Islamization has been our ambition, our problem and also a source of disillusionment at our performance. Why this has been so, is a task to which all of us, and particularly those dealing with national priorities in the field of planning must revert their attention. 

Islam provided us the core-values for our identity even before we launched ourselves on our post-independence life as an independent state. After independence no model was available on which we could base our constitution. Certain general principles were agreed upon, and saw the light of the day as the twenty-two agreed constitutional principles between the Ulema of all shades of opinion. Beyond this point the Pakistani community could not go. The amorphous widely shared Islamic identity never led to crystalization into a forward looking, dynamic and effective Islamic system of governance. The causes of this failure have never been agreed upon. They must nevertheless be discussed if only to be sure that our expectations were reasonable and we were asking the right questions. The long and persistent lament about our failure in terms of concrete achievement itself needs some analysis. 

In the early years of Pakistan the groups most committed to Islamization could offer few concrete suggestions and appeared to be content with "the Objectives Resolution" appearing as Preamble to the Constitution, some principles stated in the unenforceable part known as "Principles of State Policy" and a machinery devised to advise the method for gradual introduction of Islam through two constitutional bodies namely Institute of Islamic Research and the Council of Islamic Ideology. They hailed the 1956 constitution as an Islamic constitution. It appears that within their own minds they were not very clear about what more to ask for. Or perhaps they had pinned their faith genuinely in the evolutionary process. It is true that at that point of time the questions about running a modem state and economy on purely Islamic terms appeared too novel and daunting to bring forth a confident response for which a legitimate consensus could be claimed. 

The official explanation for such an arrangement was that there were many complicated problems requiring deep study and bold ijtihad and that lot of work was necessary before an Islamic Interest free economy could be implemented. Initially apart from the delays in putting them together, Islamic Research Institute was the more active of the two constitutionally created bodies for the process of research for the purpose of Islamization. Unfortunately during Ayub Khan's period some writings of Dr. Fazlur Rahman became controversial. As a result on the basis of a purely political decision he left, and thereafter by choice or otherwise, Islamic Research Institute as a centre of Ijtihad-oriented work became almost moribund. During this period and for years thereafter the Council of Islamic Ideology used to meet twice or thrice a year. It was only after 1977 that it became very active. 

Over the years the Council of Islamic Ideology put in a large number of recommendations but the governments did not make any special efforts towards implementing them. As regards the study of the difficult problems holding up the process of Islamization, little groundwork was done or even attempted. No group of competent economists was ever brought together and assigned the task of designing an economic model on the basis of the Quranic injunctions appertaining the field of economic management. Similar was the neglect in the constitutional field. It was only after 1977 that government showed interest in some fields and asked for prompt recommendations in regard to them, with the result that in some spheres of choice of the government, some recommendations were implemented: These were Zakat and criminal law. A cosmetic experiment towards interest free investment was also attempted. 

A significant result of the exercise was the discovery of vast differences of opinion which previously were not even suspected to be existing. Differences existed on the very definition of a Muslim, and even more prominently about what constituted the first or prime priorities of Islam. Questions raised about the validity of the means adopted for implementation of Islamic values and laws were even sharper. Sectarian identifications came out in bold relief. 

All this is in sharp contrast with people's attitude. From the very first moment when the idea of Pakistan caught the imagination of the Indian Muslims, the would be Pakistanis had shown scant interest in the sectarian Islam. Quaid-e-Azam's vision of Islam and an Islamic State had no place for sectarianism. In his lifetime he had never allowed it to have any divisive effect in the single-minded unity of the Muslims of the subcontinent that he had brought about. The Islamization 'which we are witnessing has brought forth sectarianism in its worst form. The disillusionment on this account is understandable. 

The sectarianism which surfaced as a result of Government's policies was avoidable. Sectarianism entered into the folds of Ummah a long time back. Some of the most venerated personalities of earliest period of Islam became involved, in legal and political disputes which cannot be resolved today, nor is it our office to resolve them (Q.3.55). They represent wounds which over the ages have refused to heal. They are better left alone. Instead of tinkering with them afresh, we should have faithfully tried to implement the priorities for which a mandate was given in terms of the vote for Pakistan. We could have effectively by-passed the sectarian differences as Quaid-e-Azam had done by emphasizing the unity of interests in a very wide) field of public weal.  

In the fields wherein consensus existed before partition of sub-continent, consensus continues. We will presently identify them, but first a brief look at the factors which do not permit resolution of sectarian disputes. 

No one in our times has received any mandate from any quarters to resolve the sectarian issues. No confidence has been expressed about the official capacity to undertake this task, nor has any promise been made to accept the official view. In the present situation we are neither in a position to adjudge, nor are we required to adjudge this issue. Quran is explicit about us not being asked about the deeds of those who went before (Q.2.134). It also prescribes for us to seek Allah’s forgiveness for ourselves and all those who have gone before with iman (faith) intact and to entertain no hard feelings against them (Q.59.10). 

The present situation is charged with grave mutual doubts. Everyone's motives are suspect, more so of the rulers. We would need a much greater quantum of mutual confidence to make the sacrifices necessary to get out of the present quagmire. Obviously therefore, irrespective of our desire for great achievements we first need to increase unity in our ranks. It should also not be forgotten that in the pre-partition period of struggle for Pakistan and for a considerable time thereafter we had been free of sectarianism. 

Quran has described unity as a great boon and Divine mercy of the highest order (Q.l1.118). Quran has also informed that it does not come from mere spending of money on a wide scale (Q.8.63). And according to Quran disunity in ones ranks is one of the ways in which a people are punished (Q.6.65). Disunity is often the result of willful disregard of each others view and interests after knowledge has come to people (Q.45.l7). Unity like truth cannot be forced upon people (Q. 3. 103). If Allah had wanted HE could have united all people (Q.42.8). The best way to avoid disunity is to leave alone the problems that cannot be resolved to be decided by Allah on the Day of Judgment. 

Judging the correctness of anyone's faith is a task Allah has reserved for himself (Q.88.22). If a person claims to be a Muslim and accepts Islam, we need deal with him on such basis (Q.4.94). Muslims greet each other with a prayer for peace. We have been told that when we are so greeted we should not protest the faith of such a person (Q.4.94). 

On our way to Islamization we have violated the entire set of principles referred above. According to the teachings of Islam there is a certain hierarchy in the value system (Q.9.l9). Great care has to be taken of those values whose disregard is likely to bring about troubles for the good and the bad alike (Q.8.25). 

