Book Reports

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211

Book Reports

1. Leading Issues in Islamic Economics and Fi- nance: Critical Evaluations

Author(s): Zubair Hasan Publisher: Palgrave Macmillan Date/Year of Publication: 2020 Number of Pages: XIX, 402 ISBN: 978-981-15-6514-4 eBook ISBN: 978-981-15-6515-1 Book Report:

The book discusses leading issues in Islamic economics and finance that continue to remain in a fluid, non-consensual state in the profession. It examines the nature and significance of Islamic economics.

The book deals with the mainstream topics including growth, environment, distributive justice, monetary policy, risk treatment, methodology and Basel ac- cords to rehabilitate them for the Islamic discipline within the framework of scarcity, self-interest, and gain maximization. Further, it explores the role of the state in directing the economy toward achieving Islamic goals of development and welfare. [Prepared by The Editorial Team]

2. Islamic Finance and Global Capitalism:

An Alternative to the Market Economy

Author(s): James Watkins Publisher: Palgrave Macmillan Date/Year of Publication: 2020 Number of Pages: XIX, 524 ISBN: 978-3-030-59839-6

eBook ISBN: 978-3-030-59840-2 DOI: 10.1007/978-3-030-59840-2

Book Report:

This book examines whether Islamic finance and Islamic economics is challenging the orthodoxy of the money markets. Can ethical finance combined with the prohibition on interest and speculation really work in the global economy? With a political economy approach, the book explores how the industry has grown in modern times – from a short-lived bank in an Egyptian city in the 1960s through to a global industry that is today valued at US$2.05 trillion.

From the revelation as articulated by the Prophet Muhammed (ﷺ) in the seventh century through to the gleaming 21^st century skyscrapers of Dubai and Kuala Lumpur, the book covers the end of European colonialism, the controversial utterances of self- styled religious leaders, the impact of Islamophobia, and the efforts to end poverty through Islamic microfinance. The book uncovers an industry that is both profitable and changing the face of contemporary capitalism. [Prepared by The Editorial Team]

3. An Islamic Model for Stabilization and Growth Author(s): Adama Dieye

Publisher: Palgrave Macmillan Date/Year of Publication: 2020 Number of Pages: XXIII, 243 ISBN: 978-3-030-48762-1 eBook ISBN: 978-3-030-48763-8 DOI: 10.1007/978-3-030-48763-8 Book Report:

This book comes at a juncture of potentially devastat- ing crises. Economies are suffering from instabilities resulting from, inter alia, high indebtedness, forced austerity, supply chain disruptions, massive inequali-

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ties of income and wealth, political turmoil and conflicts, heightened levels of risk and uncertainty, and by environmental crises posing existential threat to humanity.

The book argues that the macroeconomic policy adjustment models recommended by the IMF and the World Bank for implementation in many Muslim countries, with substantial donor financial support, have not been effective. Economic indicators show low economic growth, persistent fiscal and external deficits and limited industrialization. Also, these countries are experiencing increases in unemployment, poverty, and substantial growth in income and wealth ‎inequalities. These facts ‎underline an urgent need to produce an alternative to the failed conventional macroeconomic model in order to address the challenge of ‎macroeconomic and social adjustment policies. The fundamental question addressed in the book is: Given that the conventional adjustment and stabilization programs have mostly failed, are there effective alternative stabilization models that could restore stability to economies, destabilized by internal and external shocks, more rapidly, sustainably, and at lower costs than the conventional paradigm? The project posits and investigates the idea that the Islam- ic economic model prescribed in the Qur’ān and applied by the Prophet (ﷺ) could be the ideal model for Muslim as well as non-Muslim ‎countries.

The author, based on theory and empirics, advo- cates to adopt a risk-sharing approach to stabilization rather than the conventional paradigm of shifting or transferring risks of policy adjustments.

