Islamic Economic Thought of Umar Chapra and Falah is The Main Goal

by: Abna Haniif Novel

FIAI Student of Islamic Economics, Islamic University of Indonesia

Economics is an integral part of life. The process happens in terms of exchange with specific agreements create a system that then we call the economic transactions. The transaction is nothing but an attempt to make ends meet. The actions of individuals in the economy in particular, as well as actions in other areas in general, are very dependent on the mindset and view of nature (worldview) of the individual. Then Islam as a religion that Universal has set up and provide the correct pattern of action in running life, whether social, cultural, and economic. However, the world community today has been poisoned by Western capitalist worldview, and imperialist. Not many understand the concept of Islamic life and not many of them have an Islamic worldview

The discourse on welfare is one of the discussions in economics that has been a concern for all countries in the world. By raising the issue of welfare, a government can legitimize power. It is likened to a 'give bread' to the community, so that they are silent and submit to the government. In addition to the pragmatic purposes, the appointment welfare issues also represent a moral dimension that the government pay attention to his people. In this regard, the United Nations with his UNDP formulating public welfare measure, the so-called Human Development Index. Among the indicators of well-being according to this index, among others, per capita income, long life span and level of education achieved. In addition to the size of the UNDP, there are many other measuring devices, such as the Prosperity Index, Quality of LifeIndex, Public Welfare Index (Pledge), and so forth. Here we see that the issue of the welfare of an issue to be widely studied around the world.

But behind it all, it was the understanding of well-being that is often understood in western economies have flaws. Welfare is often used as a benchmark is the welfare laden with elements of materialism and hedonism without the slightest attention to the religious element. It is shown from the majority-or even all-indicators of well-being which did not include aspects of diversity, and only made the mundane aspects as its main benchmark. This weakness shown by the phenomenon of the comforts of life in the world. Norway, a country that according to the HDI index is the country's most prosperous, has a suicide rate is quite high, at 28 people per 100,000 inhabitants. When compared with Egypt which ranks only 112th in the HDI, the rate of suicide is only 0.1 100,000 inhabitants. Here we see that in countries with a Muslim majority population, even with a low HDI level, people prefer to enjoy a happy and prosperous life in the world. They enjoyed the 'welfare' of their own without drifting materialism. This shows that Islam has a more precise understanding rather than an understanding of emerging from the west.

Umar Chapra:Islamic Economic Thought

Umer Chapra has a gait that does little in the world of Islamic economics. He said the purpose of the economically is to help people to realize their duties as a vicegerent on earth. Not difficult to find a book that is the fruit of thinking. Some thoughts famous is the concept hayyatan thayyibatan, monetary policy concept in Islam, and the concept of Islamic banking.

Chapra also explains the concept actualization falah and hayat thoyyibatan which is the core of the economic challenges for Muslim countries. Because these two concepts derived from Islam, Islam is taught and should be applied in a Muslim's life-world realize happiness hereafter. This requires an increase in morale, brotherhood and socio-economic justice, with resource-utilization of scarce resources to alleviate poverty, to meet the needs and minimize the inequalities of income and wealth.

Then Chapra offers three strategies for the solution of economic problems experienced by the Muslim countries. Among other things: 1) a filter mechanism to the benefit of the use of scarce resources, so as to create efficiency. 2) Motivation system usage to fit the filter mechanism. 3) socio-economic reconstruction will enforce both previous elements and actualize hayat thayyibatan.

The meaning of peace must be clarified. According to Chapra, 'peace' does not mean 'rich' but 'ideal' which is the state where there is a balance between material and spiritual circumstances derived from the resources available. Therefore, the Islamic state can be said to be a utopia or ideal when the inner dignity and morals of society increases, the obligations of society as inheritors of the earth to natural resources has been accomplished, and justice as well as the disappearance of oppression. Prosperous countries according to Islam, is not a socialist or a capitalist country, but a country with Islamic concepts and Islamic life.