To find out how unity was brought about and nurtured in the ranks of the Ummah in the first instance the Meccan period of the life of the Prophet (PBUH) provides an excellent example. If we look at the Meccan period of the Prophet's (PBUH) mission we find that in spite of the fact that he had no largess to distribute, nor power to protect, he nevertheless provided to each new convert a great vision of harmony with his Creator and. the universe of His creation, a new sense of personal worth and significance coupled with a sense of belonging which appeared stronger than every other known tie of love, relationship or birth. No one who joined the ranks of Islam during this period ever left its folds. All the worldly ranks of status, wealth or power were dissolved in a newly emerging brotherhood found on the bedrock of Justice and Equality. 

For the leadership of the new Pakistani nation which had resolved to make Quran and Sunnah the foundation of its social structure as reflected in the Objectives Resolution, the nurturing of the above values was the prime task. The record of our performance in regard to these values is indeed poor. Those to whose lot fell the implementation of these values unfortunately, had neither studied their history wisely nor imbibed these values deeply. In fact they were new to both power and leadership, and did not know the heavy mortgages both carry. Their defacto model for exercise of power was imperial. It is designed to place distance between the rulers and the ruled. They succeeded only in aggravating the problems by extending this distance. 

The vision of Pakistan was also sullied by a mad rush for evacue property and other good things of life which became the ruthless national pre-occupation in the first years of Pakistan without regard to the basic values of Islam (Q. 102. 1). Of course Quran is not against prosperity (Q.4.100) or fair use of wealth (Q.7.32). Quran speaks of it as a Divine mercy (Q.3.171) but also as a source of trial (Q.21.35). Wealth however is not an end in itself. 

The new prosperity was never subjugated in Pakistan to the conditions Quran prescribes for its use. It became, on the one hand a source of a new class structure we had not known before partition, and on the other cause of a massive moral failure. The new prosperity played hell with the sense of belonging which is so important to the Islamic social structure. The new ostentatious style of living, the display-oriented style in housing, transport and apparel became the sole criterion of success and fulfillment. The aggressive competition and unholy alliances that grew between the elites (the bureaucracy, the landlords and the new industrialists) left people singularly lost and disillusioned. Of course the disenchantment of the youth was different from the let down that the older generations felt. In one sense this was inevitable. Pakistan for everyone was a private dream. It was never articulated publicly except in bare outline. One thing is however certain. The most sensitive and delicate unit in which to nurture the sense of belonging, the youth was mercilessly to be fractured almost beyond repair. 

The suggestion repeatedly made that adoption of simplicity in life being" a major Islamic value be first attended to fell on deaf official ears. 

OPERATION OF ZAKAT 

In the above-described context of visible class differences between the rich and the poor, propaganda oriented imposition of truncated Zakat system only accentuated the class hatred. Zakat was not collected from large chunks of property, both movable and immovable, and was imposed almost entirely on savings of non-business and nonprofessional middle class or poor people. It was distributed in such small doses that it solved no one's problems. Because of these reasons conspicuous spending increased on the one hand and avoidable penury on the other. 

Zakat has very important relationship with the tax structure and inflation factor in the national economy. The tax rates are very high. Cumulatively they become wholly unconscionable. People are not satisfied that what is demanded of them is fair. They are even more dissatisfied with the manner in which the collected taxes are spent and the priorities that are served. Tax avoidance is prevalent on a very large scale. People were advised on high religious authority in the pre-independence days that it was a virtue to avoid payment of taxes to the Imperial rulers. Finding the behaviour of present rulers not materially different the same fatwa is used against them. In such a system a well to do person finds it unsafe in the extreme to disclose the true state of his savings and to pay Zakat truthfully. Were he to do so, he would immediately fall afoul of the tax hounds. 

Most people give Zakat to their close or distant relations about whose identity they would like to maintain some secrecy. The law regarding collection of Zakat has no room for Zakat-giver's personal preferences. Of course it can be powerfully argued that because government collects from a very narrow base, let people pay Zakat to their close relations from those sources from which no Zakat is collected officially. But powerful arguments are not necessarily universally true, or acceptable. 

Zakat traditionally was collected from savings which were not put to use for a year. Toe people's savings deposited in banks today are legally speaking loans to the banks which are being used by the banks for their trading purposes. Technically no Zakat is recoverable from these savings. Secondly the Zakat is being collected from the bank deposits of a particular day, irrespective of the length of time for which the amount has remained in deposit. The departure is most fundamental and raises serious questions as to what is being collected is truly Zakat or a secular tax being collected in the name of Zakat. 

According to some sectarian views Zakat can be paid only to some specified persons who belong to the sect. While making the law no attention was paid to the views of this sect, nor was a way found for avoiding the resultant problem that have arisen. Zakat law could easily have been designed to avoid this embarrassment. 

Not enough thought was given to the problems that arise due to the inter-relatedness of Zakat, taxation and inflation. Admittedly a modem government undertakes a large number of functions which were not considered duties of the government in the early eras. The funds requirement of a modern government is consequently far greater than those of governments of the medieval times. Some taxes over and above the Zakat normally recoverable are obviously necessary. Now, people have serious grievances about the principles on which taxes are fixed, as also about the quantum demanded, and the manner in which they are collected. The complaints about the application of what is collected are ever greater. The de facto situation today is that those who benefit most from the existing system pay the least for its maintenance. The Zakat as imposed only increases the burdens of the paying ones, without concommitent benefits. More so when benefits go to some unknown person in preference to a known one. At every turn under the new dispensations injustices are compounded. Even if they are not actually so, in view of the claims about Islamization they are felt to be so. Under the Islamic law it is the duty of the Ummah to oversee distribution and application of Zakat. Do our governments give weight to this principle while designing, imposing and spending the taxes? 

The inflation factor also takes a heavy toll from the life long savings of every one who planned his future with common sense and frugality. The tragedy is compounded when they are told that under the new dispensation they are not entitled to any benefits or concessions. The evil influences of inflation are innumerable. The command in Quran to avoid it is absolute (Q.7.85). Government generated inflation apart from the imported inflation has now become a fact of life. Notwithstanding the absolute Quranic injunction no worthwhile steps have been taken to exclude it from official policy making. Nationalized banking makes it easier. When government moves forward to collect the already imposed taxation at heavy rates, it has no moral justification for covert dimunition of peoples' wealth and savings. More so when it is under a prime duty to protect what people have lawfully earned, or what lawfully belongs to them. 