The many interesting and useful theoretical and empirical features make this book a valuable contribution to the field of economic policy making. It is among the first successful efforts in investigating the empirical implications of a paradigm whose theoretical consideration began a few decades ago. For all these reasons, policy makers, students of economics and finance, researchers and analysts would be remiss in not availing themselves of this highly relevant and unique work that proposes an effective solution to a serious problem that has been plaguing developing and emerging market economies. [Pre- pared by The Editorial Team]

4. Enhancing Financial Inclusion through Islamic Finance (2 Volumes)

Author(s): Abdelrahman Elzahi Saaid Ali, Khalifa Mohamed Ali, Muhammad Khaleequzzaman (vol.

1), and Mohamed Hassan Azrag (vol. 2) (Editors) Publisher: Palgrave Macmillan

Date/Year of Publication: 2020

Number of Pages: XXII, 245 (Volume 1);

XXXIII, 373 (Volume 2)

ISBN: 978-3-030-39934-4 (Volume 1);

978-3-030-39938-2 (Volume 2)

eBook ISBN: 978-3-030-39935-1 (Volume 1);

978-3-030-39939-9 (Volume 2)

DOI: 10.1007/978-3-030-39935-1 (Volume 1);

10.1007/978-3-030-39939-9 (Volume 2) Book Report:

This book, in two volumes, highlights the concept of financial inclusion from the Islamic perspective. An important element of the Sustainable Development Goals (SDGs), financial inclusion has been given significant prominence in reform and development agendas proposed by the United Nations and G-20.

The significance of Islamic financial inclusion goes beyond improved access to finance to encompass enhanced access to savings and risk mitigation products, as well as social inclusion that allows individuals and companies to engage more actively in the real economy. It represents one of the important drivers of economic growth.

Gender disparity exists within financial access and its extent varies widely across world economies.

South Asia, the Middle East, and North Africa have the largest gender gaps, with women in these regions being forty per cent less likely than men to have a formal account at a financial institution. Analyzing how Islamic financial inclusion can empower individuals, the first volume explores the contribution of Islamic microfinance in achieving SDGs and solving income and wealth inequality. Comprising a combi- nation of empirical evidence, theory, and modelling, this edited collection illustrates how to improve access to finance.

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The second volume explores the financial risks associated with lending to low-income groups due to high poverty levels and the lack of collateralization mechanisms. The book provides empirical evidence of Islamic microfinance, deposit insurance, and micro-entrepreneurship through the analysis of models and country case studies. This edited collection will be of value to those researching development finance, financial inclusion, and Islamic finance. [Prepared by The Editorial Team]

5. Fintech, Digital Currency and the Future of Islamic Finance: Strategic, Regulatory and Adoption Issues in the Gulf Cooperation Council Author(s): Nafis Alam and Syed Nazim Ali (Editors) Publisher: Palgrave Macmillan

Date/Year of Publication: 2021 Number of Pages: XIX, 246 ISBN: 978-3-030-49247-2 eBook ISBN: 978-3-030-49248-9 DOI: 10.1007/978-3-030-49248-9 Book Report:

The banking and financial landscape has been inun- dated with technology over the last decade, with FinTech, InsurTech, and RegTech being just some of the new applications within finance. FinTech is a great testimony of the power of entrepreneurship and technology when combined. It is no longer a disrup- tion to the financial system but rather an accelerator of better customer service in a more affordable and compliant manner; the sooner the global and regional financial institutions realize this, the sooner they will gain from the phenomena. Islamic finance is no exception to such change.

In the Gulf Cooperation Council (GCC), FinTech is yet to find its feet despite several digital transfor- mation drives initiated by the regional governments in the UAE and Bahrain. In comparison to conventional finance, the use of FinTech within Islamic financial institutions (IFIs) in GCC countries is still in its very early stages. However, the potential disrup- tion that technology may cause for the Islamic finance sector within this region cannot be underesti- mated. Aiming to highlight, examine and address key strategic, operational and regulatory issues facing

IFIs as they make an effort to keep up with the FinTech revolution, this book explores the market positioning, product structure and placement, deliv- ery channels, and customer requirements within the GCC market. The authors evaluate the current situa- tion and look forward to future regulation surround- ing technology and financial institutions within the GCC. With comprehensive and in-depth coverage of FinTech, cryptos, and Islamic legal perspectives and regulations, scholars and students researching Islamic finance and financial technology will find this book an insightful and valuable read, as well as those interested in international finance more generally.

