Principles of Islamic banking and finance/PIBF201/Islamic economic environment/Video signpost
In this video, Dr. Shamim Siddiqui from Hamdan Bin Mohamed Smart University, provides an overview and contextual background of Islamic economic environment.
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Video transcript
The financial sector of an economy is supposed to support the underlying economic system. As an Islamic economic system allows private property and appreciates the role of markets in determining prices in different markets, many Muslim economists find the basic principles of an Islamic economic system relatively closer to capitalism compared to one based on socialist ideals. It is, however, important to note that an Islamic economic and its financial system must be in line with Islamic teachings. The basic objectives and goals of an Islamic economic system are distributive justice, fairness and fostering Islamically desirable behavior among people. These objectives, however, must be achieved without unnecessarily sacrificing economic efficiency. Islamic financial system, apart from avoiding financial dealings that involve prohibited elements, it also contribute in achieving the goals and objectives on an Islamic economic system. In this section the fundamentals of an Islamic economic system are discussed to show how it differs from those of capitalism or socialism.