Under the present circumstances without correction of an unfair tax system and the massive inflation, collection of Zakat appears to most people like an added imposition. For clear lack of moral justification the true quantum of recoverable Zakat is neither paid nor collected. The built in inequities of the economic order distort the Zakat system also. The result is that the benefits that are expected do not materialize. As a cumulative result the existing frustrations are compounded, so that even the image of Islam is seriously tarnished, and new doubts about its viability start floating around. Powerful vested interest attempt foreclosure of future steps in the process of Islamization by adding fuel to fire. The truth of the matter is that the current economic order conflicts with the principles of economic management of Islam at many points, in fact in the very perception of what would be a fair economic model. Islamization would need a total reconstruction with radical re-arrangement of the socio-political order. Patchwork would not do. And it is precisely ill-conceived patchwork which is being resorted to in the name of graduation. 

THE LEGAL FIELD 

The second field of choice was the criminal law. Here in again legislation was resorted to without adequate research and comprehensive planning. What preceded in terms of motivation may be noticed. It was the assessment of the Government circles that delay in disposal of cases and particularly the criminal cases was a point of grave concern and irritation for the people. Early disposal of cases would win popularity for the government. 

Notwithstanding the analysis of causes of delay in the several reports of the law commissions set up by the government from time to time which pointed out various other factors, the layman's view that prevailed was that cumbersome laws and unending adjournments were the real causes. Sophistication became a demerit and we took a leap in favour of medieval primitiveness while hoping to discover simplicity. The so-called knowledgeable experts who advised these choices were also partly to be blamed. As a result the government loudly justified its decision in opting for simpler and awe aspiring laws which would not only punish the guilty but also frighten the would-be criminal into good behaviour. What could, it was assumed, be simpler in procedure than Islamic law, and its punishments were also awe-inspiring. By adopting Islamic criminal code the Government was hoping to simultaneously achieve several goals, become popular by virtue of a step which clearly carries public support, and prevent crime by putting fear of God and severe punishments into the hearts of would be-criminals. 

On ground, the task which appeared deceptively easy in theory, proved singularly difficult. Quran prescribes punishment for a very limited number of offences and also provides equally brief directions in regard to rules of evidence. Over the centuries innumerable ancillary provisions had developed, which in common parlance are also treated as part of the Shariat. Some aspects of the later day accretions are clearly dated and doubtless impossible to operate in the new socio political or cultural milieu. 

The problem that the Ummah, and more than Ummah, the Ulema, the traditional guardians of Muslim legal heritage, are confronted with is, of having to perforce discard part of the heritage that has for centuries been preserved as Shariat. The oft-repeated statement that Islam is a complete code for every aspect of a believing Muslim's life adds a dimension to the dilemma touching the very roots of faith. If Islam is perfect and complete then nothing can be discarded (because it will thus become less perfect) and nothing can be added because any addition by definition assumes a deficiency. Any step in either direction on their reckoning, involves passing of a judgment of error, which by definition is to be avoided.

Our glorious history is our gilded cage. The result is that the Muslim criminal law that has been enacted with the direct assistance of the Ulema has innumerable medieval aspects; at some points it appears even to conflict with the Quranic text. We have not yet seen the last of the problems created by it. Some sects or sub-sects felt that through the enacted hudood laws later day Hanafism was being imposed in the name of Islam. If they had not accepted Hanafism in its heydays then they would not accept it today. For instance Shias object to the definition of hand that is to be severed in case of proof of theft. Some object to imposition of any punishment at all in zina cases where four witnesses are not available.

 Inspired by a fresh re-reading of the original sources {Quran and the Sunnah above all) many modem but committed Islamicists feel that there are many aspects of the new legislation which cannot be accepted as Islamic. For instance presence of four males for proof of zina or imposition of punishment of stoning to death for zina. The modernists who do not feel bound by the Islamic principles consider the Muslim punishments barbaric and outdated. They feel imposition of such punishments, would make people cruel and ruthless. 

There are others who doubt the wisdom of opting for the severe punishments without adequate social and legal preparation. Irreversible punishments would provide oppressive powers to corrupt investigating agencies. With the existing not so adequately honest lower judiciary, and the prevalence of habit of false testimony the irreversible severe punishment may cause lot more harm than good. More so when neither tile magistrates nor the public or the lawyers have adequate insight or knowledge of the Islamic legal system. 

It is also asserted that without creating a proper social milieu, or even attempting to correct the major factors which lead to or facilitate crime, it is unfair to open the field of such severe punishments. People would in these circumstances develop more sympathy with the victim of law than of crime. Malfunction of law is a larger problem than of cumbersome foreign law. Same is the case with delays of law. There are several reports of the Law Reform Commissions, the Constitution Commission, the Commission for Eradication of Corruption, and many more which clearly identify the reasons of the malfunction of the legal system. Not enough attention has been given to their views, nor enough preparation for transfer to the Islamic system has been undertaken. 

Yet another aspect of criticism is that Islamic criminal law can become a tool of social reform only when Islam is first made operational in the constitutional field i.e. the rulers must also submit to the rule of Shariat in regards to their conduct, and the human rights guaranteed by the Shariat be made available to the citizens. They should also become justicible. People must be allowed participation in social, economic and political affairs. This much is the minimal requirement for a truly coordinated national effort at Islamization.

There is considerable validity in most of this criticism. To the extent that the government has failed to respond to it, the problems remain unresolved. Disappointment keeps increasing. Lack of public participation and absence of dialogue with the rulers constantly add to the frustration. Massive use of propaganda about State's commitment and achievements in the field of Islamization, without adequate reflection in deeds, tends to deflect the widely felt frustration against Islam's own viability. 

Lack of public debate results in a situation wherein:

1.       The traditional views that the historically reported models are good enough for modem times also and repeated without demur.

2.       No effort is made to verify if the traditional models truly represent the reality of the reported eras.

3.       No effort is made to discover the options that are genuinely available to the Ummah, and by that right to the contemporary policy makers.

4.       Privately complaints abound that Islamization is impossible. Publicly promises are made that it is around the corner. 

The rest of the paper explores some of the ideas discussed above at a more concrete level and suggests some new avenues of enterprise. 

SOME BASIC ISSUES 

Islamization has become a problem in Pakistan because of the following reasons:

1.       No clear and comprehensive conceptual framework was developed therefore launching on ground programmes.

2.       Many problems arising often clue to sectarian differences were wrongly handled, or ignored when they should not have been (Zakat & Ushr).

3.       While converting recommendations of Islamic bodies into actual programmes too much weight was given to continuance of the status quo, and established power structures were not touched. Reforms ultimately became merely cosmetic and therefore ineffective. (Shariat courts, absence of reform of investigative agencies, exemptions from Shariat's Jurisdiction. Absence of Shariat priorities in national economic planning.)