[Prepared by The Editorial Team]

6. Why Ethical Behaviour is Good for the Economy:

Towards Growth, Wellbeing and Freedom Author(s): Morris Altman

Publisher: Edward Elgar Date/Year of Publication: 2020 Number of Pages: 224

ISBN: 978-1-78254-944-4 eBook ISBN: 978-1-78254-945-1 DOI: 10.4337/978-1-78254-945-1 Book Report:

In this ambitious and wide-ranging book, the author takes a behaviorally informed approach to answer the perennial question of how capitalism relates to ethics.

For years economists corrupted the top business schools with the message that ethical behavior is a loser, and greed is inevitable in the circle of winners.

But the evidence is clearly to the contrary. Business leaders and policy-makers have been changing their tune in recent years, recognizing that honesty and integrity are good both for the individual and for the functioning of a vibrant economy.

By examining the choices made by firms, con- sumers, and government, the author shows how markets and morality can interact and support each other – and more importantly, under which circum- stances they do not. In doing so, he offers a blueprint for reform to ensure global wellbeing continues to rise without compromising other ethical goals such as equality and freedom.

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This book offers a nuanced critique of the nudge narrative, and demonstrates why and how ethical behavior can have significant positive economic and wellbeing outcomes. The author models a complex alternative to the expectations of ethical behavior and shows how this behavior can be consistent with competitive market economies, contrary to what conventional economic theory suggests.

Providing an alternative theoretical framework to analyze the relationship between ethical behavior, decision-making environments and capabilities, individual preferences, and the economy, the author examines how being ethical can be an engine for economic growth and development. The book offers a better understanding of how ethical behavior is good not only for the economy, but also for improv- ing the wellbeing of our society at large whilst re- specting and enhancing the rights and freedoms of individuals. [Prepared by The Editorial Team]

7. COVID-19 and Islamic Social Finance Author(s): M. Kabir Hassan, Aishath Muneeza, and Adel M. Sarea (Editors).

Publisher: Routledge

Date/Year of Publication: 2021 Number of Pages: 264

ISBN: 978-0-367-63993-8 eBook ISBN: 978-1-003-12171-8 Book Report:

It is said that the COVID-19 pandemic has turned back the poverty clock. As such, there is a need to have social mechanisms put in place to provide relief to those who are affected in this regard. Islamic social finance consists of tools and institutions that could be used to alleviate poverty. This book explores the impact of COVID-19 on Islamic finance to better understand the effectiveness of Islamic social finance in helping those who have been affected by poverty overnight due to the halt in all major economic activities in the context of the pandemic.

Since the struggle against poverty in each country will be different, the book attempts to shed light on the experiences of different countries by presenting

successful models of Islamic social finance. The book first looks at poverty and COVID-19 before delving into the role of Islamic social financial institutions and how they have risen against COVID-19.

The book concludes by examining the impact of COVID-19 on Islamic microfinance.

This book is the first of its kind on the subject of COVID-19, and it intends to bridge the gap in the literature. [Prepared by The Editorial Team]

8. Islamic Economics and COVID-19:

The Economic, Social and Scientific Consequences of a Global Pandemic

Author(s): Masudul Alam Choudhury Publisher: Routledge

ISBN: 9780367749149 eBook ISBN: 9781003160229 Book Report:

The recent pandemic took an unprecedented and catastrophic toll on the health, economy, and mental wellbeing of the people globally. This has forced academics to revisit the disjunctive form of multidisciplinary research and theories. This book is a timely exploration of an unprecedented, cataclysmic pandemic episode. It examines certain critical aspects of socio-scientific theory across a variety of diverse themes, and through an epistemic lens. The book investigates the general theory of pandemic episodes and their adverse long-term effects on human and environmental wellbeing. It includes an in-depth study of COVID-19 but also looks to the future to contemplate potential pandemics to come.

