New Economic Framework Based on Islamic Principle

Meta Ose Ginting | CRCS | Wednesday Forum Report

Akhmad Akbar Susamto, © CRCS Web

Akhmad Akbar Susamto, active lecturer in in the Graduate School of Universitas Gadjah Mada (UGM) started his presentation in Wednesday Forum about Islamic and Western economics by explaining the background behind the academic discipline of Islamic economics. Islamic economics has been developed based on a belief that Islam’s worldview differs from that of Western capitalism. Islamic economics has its own perspectives and values related to how decisions are made.  According to Susanto, the boundaries of Islamic economics as a social science or a discipline are closer to economics than to theology or to fiqh.

There is a strong impression telling that Islamic economics is in complete opposition with the Western conventional economics. Susanto argued that such an impression is wrong: although the Islamic worldview does differ from the worldview of Western capitalism, Islamic economics as an academic discipline was established to realize the Islamic worldview and can stand together with conventional economics established in the West.  Each can benefit from the other.

Susanto introduced a new framework for Islamic economic analysis that lays a foundation for the complementarity between Islamic and conventional or Western economics. This new framework can resolve the dilemma faced by Muslim economists and help to establish Islamic academic disciplines alongside their Western peers.

This new framework introduced by UGM economists to define the scope and methodology of Islamic economics. It is called the Bulak Sumur framework. The name is taken from the name of the place where UGM is located. Based on the framework, an economy can be considered Islamic as long as it constitutes visions and methods which are consistent with Islamic worldview and it is able to help and guide societies to transform their economy towards the achievement of welfare as Islamic worldview dictates. To be Islamic  requires not only separating the sacred and profane but being able to depict both the current state and the ideal state. Thus, the Bulaksumur Framework includes:

  1. The scope: the explanation of ideal behavior, the impact to the economic and society
  2. Evaluation of the actual behavior (the different in the field?)
  3. Comparison of the two
  4. Prescription to bring the actual behavior based on the issue

For example, corruption. Ideally, corruption is forbidden or haram. But there is still corruption. As a result, Islamic economics looks for the reasons and motives behind this phenomenon and then gives suggestion to solve the problem. The framework make it possible to talk about more than just zakat and other well-known Islamic economic practices. We can talk about social problems too and making a continual prescription to solve the problem.

There are some minority perspectives which see economics as normative, addressing what we should do and shouldn’t do.

By using the data, the intersection of conventional and Islamic economic perspective analyze and decide what to do. They are the same but complete each other; the spirit complete each other. For Islamic economics, to explain why we can’t do this or do that, they need to borrow the data from the conventional economics, so that the reasons can be clear. 

In this session, some fascinating questions rose up from the audience. Ly from ICRS asked about the framework. For her, the framework showing that it is an analysis from the expert but how to apply that to the common people in their daily life? Is it a value or a system or tools to analyze something? How does the framework work to individual? Susanto then explained that Islamic economics can be understood in different ways. Here, he emphasized that it is a discipline. Meaning it is a tool to analyze how the society managed their economics where it included some system of belief and values. From Islam itself, it is a way to answer the way they produce and consume things in the sense of traditional economics. So, it is more about a tool with different conclusion from different society. Another question asked about whether Islamic economics is exclusive for the Muslim or could be perceived as a universal economic system? Susanto answered with an example of riba or interest. It can be used for any society and the issue could be found in any society too. If we combine with the concept of sustainability, the concept of riba is universal and can be adopted by any society. The presence of riba is about behavior so everyone can refer to it. The teaching could be for everyone but it will give a different conclusion and again different reflection and evaluation.


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