4.       According to the Quran every individual is bound by a covenant with Allah to submit to His Shariat and no one else's. The prime duty of the State or the ruling agencies is to help each individual discharge the obligation of this convenant.

5.       Power, like any other capability, material, intellectual or physical, is a trust to be used in accordance with the priorities set out in the Shariat. This trust is required to be discharged with Diyanat - i.e. by all comprehensive subjection to the rule of fairness. 

The prime values for the Ummat according to the Quran are:

1.       Justice (Adalat)

2.       Equity (Ehasan)

3.       Freedom (Hurriyat)

4.       Brotherhood (Akhuat)

5.       Equality (Musawat) 

In whatever programmes the ruling agencies prepare, the first test should be: is the constitutional mandate of Quran being implemented and are the above values likely to be aided and advanced by the enforcement of the proposed programmes, whether legislative or administrative. 

According to Quran the affairs of the Ummat are to be decided by Shura. The principle of Shura contemplates the following:

1.       Mutual consultation till consensus is reached.

2.       Giving due weight to the views of all concerned, the better informed and spiritually more sensitive people of course carrying greater weight in the process.

3.       Participation in public affairs is an obligation of every muslim with capability therefore.

4.       The counterpart of this obligation is the duty of the ruling agencies to provide such opportunities to people. 

The second test for the ruling agencies would be to ask whether the proposed course of action affirms and enhances the principle of Shura. 

Every believer on the basis of his convenant with Allah is under duty to perform his obligations irrespective of performance by others. Every person is under an obligation to remove error with his own hands if he can. If he cannot, then is under an obligation to protest against the wrong and lastly he is under a command not to reconcile with what is treated as wrong by Shariat. Every believer has a right guaranteed under Quran to protest against injustice and error in public policy. 

The third test therefore while framing policies by the ruling agencies must be to ask themselves: Are we facilitating the way for performance of the above obligations by the Ummat? Once fair answers to the above questions are seriously sought the constitutional priorities and principles will emerge clearly. They require to be imposed first. 

THE ECONOMIC SPHERE:

i.         According to the Quran the believers are under the obligation to work fruitfully, that is to produce more than what is enough for their needs, so that they are able to participate in the system of Zakat.

ii.       The believers are obliged to create wealth through transaction freely and fairly entered into, in accordance with the preferred values of the Shariat.

iii.      Wealth must be created lawfully, retained lawfully and spent lawfully i.e. in accordance with guidance provided by the Shariat.

iv.      Muslims are prohibited from creating wealth by means prohibited by the Shariat.

v.        In substance production must not be exploitative that is one party making an extra gain because of the inequality in the bargaining power. Production and distribution should similarly be free from deceit or coercion or elements of gambling. Neither should false measures be used no value of peoples goods be demeaned. People be protected from buying or selling in ignorance.

vi.      Wealth may not be relentlessly pursued as the sole objective of life and even when lawfully made must not be made an object of display and also not be hoarded or spent extravagantly; though it may be enjoyed with modesty without creating jealousy and heart-burning in others.

vii.     The wealth which is not used should as far as possible be circulated and not amongst the rich only.

viii.   When not in use it should be lent to Allah. 

It is the duty of the Ummat in its space-time situation to devise ways and means so that the above objectives be achieved and people can enjoy what they produce and can confidently lend to Allah what they do not use, without fear about its return and also without seeking favour for the lending, in the form of Riba. 

The Islamic economic structure is to be built and rebuilt without feeling bound by the Western or Socialist models, but by taking full advantage of the experience of the Ummat, as also by using fully the tools for socio-economic reorganization that are today available. 

MYTH OF STATE PROVIDED WELFARE AND ITS CONSEQUENCES:

It is a popular modern myth carefully nurtured in the capitalist, the socialist, and the Third World countries, that the Governments of the day can take over and more successfully discharge the welfare obligations of the individuals. 

EXPENSIVE BUREAUCRACY:

 On this premise, vast taxes are collected and syphoned off in channels over which public has no control. Notwithstanding the claims that Government operate as a single integrated unit, the fact is that within it several units exist, often carrying on constant internecine war for greater share of the resources. Simultaneously, there exist several big financial empires with in the Government, wherein state agencies further the interests of special groups, exploit or allow themselves to be exploited, to assure to some persons benefits which they should not be getting. Quite often those in charge of these programmes also benefit from the process indirectly or covertly without fear of detection or moral condemnation. The bureaucratic experience of the U.S.A. and U.S.S.R. and many European countries is now a matter of common knowledge. The abuses which modern welfare programmes perpetuate, including parasitism, have gone beyond the stage of public scandal. But the greater wrong that this system inflicts elsewhere.

PARASITISM: What was initially taken as 'aid in distress' has now ripened in to a claim to social and economic equality independent of one's labours or its quality. Lack of capacity to retain a job or to work hard or to make a legitimate saving is explained away as being the result of past injustices or deprivations. 

SELECTIVE PROSPERITY WITHOUT TEARS:

The myth of State being capable of bringing into existence a general state of prosperity without tears (or hard labour) is constantly propagated and reinforced by a broad spectrum of intellectuals and politicians of the western, socialist and Fabian origin. Trade unions, by and large, favour 'nationalization of 'industry' and 'equitable redistribution' without establishing a positive link between productivity and wages, on the one hand, and employment and utility, on the other. They generally, without regard to economic costs, prefer to seek prevention of introduction of new technology which might result in rendering a large number of jobs superfluous. Often by use, or abuse of voting power, they obtain wage concessions which are clearly undeserved. Whereas the labour being exploited in the 19th century may be true in some sectors, the 20th century trend is in the opposite direction. Organized labour, both within the capitalist and the socialist systems, is managing to take more than what is their due by manipulating the governments as well as the political systems. Bureaucracy all over the world welcomes such developments because added responsibilities of distributive justice mean added power and, therefore, added opportunity as well as capacity for larger share in the 'national economic cake'.

ADDED SOURCE OF POWER: 

Rulers of the day also find it convenient not to reduce responsibilities, because extensive responsibilities provide equally extensive justification for continuance or expansion of the power to tax, to manipulate, and to distribute largess to many more than would be possible on the basis of less government and the return of more responsibilities to the people.

