The Role of Islamic Finance in Achieving SDGs

The Role of Islamic Finance in Achieving SDGs

Dr. Mohammad Mohiuddin

 

Introduction:

The Sustainable Development Goals (SDGs) as successor to Millennium Development Goals (MDGs) represent to foster a comprehensive development including human development, economic development and environmental sustainability. The objectives of Sharia’h are also meant for that. The Holy Quran and Prophetic practices encourage to ensure a comprehensive development on all aspects for the well-being of human being and earth. The Islamic Finance aims to actualize the objectives of Shariah. The Islamic finance has a vital role to achieve the SDGs undoubtedly.

Human creation by Allah SWT as the main source of development

We know that humans were created by Allah SWT from clay and breathed the spirit of life into them. Allah distinguished the humans by giving three divine gifts: intelligence or reasoning power to distinguish the true from the false, a will that can freely choose between them, and the power of speech to worship. So, humans are the main source for all types of developments.

The policies of the development that focuses on humans

The humans are the caliphs of Allah SWT, and the duties of humans to fulfil the objectives of Islamic Shariah on earth. Based on Shariah, humans must work to realize the welfare of human and earth, to research in all creations to realize the universal truth of existence of Allah, and to work for the development of humans and the world.

Protecting the legal freedom and individual liberty & rights

Islam has a strong message for all that it protects the freedom and rights of all. The Qur’an, while enumerating the main functions of the nation, says:

الَّذِيۡنَ اِنۡ مَّكَّنّٰهُمۡ فِى الۡاَرۡضِ اَقَامُوا الصَّلٰوةَ وَاٰتَوُا الزَّكٰوةَ وَاَمَرُوۡا بِالۡمَعۡرُوۡفِ وَنَهَوۡا عَنِ الۡمُنۡكَرِ​ ؕ وَلِلّٰهِ عَاقِبَةُ الۡاُمُوۡرِ‏. (الحج: ٤١).

“Those who, if We establish them in the land, observe worship, and pay the poor-due and enjoin good and forbid evil”

The Islamic Law provides freedom of expression as one of the fundamental rights of the citizen that a nation must respect. Then, it is also the duty of the nation to see that no citizen remains unattended with respect to the basic necessities of life, via, food, clothing, shelter, medical aid and education. In this perspective, the Holy Prophet (PBUH) said:

“The government is the guardian of those who have no guardian.” (Sahih Muslim).

Providing the Needs of the individuals

Islam always offers people’s needs such education, jobs, and all the basic needs of the people. In this cases related to well-being, the definition of the concept of welfare then is very complex. However, according to Qur’an , there are at least four major indicators of welfare.

The Islamic value system, economic power in the real sector (industry and trade), fulfilment of basic needs and distribution systems, as well as social security order.

The basis of prosperity is when the teachings of Islam became guidance in the economic life of a nation. The true prosperity can never be achieved through a rebellion against the rule of Allah SWT. This opposition became a source of losing prosperity and blessing to human life.

وَمَنۡ اَعۡرَضَ عَنۡ ذِكۡرِىۡ فَاِنَّ لَـهٗ مَعِيۡشَةً ضَنۡكًا وَّنَحۡشُرُهٗ يَوۡمَ الۡقِيٰمَةِ اَعۡمٰى‏. (طه: ١٢٤)

“But whosoever turns away from this Admonition from Me shall have a straitened life; We shall raise him blind on the Day of Resurrection”

Prospering the nation and developing its wealth

Islamic financial system is always rich with its business methods and culture. The Prophet Muhammad said:

“Verily, the best of income is the income of traders, when speaking not lie, when given the Amanah not treacherous, when promised not deny it, when buying not denounce, when selling not excessive (in raising prices), when owe not procrastinate, when collect (a repayment) not aggravate those who in trouble” (Baihaqi.)”

The Prophetic practices give us a guidance on how business culture must be developed. Of course it has some fundamental ethics including commitment, trust and honesty.

Conclusion:

The concept of Tawheed, Khilafah and Akhirah govern the Islamic system. A Muslim follows the divine law provided by Allah SWT which guides him to trust in oneness of Allah. This concept governs a Muslim to think that there is no difference between humans and all the people have the same rights to be facilitated. The development of humans, economy and the environmental sustainability is depends of the concept of Islamic value system and ethics. And this is the objective of Shariah to be achieved. The importance of wealth and how to manage that are also the part of Islamic financial system. This is why The Holy al Quran and Prophet PBUH mentioned a very comprehensive method for the planning of wealth management of the use of the wealth.