The gap between the rich and the poor is ever increasing – the rich are getting richer, because the poor are getting poorer. Due to the modern day problems we are facing which cannot be solved by mainstream economic doctrines, the field of Islamic economics is on the rise by the mercy of Allah. Many scholars are writing on the topic and university programs are becoming available to study it in depth. Here are a few solutions which Islamic economics gives for the overwhelming problem of poverty, from the book An Introduction to Islamic Economics by Muhammad Akram Khan.
- Shifting the focus on material things towards focusing on human beings – finding ways to develop their productivity, their capacities and skills by education and training, and then providing them with economic resources of the community to go out and use their talents. We often view overpopulation as a curse. But in fact it is a blessing. Every human being is an asset to the community. It only takes nurturing and utilizing that asset to prosper.
- Making people in charge of their own affairs locally, encouraging them to take part in solving their own local problems. Also, zakah should be collected locally and utilized to solve local problems and help the people in that community. This will prevent influx of resources from one locality to another.
- Limited liability, in which a person can enjoy the profits of his investments, but washes his hands off the losses, need to be abolished.
- There should be a shift in focus from the value of GNP, to the value of human beings. Human needs are to be taken into account, such as health care, education, cleanliness of the environment, telecommunication, transport systems etc. these need to be developed in order to increase the productivity of the ordinary people.
- Interest based loans, both local and international, need to be totally abolished. This will halt the influx of wealth and resources from the poor to the rich, from poorer communities and nations to the richer ones.
- Urbanization is seen as a problem. Due to focus on developing the cities, and ignoring the rural areas, majority of the areas are in poor conditions of health care, water supply and other basic needs, thus forcing people to go to the cities and create slums. There needs to be a balance between development in urban and rural areas.
- Tech institutes need to plan their launching of new technologies in such a way that those who are going to lose their jobs because of it can be retrained and rehabilitated in the community.
- Deficit financing needs to be abandoned completely. There should be a balance between national expenditure and revenue. Since Islam encourages moderation in spending and simple lifestyle, this will not have more side effects than benefits for the community.
- Instead of keeping knowledge secret and selling it for large amounts of money, it needs to be freely shared for the benefit of everyone.
- All these measures can’t be taken suddenly. The Prophet sallallahu alaihi wa sallam didn’t abolish interest in one day. He eradicated it in steps so that the community could adjust gradually to the consequences.