The existing approach to the study of pandemics is critically examined in terms of the prevalent isolat- ed and thus mutated way of viewing human and mechanical relations in the name of specialization and modernity. The book presents a novel model of science-economy-society moral inclusiveness that forms a distinctive theoretical approach to the issue of normalizing all forms of pandemic challenges. It is methodologically different from existing economic

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theory, including the critical study of microeconomic foundations of macroeconomics. Human and environmental existence along with its multidisciplinary outlook of unity of knowledge between modernity, traditionalism, and socio-cultural values is empha- sized in the treatment and cure of pandemic episodes.

The book is a unique reference work, offering fresh wisdom within the moral methodological worldview.

[Prepared by The Editorial Team]

9. Islam and Economics:

A Primer on Markets, Morality, and Justice

Author(s): Ali Salman Publisher: Acton Institute Date/Year of Publication: 2021 Number of Pages: 160

ISBN: 978-1-880-59546-6 Book Report:

This primer is an introductory text to rediscover the principles of commerce and economics revealed in the Qur’ān, espoused by the Sunnah (practices of the Prophet Muhammad ﷺ), and understood by the jurists. Islam offers three moral principles of economic organization: ownership, wealth creation, and wealth circulation. Based on these principles, the book derives a framework of operational institutional tenets for the economic organization of a society. It addresses all important business, policy, and equity issues that any economic system should resolve and broadens the discussion on the modern discipline of Islamic economics. [Prepared by The Editorial Team]

10. Monetary Policy, Islamic Finance, and Islamic Corporate Governance: An International Overview Author(s): Toseef Azid, Murniati Mukhlisin, Nashr Akbar, and Muhammad Tahir (Editors).

Publisher: Emerald Publishing Date/Year of Publication: 2021 Number of Pages: 456

ISBN: 978-1-80043-787-6

eBook ISBN: 978-1-80043-786-9

Book Report:

The editors of the book bring together leading researchers to provide a state-of-the-art overview of the monetary policy, corporate governance, their legal and regulatory issues and procedures that structure Islamic banks (IBs) and other Islamic financial institutions (IFIs). Monetary policy and corporate governance are integral to macroeconomics and microeconomics while interest rates are a key part of monetary policy. Given negativity associated with interest rates, Islamic economists have sought alternative instruments.

Focusing on the populous Muslim countries such as Pakistan, Malaysia, Turkey, Bangladesh, and Indonesia, this book explains how corporate and Sharīʿah governance structures work together under the umbrella of Islamic monetary policy, and in the process, provides guidelines that how such structures improve corporate social responsibility in order to serve the best interests of all stakeholders. The chap- ters included here cover various features of IBs and IFIs, corporate performance and strategic analysis of microfinance Sharīʿah-based non-banking institutions, in order to investigate the role that these pro- cesses play in shaping broader global financial systems. For instance, it portrays different governance models of central bank of a country like Iran having a Sharīʿah-based financial system.

In conclusion, the book explores the interrelation- ships between corporate governance from the perspective of Sharīʿah, banking industry, and Islamic monetary policy. [Prepared by The Editorial Team]

11. Islamic vs Mainstream Economics:

Exploring the Differences Author(s): Leslie John Terebessy Publisher: ZS Publications Date/Year of Publication: 2021 Number of Pages: 224

ISBN: 979-8-50687635-9 Book Report:

The analysis presented here argues that the problems afflicting present-day economies arise primarily from

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the use of interest-based banking. Analysis shows that, in contrast to the teaching of mainstream economic theory, interest as an incentive for ensuring an efficient allocation of resources simply does not, and cannot, achieve results that are in any sense compa- rable to those that may be achieved when profit is used for the purpose. Significant differences exist between profit and interest as motives for the efficient allocation of capital. These differences have important consequences not just on how resources are allocated, but also on how the rewards of produc- tive activity are distributed. To make matters worse, with a few exceptions, all analysis takes place within the Keynesian or neo-Keynesian paradigm. A number of observers have already stated that Keynesian theory is flawed and, thus, hardly suitable to provide the basis for serious analysis.