OTHER DISTORTIONS:

 On the promise that basic needs of everyone can and will be taken care of by the State, people all over the world have been deprived of more than what should fairly have been taken from them. The governments, by and large, have failed to live up to their promises. The bureaucracies even in the best-administered countries cannot effectively carry out the burden of all the duties assigned to them. What is collected in the name of welfare for all both in the welfare-oriented capitalism or in the socialist states, is spent almost blatantly in service of 'the new ruling classes'. In the capitalist hedonistic West, conspicuous spending is no sin, but even in the socialist USSR big he uses, Dachas, use of special shopping facilities even special lanes in the streets, go to the new rulers. Rulers in the pre-revolution era claimed special privileges on the basis of birth or inheritance, the same special status are enjoyed by the new people's representatives, the bureaucrats, and in the socialist world by the party members. In the name of people, a dual process goes on, partial democratization of some good things of life, but more widespread manipulation of people than humanity has ever known before. Elected legislatures on this score can be as oppressive as any other type of rulers mankind has ever known.

19th century brought a dramatic increase in powers which human beings could directly exercise in relation to other human beings or the environment. The advance made in the field or science field technology were even more astounding. In short there was vast increase in power to manipulate'. The time-honoured prohibitions could now be discarded. The two World Wars and the economic manipulation that was resorted to, added to the self-confidence in this behalf and opened new vistas. One dangerous technique that was universally adopted was 'deficit finance'.

 DEFICIT FINANCING

 Deficit financing is now a major tool of Third World governments. It is through this technique that they collect covertly, often for the obstensible purpose of financing welfare. One direct result is the reduction of the value of people's savings and property. Quran has explicitly prohibited such concealed devouring of people's wealth (Q. 26.183). 

The process of printing currency, without having the counter-part guarantee of available goods, gives the government a temporarily enhanced purchasing power but soon enough prices rise to roughly equalise the money in circulation and the goods available against it. To obtain a hedge against reduction of savings, people feel impelled to invest for obtaining interest. There is a direct connection between debauching of a currency, speculation and disinclination to save, says Robert Moss in his book, The Collapse of Democracy (1977): 

But Weimar experience should have taught us something about how debauching of the currency has a profoundly corrupting effect on society as a whole and rewards speculation at the expense of productive investment. And of course you do not need to go back to Weimar to observe that recent economic policy in Britain which has fuelled inflation and clamped down punitive rates of taxation on productive business - has driven private capital into increasingly speculative forms of investment and punished and demoralized precisely those social groups that are traditionally most inclined to saving. (pp 78-79).

Dangerous dimensions are reached when governments willfully disregard the moral boundaries for political action and stake a society and its future to buy a few moments (half a year or a year in a nation's life can be so counted) of extra purchasing power secretly and without a vote from the people.

 Keynes had warned as far back in 1919 that:

 There is no subtler, nor surer, means of overturning the existing basis of society than to debauch the currency. The process engaged all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

(Economic Consequences of the Peace - by J.M. Keynes: (Macmillan), 1919 : p. 220).

 These warnings have gone largely unheeded. Most rulers have opted for socialist models. To finance the enlarged field of states' functions, they continued with the war-time high taxes and deficit-financing, asserting that a reasonable amount of inflation is a necessary price of rapid development. They would not go all the way with Lenin, who affirmed that the surest way to undermine capitalism was by debauching its currency, yet the cost-push of labour government’s policies, and the demand-pull of total or near-full employment set in motion an inflationary trend. The rest of the history is too recent to require retelling.

The Third World leadership had other pressing reasons for adopting socialist slogans and political techniques. They immediately provide them new and more effective tools for silencing or destroying political opponents by treating them as traitors and counter – revolutionary foreign agents and their proclaimed policies as treason; by carrying on relentless propaganda in the name of advancing socialist objective, but in reality for enhancing their own power for patronage. The story of the loss of human freedom and dignity in the Third World or even the Socialist World has been told so often that it needs no recounting. What is significant for the present purposes is that in opting for an Islamic economy, it is not merely the rules of sale and purchase, lending or borrowing but the very approach to economic activity which shall have to be radically altered.

 TAXATION 

Taxes are demanded for services rendered. Higher taxes would be justified if more services are rendered. According to Islamic constitutional theory, ruling agencies have a limited role to perform of aiding the individual but never of wholly substituting him. No government in the world can fulfill fully 'the promise of welfarism'. The financial needs of a welfare state are almost limitless. The resultant high taxes breed parasitism and wholesale corruption, on the one hand, and equally widespread evasion, on the other. The end product is, either oppressive state of the late Roman Empire type, or a corrupt state run under the sovereignty of black money over the white. Making an honest living or law-abiding living, becomes well high impossible. Thus the basic constitutional principles of an Islamic State are violated. This sets in motion the disintegrative feelings of insecurity. The Prophet of Allah (PBUH) is reported to have said 'that there is no community in which corruption becomes common hut will be overtaken (by) fear'.

In sum, an economy, free of oppression and usury, cannot be imposed over-night, and by a legal fiat. It requires meticulous planning, enormous will, and total cooperation within the Ummat. Each step in this direction will have to be wisely taken in accordance with the priorities set out by the Shariat and within the limits of our space-time situation. People should not be exposed at one go to carry impossible or backbreaking burdens. But the first step in any event shall have to be an intense exercise in devising an Islamic economic model (of course with provision for variables for socio-economic situation of each community within the Ummat in accordance with the Islamic political and social economic categories). High taxes, willed inflation, ill-conceived nationalization, and poor administration of laws are four major factors preventing movement towards zero rate of interest. Enlarging scope of intervention is not a remedy for inadequate guidance, poor control and ineffective administration in the fields already monopolized by the State. Putting the house in order in these fields would be a prerequisite for progress towards Islamic ideals.

 To become truly Islamic the cast of the welfare functions of the state shall have to undergo a revolutionary change. Today, the State, both in the welfare-oriented democratic world as well as the socialist world, has taken over the welfare duties by displacing the natural units of welfare, namely, the immediate family, the larger family of blood relations and the neighbourhood. The financial costs have been enormous, as the dismal story of American budget tells all too plainly, but the human costs have been even more astounding. Through mutual help, nature cements the bond of affection, of humaneness, of friendship, of voluntary sacrifice and of love. Without this cement, the bricks of claimed legal rights fall apart. People pick up the habit of counting what they are entitled to get and not what they are obliged to give. Official programmes operate without help of these factors.

 Quran seeks to bring 'security'

 (a)     through the family,

 (b)     through the blood relations,

(c)     through reinforced neighbourhood,

(d)     by securing the basic needs which often force a person to submit to an unfair deal with another,

(e)     by mandate prohibiting conspicuous spending,

(f)       by the guarantee of security provided by zakat,

(g)     through powerful public agencies to aid the weak by all manner of help when his rights are threatened or violated; or when opportunity is denied in dispute or in development,

(h)     by guaranteeing the repayment of debts.

