison

2009-10 2008-9
Evidences
Economic System:

Taxes
Khilafah Capitalism
No Taxes on common man1
 GST, Income Tax, Withholding tax, toll  63.93% (Rs 840 billion) of revenue of
taxes etc are all haram and will be Pakistan comes from taxes on the people
abolished as per the budget 2006-07 figures.

There will be following permanent  Out of these taxes 67.66% (Rs 569 billion)
are indirect taxation that are to be paid by
sources of revenues even a beggar, unemployed, handicapped,
 Al-Kharaj 2 widow, elderly people and children without
 Al-Jizya 3 any differentiation.
 Al-Ushr 4
 The fifth of Al-Rikaz 5 (hidden treasures
minerals)
 Import and export duty on foreign
traders 6
 Zakat on import and export of the
Muslim Trader 7
 Hima (Protecting from public properties)
Laws related to
Agricultural land
Economic System:

Agriculture and Land laws

Khilafah Capitalism
Lease of agricultural lands Leasing of agricultural lands is
(Muzariyat) is haram1 permitted
Agricultural land if not used for 3 No such restriction applies to an
years will be confiscated2 and owner. He is “free” to do whatever
allotted to someone who would he pleases
cultivate it
Anybody who occupies a dead No such incentive in the current
land (outside the planned city area) Pakistani system
and revives it by building a house
or a factory etc becomes the owner
of the land as well
Prohibition of Muzarat coupled with obligation to cultivate land will give
rise to land distribution of optimum productivity
Eradicates injustice to Muzarays. Delivers a fatal blow to the colonialist
Feudal system (“jageer darana nizam”)
 Evidences
1. It was narrated by al-Bukhari that the Messenger of Allah said: “Whoever has land let him plant upon it or grant it to his
brother. If he declined let him hold his land.”
2. Muslim also narrated, “The Messenger of Allah forbade a rent or a share be taken for the land.”
3. The Sunan of An-Nisai states: “The Messenger of Allah forbade leasing the land.We said, ‘O Prophet of Allah, can we
then lease it for some of the grain.” He said, ‘No.’ We said, ‘We used to lease it for the straw.’ He said, ‘No.’We
said, ‘We used to lease it in return of that on the irrigating Rabee’a.’ He said, ‘No, plant it or grant it to your
brother.’”
4. Abu Dawud has narrated from Rafi’a ibn Khadeej that the Prophet also said, “Whoever has land, he has to plant upon it
or let his brother plant upon it, and he cannot lease it for its third or fourth or a specified food.”
 Evidences
1. Bukhari related from ‘Aisha (ra) that the Messenger of Allah said: “Whosoever cultivated a land that is not owned by
anybody, then he deserved it more.”
2. Abu Dawud narrated that the Messenger of Allah said: “Whosoever fenced a (dead) land it becomes his”
3. Bukhari narrated from Umar (ra) that he said: “Anyone who cultivated a dead land it becomes his.” Muslims and the
Dhimmi are equal in this matter, because the Hadith is general in its words.
 Evidences
1. By completing the revival, ownership is completed and the land is officially transferred to the peasant. All this must happen
before the end of three years after the allocation. This came in the narration narrated by Tawus from ‘Umar ibn Al-Khattab
who said: “The muhtajir (who shield a land) has no right after three.” ‘Umar implemented this ruling while Sahabah were
present and they all approved of this. Hence it becomes Ijma as-Sahabah for us and a Shari daleel.
 Residential Land
Khilafah Capitalism
The State guarantees housing for The system doesn’t allow the
the one who is in capable to build a people to use the resources which
house for himself and his relatives Allah has bestowed to man
are also poor cannot support him
The Prophet (SAW) said: “The Son
of Adam has rights to food, clothing
and shelter.”

Common man’s biggest problem in building a house is the inflated prices

of residential land that can easily be solved through the Khilafah state.
Currency
 Currency
Khilafah Capitalism
Metallic Currency Fiat currency backed by confidence
 Gold Dollar
 Silver Euro
 Any other precious metal
 Currency notes can be used in lieu
of gold and silver
Protects the currency from foreign control
Puts a check on devaluation and fake inflation
Return of the Gold standard will strike a fatal blow to the colonialist
economy
Riba
 Riba
Khilafah Capitalism
Interest transactions not allowed1 Freedom of ownership allows people
 No interest based debt servicing to hoard money
Encourages the wealthy to under Riba is the bate for the people to
take local investment rather than take money out of circulation/
depositing their money in high investment and to put into deposit
interest deposit accounts account
In 2006:07 Pakistan will pay 295
billion rupees in interest payment.
This is 55 billion more than all foreign
loan and grants for the year.