The work presented here recommends adopting a paradigm that is free of interest as an incentive for rewarding economic activity. It tries to demonstrate that resources are allocated more efficiently when profit rather than interest is used as the primary incentive to reward economic activity. Islamic finance has not been palpably successful in addressing various macroeconomic challenges. In replicating mainstream finance, it has produced debt-like structures, with income and capital guarantees that in substance make them little different from interest- bearing bonds. Thus, as a number of observers have stated, we have witnessed what appears to be a conventionalization of Islamic finance rather than the Islamization of conventional finance.

The main flaw in the present-day economic theory is the view that interest serves as a suitable incentive for rewarding participation in production. Analysis shows, on the contrary, that interest-based finance produces a range of harmful macroeconomic effects.

These include inefficiency, indebtedness, inflation, unemployment, stagnating growth, cyclical instability and an uneven distribution of wealth. As the problems mentioned above are produced by different forms of interest-based financing, it follows that they should be addressed by implementing risk sharing as the preferred method of financing over borrowing at interest on a system-wide basis. The work presented here is based on a decade of teaching economic theory, both in Canada and in Malaysia, as well as

several years of research in Islamic banking and finance at IAIS Malaysia. The research presented here draws on both sources. [Prepared by The Edito- rial Team]

12. Risk-Sharing Finance:

An Islamic Jurisprudence (Fiqh) Perspective

Author(s): Saad Bakkali and Abbas Mirakhor Publisher: Walter de Gruyter

ISBN: 978-3110590463 Book Report:

The contemporary finance deals mainly with multilateral and multi-counterparty transactions. Islamic jurisprudence (fiqh) has yet to develop its conceptual- ization of this modality of financing. Thus far, it has become a norm for large financing projects to rely on a complex structure of interconnected bilateral contracts that in totality becomes opaque, complex and costly. An unfortunate result of the unavailability of an efficient fiqhī model applicable to modern multilateral and multi-counterparty contracts has been the fact that the present Islamic finance has been forced to replicate conventional risk-transfer (interest rate based) debt contracts thus drawing severe criticisms of duplicating conventional finance.

In 2012, a gathering of some of the Muslim world’s most prominent experts in Jurisprudence (fuqahā’) and economists issued the Kuala Lumpur Declaration (fatwá) in which they identified risk sharing as the essence of Islamic finance. The declaration opened the door for a new fiqh approach to take the lead in developing the jurisprudence of multilateral and multi-counterparty transactions. This declaration (fatwá) provides a prime motivation to search for a comprehensive model of risk sharing that can serve as an archetypal contract encompassing all potential contemporary financial transactions. From the perspective of Islamic jurisprudence (fiqh), the technicalities of the concept of risk sharing in contemporary finance have yet to be defined in Islamic literature.

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This book attempts to clarify and shed light on these technicalities from the perspective of fiqh. It is a comprehensive study that relies on the fundamental Islamic sources to establish a theoretical and practical perspective of fiqh encompassing risk-sharing Islamic finance as envisioned in the Kuala Lumpur Declara- tion of 2012. This new paradigm should lead to a more efficient approach to multilateral and multi- counterparty Islamic contracts which, here-to-fore has been lacking in the current configuration of Islamic finance. [Prepared by The Editorial Team]

13. The Grip of Death: A Study of Modern Money, Debt Slavery, and Destructive Economics

Author(s): Michael Rowbotham Publisher: Jon Carpenter Publishing Date/Year of Publication: 1998 Number of Pages: 337

ISBN-10: 9781897766408 ISBN-13: 978-1897766408 Book Report:

It may be a little bit of odd that the Journal draws attention to this book, which has been published of about a quarter of a century. Despite its thorough coverage and analysis of vital topics such as debt and money, the book received little attention, to say the least, from the Islamic economics literature that have dealt with money and monetary issues. Words of the title of the book spells out from the outset the main message that the author tries to convey in a non- jargon treatise, to address a wide range of audience.