For re-establishing or effectively re-enforcing institutions for the above objectives the priorities within the national development plans shall have to undergo large-scale changes. For instance to nurture and protect the family, the very design of town planning and of the housing within it shall have to change. It is a matter of no concern to today’s planners as to what the needs of the unit called 'the larger family' are. Today's 'home' is designed only for the nuclear family. It has no place for aged parents or widow sisters or widows of brothers and their children. Privacy so high ill the Quranic priorities (Q. 24.58-59) is a low priority in modern housing design.

 There is no room in housing policy to enable people to live near their relations and yet maintain their privacy. The old style 'haveli' or walled 'dew' used to house the whole of the larger family has disappeared from planning and designing of towns and cities. It was the larger family that provided the individual not only security but also company and entertainment. Above all a sense of belonging in a group which would genuinely appreciate his achievements. It also provided an insurance against the economic and other ups and downs an individual suffers in his lifetime; family was the secure retreat where joys and sorrows would be genuinely shared. Future friendships and many relationships arose out of this shared state of being united. The transmission of shared values is however also subject to some caveats. Under the joint family system as it is called the individuality of a person is constantly under pressure as also his freedom. Striking of new paths is not always easy when the retreat is so secure and fulfilling. Some times strong family ties encourage uncreative conservatism. The availability of many helpful hands often hampers enterprise. These are aspects which are to be discussed and thought about. But we notice, that be it private or public housing the interest of the family and co-related problems do not figure as an objective or value.

 In service of the government, in planning and providing of housing, in transfers of government servants, and in the very planning of schools, the family considerations do not figure. No one worries that as far as possible privacy and closeness of family members is a value to be served. The designing of housing has room only for the nuclear family, but hardly for any other member. Even close relations are not encouraged to live close to each other. For serving a needy relation no one is given any consideration. Even the entertainment as devised is not designed for the family as such. In fact in the official policy-making the family does not figure at all. The individuals count as mere numbers.

 The next important fence of protection beyond the nuclear and larger family is the neighbourhood. So important is the creation of bonds of mutual support between the neighbours, and so insistent was the Prophet (PBUH) about them, that some of his companions thought that it would not be long before the neighbours become heirs in each other's estates. It is apparent that in the making of laws and distribution of the rights and responsibilities within the community, the official policies do not coincide with the Islamic approach. There is a principle of Islamic law that if a crime is committed and remains undetected as regards its perpetrator, punishment by way of fine could be imposed on the whole neighbourhood; it was also provided that in case a person cannot pay the damages he causes to another, his near ones could be compelled to contribute under the principle of Aqila. We have come so far from the origins of this principle of liability that Government of Pakistan's attempt at re-introducing this principle in the law of diyat has met with considerable resistance. It is noteworthy to read support for the idea of the responsibility of the kin in regard to the behaviour of an individual in recent times. Says H.J. Berman in his seminal work "Law and Revolution" (Harvard, 1983) at p. 55.

 "The institution of fixed monetary sanctions payable by the kin of the wrongdoer to the kin of the victim was a prominent feature of the law of all the peoples of Europe prior to the twelfth century, and indeed of every. Indo-European people at some stage of its development, including the peoples of India, Israel, Greece, and Rome..........

 It is, in many respects, a very sensible system. The threat of heavy financial burdens upon the wrongdoer and his kin is probably a more effective deterrent of crime than the threat of capital punishment or corporal mutilation (which succeeded pecuniary sanctions in Europe in the twelfth and thirteenth centuries), and at least equally as effective as the modem sanction of imprisonment; and it is surely less expensive for society. Moreover, in terms of retributive justice, not only is the wrongdoer made to suffer, but in addition - in contrast to today's more "civilized" penology - - the victim is thereby made whole".

 Considerable collective social effort will become necessary if the ideas of kin and of neighbourhood is to receive the pre-eminence they have in Islamic social values. Official funding will have to be channeled in this direction to obtain results.

 One feature of the contemporary society which encourages withdrawal of both the rich and the poor, from sharing each others woes and enjoyment of company and cultural activity in common in the absence of any restraints on conspicuous spending. In one and the same neighbourhood people proclaim their success in public life by extensive acquisition and use of status symbols. Soon enough the rich drift in to the company of the rich ones, and the poor retreat towards poor sharing oppressive envious anger. Quran has characterized display and wealth as rebellion against the community. The Prophet (PBUH) was most insistent that people acquire habits of frugality and simplicity.

 Laws could easily be made and effectively enforced to remove from public view the offensive status symbol. For example restrictions could be placed on the size and external decor of houses. Same type of transport could by law be made available for all private use. For instance- one or two makes of cars should be available for travel to all who desire to maintain private transport. The present practice of superior category of transport becoming available on payment of higher duty, to be shown off as a status symbol could be avoided. Similarly restriction could be placed on display of expensive and flashy apparel in public.

A few simple but decisive steps in this direction could effectively remove major causes of envy and corruption which go a long way in causing distortions in social life and destroying unity within the Ummah. The social security system of Islam would require to be enforced by reaching all sources of revenue in this behalf.

 The present system of imposing Zakat on only a few items would require to be changed. Security of basic needs and simplicity in public life would re-enforce each other.

 The judicial process itself would need to be made the highest priority in national planning in specific Islamic terms. Genuinely powerful institutions will have to be created and existing restrictions removed. It is only with an effort to establish such a framework that one could confidently proceed to attempt turning the Islamic promise of plenitude for all in a moral society, into a reality (Q. 14.34).

 ZERO RATE OF INTEREST

 The making and enforcing of plans to promote the above objectives should lead the Ummah towards achieving zero rate of interest in making available of the capital. For this purpose the State's fiscal and monetary policies shall also have to be drastically revised. The thrust of Islamic teachings in the field seems to be towards lowering of prices through greater production of goods and free competitive production and trading. Monopolies, cartels and hedging impose excessive prices or unconscionable bargains or introduce an element of wagering in business transactions. All these ways of doing business are prohibited. There are clear verses in the Quran prohibiting gambling and many Ahadith related from the Prophet (PBUH) prohibiting transactions in which one or the other party stood to make an undeserved gain or loss (Bukhari Kitab Al Buyoo).

