ISLAMIC ECONOMIC MODEL AND THE PROBLEMS OF ITS APPLICATION IN RUSSIA
Abstract
The world’s first Islamic bank, Mit Gamr Bank, was set up in 1963 in a place called Mit Gamr in Egypt. The bank, which functioned on the interest-free principle, marked the beginning of practical implementation of Muslim economic theories. At the same time, a Savings Corporation for Muslim Pilgrims (Tabung Hajji) was founded in Malaysia to help accumulate funds for hajj1 in accordance with the Muslim laws.2 In 1965, a Cooperative Investment and Financial Corporation appeared in Karachi (Pakistan). Simultaneously, several similar institutions which can be described as savings investment structures rather than commercial banks appeared in Egypt. On the whole, however, the experiment failed; very soon most of the institutions which sprang up haphazardly at the grassroots level in all corners of the Muslim East folded.
The second wave of attempts at translating the Islamic economic ideas into practice under traditional (non-Muslim) economic conditions proved more successful. In 1975, the Dubai Islamic Bank began operating in the UAE, while the Organization of the Islamic Conference opened the Islamic Development Bank (IDB) with the intention of coordinating economic and social development of the Muslim communities throughout the world. In 1979, the world’s first Islamic insurance company was set up in Sudan. In some Muslim states, the faithful acquired the chance of paying zakat and ‘ushr (tithe) in a centralized way. Pakistan went as far as adopting a special law, the Zakat and ‘Ushr Ordinance, in 1980 to regulate the collection and distribution of taxes.
Today, most countries with large Muslim communities have all sorts of institutions working on the basis of the Shari's. Russia is no exception.
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References
Here and elsewhere, I shall give the more correct, rather than more frequent, spelling of the Arabic word (hajj)with the exception of the names of official organizations, article titles, etc.
For more details on the history and present state of Tabung Hajji, see: M.A. Manan, Islamic Socioeconomic Insti-tutions and Mobilization of Resources with Special Reference to Hall Management Fund of Malaysia, Jeddah, 1997.
A.Iu. Zhuravlev, “Printsipy funktsionirovania islamskikh bankov,” in: Islamskie finansy v sovremennom mire: eko-nomicheskie i pravovye aspekty, ed. by R.I. Bekkin, Moscow, 2004, p. 91.
A. Djabiev, “Perspektivy primenenia printsipov islamskoy ekonomiki v khoziaistvennoy deiatel’nosti sub’ektov v ramkakh zakonodatel’stva RF,” in: Islamskie finansovye otnoshenia i perspektivy ikh osushchestvlenia v rossiyskom musul’manskom soobshchestve, Moscow, 2004, pp. 40-41.
Any Islamic financial organization has a Shari‘a Supervisory Council set up to assess the new products (services)of a bank (company) and their operations from the viewpoint of Muslim law. The Shari‘a Supervisory Council of the Badr Forte Bank is headed by a prominent Muslim theologian, Zaki Badavi.
See: A.Iu. Zhuravlev, op. cit., pp. 91-92.
Its central office and the only branch, called Studencheskoe, are found in Moscow.
A.-K. Chernienko, “Islamskaia bankovskaia systema,” in: Islamskie finansovye otnoshenia i perspektivy ikh osu-shchestvlenia v rossiyskom musul’manskom soobshchestve, p. 116.
See: A.Iu. Zhuravlev, “Finansisty, chtiashchie Koran,” Otechestvennye zapiski, No. 5, 2003 [www.strana-oz.ru].
See: R. Gataullin, “O vozmozhnosti sozdaniia svobodno-ekonomicheskoy zony standarta ‘khalial’,” in: Islamskie finansovye otnoshenia i perspektivy ikh osushchestvlenia v rossiyskom musul’manskom soobshchestve, p. 31.
See: “Iz Tatarstana v haj otpravilas pervaia gruppa palomnikov,” Novosti Povolzh’ia, 30 December, 2004 [www.interfax.ru].
Judging by certain information, the company’s tourist services are of a higher quality than those offered by cer-tain other tourist companies working with Muslim pilgrims in Russia (see, for example: Protokol zasedania Soveta po haju ot 6 aprelia 2004 g. [www.government.ru]).
See: “‘Idel-Haj’ DUM RT pomozhet plemianniku Nazarbaeva v razrabotke sistemy nakopitel’nogo strakhova-nia v sootvetstvii s normami shariata” [www.tatar-inform.ru]; R. Kashapov, “K uslugam musul’manskikh palomnikov,”Obshchestvo, No. 179 (24735), 6 September, 2002 [www.rt-online.ru]; and others.
Later, in November 2004, at the seminar on the “Islamic Economic Model: Prospects for Its Realization in Mus-lim and Non-Muslim Communities,” Deputy SAM RT Chairman Valiulla Iakupov, who represented SAM RT as one of the program’s partner, confirmed in a private talk with me that the savings services were still not operating.