For instance, the words ‘the grip of death’ is a literal translation of the very well-known term ‘mortgage’;

which implies ‘a pledge from the owner of a house to another [the financier = usually banks] over his/her property until death’. As we all know that the financing scheme through mortgage plays significant role in modern economies and result in heavy burdens on the mortgagees and the society upon the burst of

‘housing sector bubble’ as witnessed in many ad- vanced economies over the past few decades. But what lies behind the reoccurrence of such crisis and the like (e.g., the dot.com bubble)? The book points out to the nature of money that prevails in nowadays

economies. Money is created as debt by financial institutions and constitutes well above 90% of money supply in major economies (e.g., 97% in UK). In a lucid and original account of where money comes from and why most people and businesses are so heavily in debt, the book builds its synthesis for a radical reform to the monetary system in UK and elsewhere. The author proposes a new mechanism for the supply of money, creating a supportive financial environment and a decreasing reliance on debt. In addition, the book addresses wide range of important issues:

 Why virtually all the money in the global economy has been created as debt; why only 3% of UK money exists as ‘legal tender’; and why in a world reliant upon money created as debt, we are kept permanently short of it?

 Why business and corporate debt is at its highest level ever? And we may add, why the global debt has reached a climax in 2021? According to the latest figures (May 2021) by the International Fi- nancial Institute (IIF) the global debt stood at 389 trillion US dollars; which is equivalent to over 360% of the World GDP (IIF: https://bit.ly/3qwxecj).

 Why debts mean that a small farm can be produc- tively very efficient, but financially ‘not viable’?

 Why national debts can never be paid off -without monetary reform?

 How ‘Third World debt’ is a mechanism used by developed nations to inject ever-increasing amounts money into their own economies, and why debtor nations can never repay the debts.

What’s more interesting and worthy noticing is the fact that the “book challenges the widespread as- sumption that the monetary statements and statistics commonly used as the basis of economic decisions are valid. The general confidence in modern money and monetary judgements is utterly misplaced; the apparent neutrality of the present financial system is quite false. Modern money is not a neutral medium;

indeed, the way in which money is currently created gives it a specific nature and serious bias. Modern money operates within its own detached and limited mathematical world. It projects its own version of

‘the facts’; its own version of an economy; its own

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reality. It tells us what we can and cannot do; it tells us what we can and cannot afford. But these amount to demonstrably false, irrelevant and misleading statements”. The author had also put very deep question that is still valid, but unresolved “If all the nations of the world are in debt, who are they in debt to? Rationally, where there is a debtor there should be someone else who is a creditor. If every nation is in debt, who precisely, owes whom?” The irony goes deeper than that when the author wonders about what sort of results that developing counties get when they copy ‘the Western economic model’, “what can we say to the developing nations struggling under the burden of debt, nations who have copied our economic institutions and aspire to a life free of poverty?

‘Work hard, and one day your debt will be as small as America’s – a mere five trillion dollars’”, (pp. 1- 2). Indeed, it is a logical and unescapable destiny that developing nations are dwelling in.

Based on that and other thorough analysis that draws wisdom from wide range of spectrum in the monetary history of US, UK and others as well as

from eminent and impactful politicians like Abraham Lincoln (1809-1865) with his famous monetary policy reform of 1865 and eminent economists and/or quasi-economists not heard off (marginalized), in the dominant school of economics profession like Clifford Hugh Douglas (1879-1952) who was a British engineer, but developed interest in economics that led him to be “the founder of the social credit movement which began in Britain in the 1920s”, (pp.

216-236).

Though, as we stated at the beginning of this brief overview about the book that almost quarter of a century had passed since the publication of the book, most of its analysis and diagnosis of the mayhem that monetary systems, in UK and elsewhere, suffer from are still valid. This gives importance to the revisit of this thought-provoking work to be read with compre- hension and attention from Muslim economists and other economists of ‘orthodox’ and ‘heterodox’

schools of economics. [Prepared by The Editorial Team]