Islam takes certain positive measures and some negative measures to assure progress towards the ideal of making capital available at zero rate of interest. But, before proceeding to identify these measures in one composite picture, it is necessary to mention the factors which give birth to an interest-oriented economy. It is claimed that interest serves the economy by causing increase in available credit which, in turn, aids growth. Besides, at the individual level, people reconcile, nay, prefer interest-oriented economy for several other reasons also. These are:

 1.       Capital has a scarcity value and most people are willing to pay for obtaining its use. Greater the sovereignty of wealth, greater would be its attraction, and more assiduously would people work to acquire it.

2.       People like to enhance their purchasing power, inter alia, to enjoy the new dimensions at which money can buy pleasure and luxury. This factor, along with the above factors, easily motivates people to share some of their earnings to obtain capital and those with capital (savings) to lend it on interest.

3.       Absence of orderly and productive channeling of savings adds to the scarcity value of capital.

4.       The existing interest-oriented economies constantly push up the prices and, therefore, threaten overt or covert diminishing of the value of savings for those who would normally feel satisfied with their savings, if only they could retain their purchasing power.

5.       The ease with which lending on promise of sharing the produce of some one's labour takes place, seems to blind most eyes to the basic evils of this practice.

6.       The planned and willed deficit financing feeds inflation and reduces the buying capacity or the exchange value of the savings.

7.       The high income taxes, notwithstanding official claims to the contrary, genuinely bite into the savings.

8.       Governmental policies in the field of 'welfarism' and public sector investments cause a worldwide thirst for higher taxes, with each government justifying its current and constantly enhancing rates of taxes by reference to its neighbours and to the misdeeds of the Oil Sheikhs in so far as they constantly seek raising price of the crude.

9.       The relentless pressure exercised by labour costs, which almost internationally have been disassociated from productivity, and have become a by-product of the political clout of labour parties.

10.   The last-mentioned four factors generate a sense of grave insecurity. Combined with the high-speed imported inflation it creates a mood of fear and frenzy to literally destroy in people's minds the difference between the legitimate and the illegitimate in business dealings.

11.   Interest factor and deficit financing, by a dialectical process, make themselves acceptable, inter alia, as a mode of regulating the economy or for reviving up its performance.

CONCEPT OF WEALTH

 Each one of these factors needs analysis and correct identification in terms of Quranic categories, because Quranic resolution of aspects of these problems is not in purely economic terms. At the root of all the above distortions is the secret and unacknowledged commitment of the majority to the sovereignty of money, and its capacity to cross all hurdles, and to buy its way to security, status, glory, comfort and luxury. Wealth simpliciter enjoy great many powers, immunities and privileges. It escapes most punishments, and the unnecessary harassment and denial of opportunity which is the lot of ordinary mortals. Quran, however, explicitly downgrades wealth, so far as its status creating capacity is concerned. Status must, according to Quran, go to those with moral superiority (Q. 49. 13), capacity and knowledge (Q.2.247) and positive performance (Q. 57.10). Wealth is, according to Quran, a capability amongst others and a trust, and therefore, a source of trial. Quran gives some explicit guidance in this behalf. Some of these principles we have already noticed. Before we deal with the methodology by which Islamic principles secure availability of capital at all times, the above-enumerated factors be dealt with first.

 1.       Scarcity value of the capital arises because those who have savings find it advantageous to withhold it and feel themselves under no obligation to put these savings into circulation. If the Quranic economic principles are enforced through appropriate policies, hoarding of wealth will not remain viable or even attractive. Quran regulates the earning, the retaining, and the spending of wealth. No operation in the economic field is outside its legal or normative reach. 

2.       Another major temptation for mankind in their mad race for acquisition of wealth has been the dream about its capacity to provide unlimited pleasures, the enjoyment whereof, according to many, is the sole object of one's existence. Quran rejects the dream as well as the consequential objective. Wallowing in conspicuous luxury is sinful. Exultant display of wealth is even worse (Q. 26.79). Adopting a lifestyle of luxurious and exhibitionist living, in disregard of other people's sensitivities, is prohibited. In Quran's definition of 'good-life' pursuit of luxury simpliciter is not apriority, because it tends to benumb a person morally, and increase pre-occupation with what is purely physical and animal. Another reason for the mad race is the mutual competition in collecting wealth simpliciter. Collecting wealth as an objective of life, Quran rejects outright. It equally firmly rejects the objective of display of wealth, and recounts it as a major sin of Korah (Qaroon) (Q. 20, 76, 80). Policies and plans against conspicuous spending could be legitimately devised and enforced.

3.       Sovereignty of wealth enables the holder of capital to bargain from a position of strength because time does not consume capital, it consumes the capacity to work. Absence of proper channeling of savings works great hardship on those who remain in the market only on the basis of their capacity to work. Finding ways and means of using capital (savings), without loss of purchasing power of one to whom the savings belong but does not need for immediate consumption, is a creative path open to Muslim economists. There is a yet larger field awaiting serious attention. Islam with equal firmness insists that wealth be acquired only lawfully i.e. by such means that do not involve fraud or gambling, force or coercion or interest. These principles would effect, if not invalidate, a very large number of business or production practices which make the leading contemporary economic systems exploitative in character. It is in this sector that we need to discover ways and means to restore the balance of mutual benefit in the deals between the bargaining parties. Today's business deals are generally tainted because each party seeks the maximum advantage by taking advantage of every weakness in the opposite number's armoury. By deceptive advertisement, pressurising sales talk, monopoly or cartel situation, unfair competition, inflicted prices on captive consumers, taking advantage of immediate financial needs of the other party, a great deal of business is transacted which is patently illegal or immoral by Islamic standards. There is room for considerable reform in this field which could be brought about by legislation to compensate the suffering party through judicial intervention. Such legislation would amount to valid exercise of legislative power within the Islamic framework.

4.       There is no place in Islamic law for neither post facto validation of illegal acts by legislation nor is post facto purification or sanctification of ill-gotten wealth possible. Laws have to be redesigned to eradicate this great source of political corruption and temptation. Such laws could be designed to avoid technical defenses, and to place the burden of proof on one who appears to be in possession of prima facie ill-gotten gains.

However, a great deal of research must precede fresh legislation in this field to avoid making available a law for victimization and settling of political scores. Violation must be of the Shariat to attract application of such law.

5.       In between the producers and consumers, several other persons and agencies intervene to collect a share not in proportion to what services they render, but the disruption or loss or discomfort they can cause. Innumerable regulations and regulatory agencies give rise to equal or larger number of brokers who guide people in the art of avoidance. A larger part of the price a consumer pays goes to these parasites--not by choice but due to the corrupt system. Price, according to Islam, is for goods provided or for services rendered. In the making of regulations for governance of society, complexity is justified only if it leads to more efficiency. It has an inherent capacity to become, in the hands of a corrupt bureaucracy, a tool of great exploitation. 