Relief to common man/investor

No interest servicing to IMF and WB.
 Evidences
1. “That is because they say: Selling is just like usury. Whereas Allah permitted selling and prohibited usury.” [Al-
Baqarah: 275]
 Investment before the advent of
Banks
In a society devoid of Banks Investor Skilled labour
investors are in need of
entrepreneurs and businessmen Investor
to help increase their wealth Entrepreneur
On the other hand the skilled
Investor
labour, inventors and
businessmen are in need of Trader
investment in order to generate Investor
more wealth
Hence it is a marriage of Businessman
Investor
convenience for both parties
They join together in a
Investor Inventor
partnership to benefit from
each other such that the
investor bears the risk and the
other partner does the work
 Bank monopolizes the wealth of the society

The Bank drains the society off of Investor Skilled labour

its wealth by guarantying the
investor of sure profit (interest) Investor
As a result an entrepreneur and Entrepreneur
skilled labourer is forced to
Investor
borrow money from the bank on 20%
exploitative terms. Trader
12% Interest
According to the contract not only Investor Bank
Profit
the borrower has to pay hefty
interest but he also has to return Businessman
Investor Bank’s Profit = (20-12)%
the principle amount in full even
though if his business was in loss.
Investor Inventor
This produces a win-win situation
for the investor and the bank.
Hence the rich becomes richer
and the poor poorer
 In Muslim societies Banks were not very
successful

In Muslim societies since Investor Skilled labour

people considered Interest as
haram therefore Banks was Investor
not in total control of the Entrepreneur
money flow in the society.
Billions of dollars of money Investor
remained outside Banks Trader
control. And skilled labour Investor
didn’t need to go to the bank
to borrow money as investors 12% 20% Businessman
Investor Profit Bank
were there to help them.
Interest
As a result banks who thrive
Bank’s Profit = (20-12)%
on monopolising the money Investor Inventor
and then forcing people into
exploitative contracts
couldn’t function properly.
 Islamic Banking is helping Capitalist Banks

The Banks opened up a Window Investor Skilled labour

for Islamic Banking through Islamic
which Muslims were encouraged Investor Banking
to give their money to the banks $ Entrepreneur
$
instead of investing it themselves $
following Islamic laws Investor
This achieved the objective of Trader
draining the society off of wealth Investor
and hence the skilled labour has
12% 20% Businessman
become more dependent on the
Investor Profit Bank
Banks Interest
Hence Islamic Banking has Bank’s Profit = (20-12)%
actually helped Capitalist system Investor Inventor
by having stronger grip on the
money flow and hence exploit
the masses
 Islamic Banking in the Capitalist system
Islamic banking is also tool via which the Imperialist forces engage
sincere Muslim in the current Kufr system and deceive them in believing
that they can have an Islamic system within the frame work of the existing
Kufr Capitalist system. As a result enormous time and effort is wasted in
trying to “reform” this kufr system instead of uprooting it and
implementing Islamic system in a comprehensive and radical manner
 Banking System
Khilafah Capitalism
Bank do not serve as financial Banks acts as financial intermediaries
intermediaries. Hence in capitalist
sense there are no banks.
They provide services like debit card,
They will provide services of the LC for import export, Online fund
like debit card, LC for import transfer, internet payments, credit
export, Online fund transfer, cards. Financing for various heads on
internet payments, etc. interest etc
They will facilitate/establish
communication between the A source of hoarding of wealth
investor (Muwakkil) and worker
(Mudharib)