It cannot be said that the Russian laws completely rule out the possibility of Islamic insurance in the commer-cial form. According to investigations made by the Administration of Islamic Insurance of Itil, Islamic mechanisms of the savings insurance type can be used without violations of Russia’s insurance laws. This activity, however, will be effective and corresponding to the Shari‘a only if carried out on the basis of another, preferably Islamic, large insurance company or bank.
See: “V Kazani zavershilas VII Vserossiyskaia konferentsia rukovoditeley dukhovnykh upravleniy musul’man”
www.portal-credo.ru].
See: R. Salikhov, “Kak vozrodit blagotvoritel’nost?” Tatarskiy mir, No. 1 (54), February 2005, p. 3.
See: “Waqf,” in: Islam na evropeyskom Vostoke: Entsiklopedicheskiy slovar, ed. by R.A. Nabiev, Kazan, 2004,p. 49.
It seems that in Russia today the Muslim clergy does not object to usury operations when administering waqf. The draft amendments to the Law on the Freedom of Conscience and Religious Associations offered by the SAM RT and re-lated to waqf property said, in part: “Waqf can include any property, be it a plot of land, building, structure, or other real estate , the right to use any securities, as well as jewelry, books, and other movable property in the Republic of Tatarstan and outside it” (Dokumental’nye materialy o deiatel’nosti Dukhovnogo upravlenia musul’man Respubliki Tatarstan v pe-riod s 14.02.1998 po 14.02.1999, Kazan, 1999, p. 20). The fact that all types of securities are related to property that can be transferred to waqf violates the Koranic ban on usury.
See: M. Kemper, “Musul’manskaia etika i ‘dukh kapitalizma’,” in: Islamskie financy v sovremennom mire: eko-nomicheskie i pravovye aspekty, p. 41.
When summing up the results, those who took part in the seminar “Waqf and Its Prospects in Russia Today” rec-ommended that the Council of the Muftis of Russia set up, together with the IDB and the General Secretariat of the Waqfs of Kuwait, a work group to study whether the principles of waqf property can be adjusted to Russia’s legislation, as well as render assistance, methodologically and organizationally, to create a single register of waqfs in Tatarstan. The seminal participants asked the same organizations to identify jointly with the Academy of Sciences of the Republic of Tatarstan the lost historical waqfs in Tatarstan in order to return them to the Muslims in the future (based on the materials of Portal-Credo.ru).
See: Obzor Daghestanskoy oblasti za 1913 g., Temir-Khan-Shura, 1915, p. 6. Quoted from: V.O. Bobrobvnikov,
Waqf v Daghestane: iz vcherashnego dnia v zavtrashniy?” Islam i pravo v Rossii, Issue 2, Moscow, 2004, p. 156. In the Ottoman Empire, for example, about one-third of all lands belonged to the waqf category.
See: V.O. Bobrovnikov, op. cit., pp. 163-164.
See: Ibid., p. 165.
See: Ibid., p. 162.
See: Lecture delivered by Dr. Ashraf al-Amawi, in: Ekonomicheskoe i finansovoe upravlenie musul’manskimi re-ligioznymi organizatsiiami: realii i perspektivy, Moscow, 2001, p. 76.
The first zakat calculator in Russian can be found at [www.Takafol.ru]. For more details about the site see below.
For more detail, see: A.D. Larionov, D.A. Al-Sharayrekh, “Islamskaia model bukhgalterskogo ucheta,” in: Islamskie finansy v sovremennom mire: ekonomicheskie i pravovye aspekty, pp. 214-232.
See: V.O. Bobrovnikov, “Islamskiy renessans,” NG-Religii, No. 10 (140), 2 June, 2004 [www.religion.ng.ru].
See: Report by Deputy Director of the Islamic Research and Training Institute Fedad Layashi, in: Ekonomicheskoe i finansovoe upravlenie musul’manskimi religioznymi organizatsiiami: realii i perspektivy, p. 83.
See: M. Zalialetdinov, “Razvitie sistemy waqufov v Rossii,” in: Islamskie finansovye otnoshenia i perspektivy ikh osushchestvlenia v rossiyskom musul’manskom soobshchestve, p. 69.
See: A.A. Iarlykapov, “Religioznoe povedenie,” in: Islam i pravo v Rossii, Issue 3, Moscow, 2004, p. 58.
See: A.N. Kozyrin, “Izuchenie i prepodavanie islamskikh finansov v svetskikh vysshikh uchebnykh zavedeni-iakh,” in: Islamskie finansovye otnoshenia i perspektivy ikh osushchestvlenia v rossiyskom musul’manskom soobshchestve,p. 72.
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