6.       Committed to welfare programmes, and called upon to share its revenues with many partners in administration, modern Third World states, constantly plagued by large-scale leakages in the process of collection, prescribe heavy and burdensome tax rates. Coupled with lax administration of law, evasion of taxes becomes a very promising and prosperous business for, the daring and the dishonest. Those who evade taxes soon become rich enough to seriously think about building up defenses and castles of their wealth. They soon learn to enter into alliances with bureaucracy, which is often only too keen to convert power into wealth. They learn to control the bureaucracy through other means also. They also control the market by underselling the competitors or through many other legal and illegal ways. They set market prices which automatically drive out tax-paying businessmen from that business. By unholy alliances with corrupt elements in the bureaucracy, they hound the honest competitors out of the market. The field is left open for direct evasion and for moneymaking for lack of competition. Soon enough, the sovereignty of black money over white money becomes absolute. The problem of taxation needs to be studied as a source of several distortions brought about in the economy, which make journey towards zero rate of interest well high impossible.

7.       The contemporary practice of deficit financing by State's fiat is in clear contradiction of the Quranic injunction against 'diminishing of value of people's things' (Q.7.85; 11.85). It amounts to taking of property without consent or compensation and such t     king is, when effected through deficit financing, not always justifiable according to the stringent standards set out in Shariat. Deficit financing is a well-known cause of inflation and history gives several examples of great civilizations, cities and states perishing on its account. The Roman Empire, the Abbasid Empire, the Turkish Empire, the kingdoms of Genoa and Venice are but a few examples from history. Weimer Republic, Austrian Empire, and many South American states are the modem examples. Diminishing of value of people's things was one of the sins which, according to Quran, brought God's punishment of people of Prophet Shoaib (Q.11.84).

8.       As stated earlier, some business practices though essentially oppressive in character have remained operational so long that they have come to be counted as necessary conditions of doing business. Borrowing, on interest to do business is one such practice. Even when practised with great honesty and scruples, it introduces 'inflation' factor in the economy, and race of rising prices becomes inevitable unless some other major factors intervene. Simultaneously with the command to give fair measure, Quran insists that 'Value of things be not diminished'. Inflation precisely does this. Finding ways and means of stopping inflation should be a first priority.

9.       Yet another factor for which interest is demanded, and the borrower yields to the demands is obtaining time for repayment. Some argue that the very fact that the lender gives time to the borrower means that .he sacrifices his own enjoyment for the time being to provide enjoyment to another, and therefore, he can legitimately seek some benefit. Quran explicitly forbids taking interest for extending period of repayment (Q.278-80). A recalcitrant borrower who does not repay in spite of having capacity to do so, may be forced to repay immediately or might even be punished by appropriate law but the door of obtaining a benefit for extension of time remains firmly closed. Believers are commanded that should a borrower genuinely find it difficult to repay, the time should be extended till he can repay (2.278-80). Laws and judicial institutions for recovery of loans need to be modernized, vitalized and re-constituted to be able to serve the objectives of Shariat.

10.   Deficit financing, high taxes, rising cost of labour, and welfare are interrelated problems, each fact feeding the other. They must, therefore, be dealt with together.

11.   Quran also makes it clear that within the Ummat status and power should go to those with superior moral performance (Q.49.13) or with greater capacity and knowledge (Q.2.247). The Ummat, by this mandate, is placed under an obligation to seek out and vest authority in those who possess these two qualifications. The election laws insofar as they deal with candidature and voting must reflect these directions. In emphasizing a rule of law within the Ummat, in making protection of human rights the main objective of exercise of political power, in making obedience to public authorities' commands subject to their being in consonance with the Shariat, and in making all actions of ruling agencies subject to judicial review, Quran provides an indestructible fortress of security around each individual. All the above values must be reflected in our constitutional framework.

ALTERNATIVES TO TAXATION

A question may finally be raised as to where will funds come from if the present system of taxation is to be discarded. In answer it is submitted: 

Quran ordains that savings (wealth) not in use must be available for use by others; and no gain be desired by the owner of this wealth if he is himself not using it. Therefore, so long as it is assured that one who has saved shall get back what he has saved (and not paper currency of same denominational value with a constantly eroding purchasing power), he should have no cause for complaint. 

Of the several possible methods of lawful use of these savings that are available, some relevant ones might be considered:

 i.         A person may himself expand his business venture by reinvesting his savings. Such conduct would be wholly free from blame, because more business would mean more goods, services or jobs. Such socio-economic framework is essential for maintaining competitive prices and purchasing power of money at a constant or near-constant level. Enlarging field of employment along with the above-mentioned factors can take care of enlarging population. 

ii.       If a. person does not decide to invest in his own project, he can take a partner and invest in partnership. This manner of using savings would also be wholly legitimate, leading to the same or similar benefits that we have referred to above.

iii.      A third form of investment would be to lend the savings to another without interest but on secured return. If the currency is subject to inflation or deflation, parties would have to provide return at a constant value, i.e. value or purchasing power (if it is a currency loan) as on the date of loan. In a truly Islamic state, the State would find ways and means to guarantee return of loans, given for legitimate business. In case of delay the State could through some form of insurance provide bridge financing to the lender. All loan agreements, whatever their value, are under Quranic injunction compulsory to be written (2.282); They can he made registrable if state guarantee is to be availed of.

iv.      A fourth form would be mandatory deposit of savings with national investment trusts, with guaranteed return re-assured by the State, with no interest, but with contemporary purchasing power of the loan duly guaranteed. Motivation for this purpose could be provided by imposition of a declining rate of tax on those who deposit more as also for longer periods. The national savings institutions could, in turn, invest these savings by all legitimate means available to them, but subject to the same condition that unused savings will remain with the saving institutions and all earnings shall likewise be deposited with the very same institutions. In other words, all individual savings at any given moment would be socially available for further utilization.

By this process, the savings institutions would make considerable profits which, in turn, would become available for all manner of\ social and other services. Faster the movement of wealth in this fashion, greater would be the savings and surpluses available to individuals and these institutions. The savings of these institutions could become a source of capital formation or spending by State for performance of its explicitly stated welfare and other duties. Neither interest nor dividends would be paid to any individuals as modern banks do. Therefore, the funds of such institutions will progressively substitute taxation even. To this extent the tax burden of individuals should continue declining, without reducing available funds in the hands of the Government.

*Mr. Khalid M. Ishaque is a leading lawyer and an eminent scholar. He is well-known in Pakistan and aboard as a prolific writer and speaker on Islamic subjects.