Khilafah takes advantage of financial institutions providing financial

services and networking whilst protecting the masses from the current
banks system which spread their evil through hoarding of wealth, marginal
reserve system and interest etc.
 Banks in the Khilafah
The banks can continue to
undertake all non-interests based Investor
services and take service charges Trader
on them such as: Investor
 Current accounts for its
customers Businessman
 Money Transfer Investor
 Cash Station Cards
 Lockers for valuable items Investor Inventor
 LC (Bank as a Guarantor)
The banks can also act as
financial advisors and facilitate
the marriage of investors and • Only introduces the two • Bank is not a part of the
parties and takes financial contract
entrepreneurs /businessmen etc. service charges for its Bank • Bank is only a financial
Government bank will also effort adviser and facilitator similar
to that of a property dealer
provide grants and interest free
loans to its citizens to enhance
economic activity
Company
Structure
 Company Structure
Khilafah Capitalism
All contracts should conform to Man made laws aimed at benefiting
contracts laid down by shari’ah. corporates are to be complied.
Hence exploitation of the needy is Rules have been written to benefit
not possible those who wrote them. Golden rule!
“he who has the gold rules”
Public limited companies Illegal. Stock-exchange an integral part of
i.e. no stock exchanges, futures western corporate business.
trading etc. in Khilafah

Speculative contracts lead to fiat (Alternative) economy and indexes

which is used by the corporations to loot common man’s money while
keeping them in dark as happened in the latest saga of energy giant Enron
and second largest telecom company WorldCom.
Khilafah’s economy will be protected from economic crisis as were
witnessed in South East Asia during the late ’90s when “Asian Tigers”
were wiped by the powerful foreign investors
 Stock exchanges
Khilafah Capitalism
No stock exchanges are there in A major portion of investment is done
Khilafah. in stocks whose more than 90 %
portion has nothing to do with real
trade.
No speculative transactions are
allowed as per Islam. Investment
is done only in real trade Real trade has gradually been
strengthening economy. reduced to less than 10 % of
international trade and 90% is only
financial transaction.
No chance of drowning of money
in stocks as recently happen
when 4 billion dollars of small Last year stock market crashed
investors were lost in a matter of several times drowning trillions of
a week when KSE index dropped rupees of investors.
from 10,000 to 7000 points.

Stock exchanges are a source of diversion of investment from real trade to

speculative business.
If all the money that is invested in stocks is directed to real trade it will give
rise to a robust economy
 Valid Companies in Islam

Khilafah Capitalism
The Company of Equal (Al-’Inan) Public Limited Company
The Company of Bodies (Al-Abdan)
The Company of Body and Capital Private Limited Companies
(Mudharaba)
The Company of Reputation Faces Guarantee Limited
(Wujooh)
Company of Negotiation (Mufawadha) Unlimited Company

A Man is not separate from his The Company and the owner
company are two separate distinct bodies
He is responsible for the debt of the Owner is not responsible for the
company. He the stake holder money debt of company beyond his
is safeguarded investment
A man can not hide behind the Owners always hide behind the
corporate rules at the time of corporate rules at the time of
bankruptcy bankruptcy.
Zakat
 Zakat

Zakat is only taken from Muslim citizen after the passage of one year if his
wealth exeeds Nisab which is different for different catagories
 Liquid Currency
 Stocks (Raw material or Finish Goods)
 Receivable – Debts
 Live Stock
 Land (Ushr)
 Any tradable commodity including property

Hence as a whole more than 2.5% of the total wealth of the economy is
collected from the society and injected back into the poorest echelons
of the society.
This is a tremendous mechanism of producing a balance in the
distribution of wealth within the economy apart from other Ahkam of
Islam which allow the down trodden people to improve their economic
situation
Foreign Loans
 Foreign Loans- no way
Khilafah Capitalism
Taking Foreign loans would not be Foreign loans are the integral part
allowed 1 of Pakistan’s capitalist economy
This year 239 billion rupees will be
Membership in colonial received as different type of foreign
organisation is also not allowed like loans.
Paris club, ADP, Islamic In 1980 Nigeria took a loan of $3.5
Development Bank, World bank billion from the Paris club. By 1985
and of course IMF. this debt had risen $5.8 billion. By
1998 it had risen to 20.9 billion, and
is today estimated at 27 billion.
Sovereignty of Pakistan was mainly eroded due to foreign loans
IMF and WB dictate all our internal policies under the guise of ‘reforms’
and ‘good governance’
Khilafah would liberate us from IMF & WB Structural Adjustment
programmes (SAP’s), Poverty reduction strategy Papers (PRSP)
conditionalities and improve our economy
Evidence
Economic System:

Foreign Traders − not MNC’s

Khilafah
Foreign trade is assessed on the basis of the citizenship of the
trader and not the origin of the goods except goods from countries
we are in actual war with like Israel.

Merchants from countries that have treaties with the State are
treated according to the terms of the treaties

Merchants from countries in a state of war with the State are

prevented from trading in the State, unless given a special
permission

Any country with whom we have actual war with, its citizens (such
as Israel) is excluded from these rules. The rules applicable to the
actual land of war (Dar al-Harb Fa’lan) apply to such country in all
the relations
Trade
Economic System:

Local Traders
Khilafah Capitalism
Merchants who are subjects of No such provision, hence Pakistan is
the State are prevented from helping India fulfil her energy needs
exporting any goods that the by building two gas pipelines. Which
enemies could benefit of would further strengthen Indian
militarily, industrially or industry and Military to be used
economically against Muslims of Pakistan
 This Trade Policy protects the state from potential enemies in the future

They are not prevented from The government hurts the local trader
importing any property they own under the pretext of “Smuggling” while
under the pretext of protecting reduces import duty to give monitory
the local industry benefit to the foreign trader under the
guise of “foreign investment”
There is nothing known as “Smuggling” in Islam as long as the citizen of the
state imports Halal items
 Import export duties
Khilafah Capitalism
A Muslim trader only has to pay Zakat Import and export duties
(2.5%) of the property during import and may be as high as 15 to
export once a year 1
20%.
No import or export duty other than zakat Import duties on luxury cars
reduced to suit the rich

A Zimmi (non-Muslim citizen) will pay No such distinction

according to the contract he had with state
at the time of conquest 1
A Harbi (foreigner non-Muslim) will pay the No such distinction
same percentage of duty as his country
applies on the traders of the Khilafah 2
Low import and export duties will enhance trade and improve not only the
conditions of the trader rather it will also help our exports
In a Capitalist state people in the legislative assemblies reduce and
increase duties to suit their interests and make money.
Miscellaneous
Ahkam
 Evidences
1. The hoarding of gold and silver was prohibited explicitly in the Qur’an. Allah (SWT) says: “And let those who hoard
gold and silver and do not spend them in the way of Allah know that a severe and painful punishment is awaiting
them.” [At-Tauba: 34] This warning of severe punishment for those who hoard gold and silver serves as a clear
evidence that the Law Giver has decisively ordered us to refrain from doing so; it is therefore forbidden to hoard gold and
silver.

2. Islam prohibited pricing absolutely, due to what Imam Ahmad narrated from Anas who said: “Prices increased at the
time of the Messenger of Allah , so they said, O Messenger of Allah, we wish would you price (fix the prices). He
said: “Indeed Allah is the Creator, the holder (Qabidh), the Open-handed (Basit), the Provider (Raziq), the Pricer
(who fixes prices); and I wish I will meet Allah and nobody demands (complains) of me for unjust act I did
against him, neither in blood or property.” Also Abu Dawud narrated from Abu Huraira, he said, “A man came and
said, O Messenger of Allah, fix prices. He said: “Rather Allah reduces and increases.”

3. S’aid ibn Al-Musayyab narrated from Mu’ammar ibn Abdullah Al-‘Adawi in Bukhari that the Prophet (saw) said: “No one
monopolises except the wrongdoer.” Al-Athram narrated from Abu Umamah, he said: “The Messenger of Allah
(saw) forbade that a foodstuff be monopolised”. And Muslim narrated through his chain of narrators from S’aid ibn Al-
Musayyab that Mu’ammar said: “The Messenger of Allah (saw) said: “Whoever monopolised is a wrongdoer.”’
Monopoly is prohibited (Haram) in all things without a difference between the human foodstuff or animals foodstuff, a
foodstuff or not, and of the people’s necessities or luxuries. This is because the linguistic meaning of the word
monopolised (Ihtakara) is to compile a thing in its absolute sense (without specification). The word monopolised did not
come in the meaning of compiling the foodstuff or the people’s necessities, rather compiling the thing, so it should not be
confined to other than its linguistic meaning.
Evidences
 Economic System:

Hoarding of Wealth & Price Fixing

Khilafah Capitalism
Hoarding of wealth (money) is People are “free” to hoard wealth for no
haram and state will take practical reason
steps to prevent it 1

 Islamic system ensures circulation of wealth

 In Capitalist system banks offer “interest” to encourage people to inject
money into economy

 Islam prohibits price fixing 2

 Capitalist are still in dilemma as to how
 Islam prohibits monopoly 3 to get rid of monopolies; e.g. Microsoft
break up litigation
 Evidences
1. The Islamic economic system came to secure basic needs, irrespective of market conditions for such products.
Muhammad (SAW) said, “The son of Adam has no better right than that he would have a house wherein he may
live and a piece of cloth whereby he may cover his nakedness and a piece of bread and some water.” According
to this principle the Islamic State must ensure for all its citizens (Muslims or Non-Muslim) of the Islamic State a security
which western people will never achieve in the heartless obduracy of the application of its free market.
Economic System:

Basic needs of the masses

Khilafah Capitalism
Basic needs of all citizens are In the purest form of capitalism
guaranteed such as food, clothing, there is no concept of public
shelter, education, health etc. welfare.
The land laws discussed earlier
allow people to attain self-sufficient
in food and housing as explained
above

Khilafah alleviates the suffering of the masses

Decreases crime and insecurity in the society
Produces a secure economic atmosphere which increases economic
activity and investment as the investor doesn’t run the risk of being
homeless and struck by hunger in case of a loss
Economic System:

State Revenues
Khilafah Capitalism
Sources of Bait -ul-Mal Predominant source
 The booties and the spoil of war1, Al-Fai2 and the fifth3 of income is Taxes
 Al-Kharaj from the common
 Al-Jizya people. People in the
 Protecting some Public property (Hima) 4 west are taxed upto
 State property of land, building utilities and their 35% of their income
revenues)
 Al-Ushur
 Money attained illegally by the rulers, the employees of
the State, illicit money and money from penalties
 The fifth of Al-Rikaz (hidden treasures) minerals 5
 The inheritance property of the one who has no
inheritors 6
 The property of apostates 7
 Charity Funds – Zakat
 Taxes (only from the rich Muslims and in specific situations)
 State Expenditure Priorities
Khilafah
The expenditures of the State are based around seven areas:
The Zakat funds – on fix 8 categories mentioned in the Qur’an.
Spending money on the destitute and the poor to ensure their basic needs is a must
on the State.
Spending on defence, heavy industry and security of the State as well as carrying the
Islamic Message to other lands.
Allowances of State employees such as salaries of soldiers, civil servants, judges,
teachers and the like.
Provide utilities to the people such as roads, water services, power services,
mosques, schools and hospitals and any other utility considered as necessity for the
people.
Emergency expenditures such as during famine, flood, earthquake or attack by
enemy.
Spending on development projects – Only if funds available
 Implementation of Economic
System
Khilafah

oTo implement Islam’s economic system we require its corresponding ruling system
i.e. the Khilafah. In the Khilafah no one has the authority to change Allah’s laws or
abrogated them

oDictatorship and Democracy cannot implement Islam’s economic system as man is

the legislator in both these systems and the powerful can easily change the just laws
of Islam in their personal interests to subjugate the rights of the weak and the poor
 Decision making in Autocracy
(dictatorship of an individual)

Decision making

Legislative Mubah Mubah

(General issues) (needing expertise)

The ruler The ruler

The ruler

Education Foreign
Economic Ruling Social Judicial
Policy Policy
 Decision making in Democracy
(dictatorship of an elite group)

Decision making

Legislative Mubah Mubah

(General issues) (needing expertise)

Elite Group
Elite Group

Elite Group

Education Foreign
Economic Ruling Social Judicial
Policy Policy
 Decision making in Khilafah

Decision making

Legislative Mubah Mubah

(General issues) (needing expertise)
Allah’s Ahkam Khaleefah
Are implemented is final
derived from the authority
sources, Qur’an, after
Sunnah, Ijma us discussing
Sahaba with
Qiyas experts
People
Through their
representatives
decide based on
Majority (if
Education Foreign Khaleefah asks
Economic Ruling Social Judicial them)
Policy Policy