In the context of the theory of citizenship, welfare is defined as the peak of the evolution of citizenship rights. Western democratic societies evolve started from just a small portion of the gain civil rights, political, and social. When the rights of civilians began to be applied more broadly, the notion of citizenship demands to be met in full social rights. A person can not be considered as a member of the full and equal society that lives in poverty, in a house that is not habitable, his health is not properly maintained, and educated inadequate.

Falah is the main goal

 Excellence of Chapra, he was able to do a good filter on the economy of conventional and Islamic formulate a healthy economy. Chapra even capable of providing sharp criticism for failures and sosialist capitalist system, even though he had earned a doctorate from the University of Minnesota, USA, which cernderung follow Western mindset. Citing thought on previous scholars such as Ibn Qayyim, Imam al-Ghazali, Ibn Taymiyya and others, Chapra incorporate the concept and strategy of Islamic economy with Western economic concepts he learned.

However, due to Umer Chapra many involved in the world of macro economy, he served as a senior economist in IRTI, IDB. Also served as Senior Economic Advisor for 35 years. Working in SAME and also served in Pakistan Econimic Development, so that ideas and concepts which he proposed to refer to the country's economic system, Islamic banking and monetary policy outline. The solutions offered by the economy Umer Chapra is nothing but the result of observation and direct observation while in the world of academic research and at the same time. It makes the advantages once its shortcomings, because the micro sector that has play no small role on the economy of countries, particularly developing countries, should be of particular concern for economists and researchers.

Chapra weak point in his thoughts are on the magnitude of tolerance to most of the western concept in the process of Islamization of Economics. Chapra not firmly reject the Western system and use the Islamic economic system is pure, but it minimizes the use of some economic instruments West he thought was important enough to maintain economic stability, before releasing a perfectly conventional systems. Chapra argues, the process of Islamization should be done gradually and slowly.

The process of fusion between Western science and Islam are complementary within Chapra, making it is in the midline, where some concepts Western economies are still used in the Islamic world, especially in the banking system, get tolerance. For Chapra realize that purification of Sharia banking can not be done unless slowly. So that the elimination of the concepts and the western financial instruments should also be done gradually. Therefore, Chapra emphasizes the moral improvement of economic actors and the equitable distribution of scarce resources and the allocation of credit to the more needy sectors. For the economy to become an independent state, regardless of Western principles and is able to realize the socio-economic justice that deliver to the well-being so that the public is able to achieve falah.

In the context of Indonesian-ness, welfare is defined as the achievement of equity in three dimensions: the dimension of social justice, economic justice dimension and the dimension of democracy and governance (government). Dimensions of social justice include matters relating to justice and equitable distribution of the process of fulfillment of basic human rights, such as access to care, access to electricity, old school, long life expectancy and so on. Economic justice dimensions include size of justice for the people in gaining access to resources and economic assets, such as home ownership alone, the ratio of the working population, the ratio of the cost of education and so on. Dimensions of democracy and governance include the assuredness of the people participating in the overall democratic process independently and without discrimination. The assuredness portrayed in political rights, access to information, security and civil liberties. From a little explanation, it can be understood that prosperity is a condition in which the economic needs are met, social justice is achieved and life safety is assured.

To prosper, there are several issues that can affect it. Indeed there are many problems that there are in order to achieve prosperity. But here will be discussed the most important issues in welfare, namely poverty.

The issue of poverty is an issue that is closely associated with prosperous. The majority public understand that the poor man is not prosperous. Although poverty is a significant lack of these materials is not the only cause of the loss of well-being, but it can not be denied that people also need a treasure for life. This issue has become a problem since time immemorial. Poverty is also closely associated with the social ills that often occur, such as theft, robbery, up to domestic violence (domestic violence). The perpetrators claimed that the crushing poverty that was the main factor of their behavior are. It emphasizes that poverty is often used as the main cause of the loss of human welfare.

To overcome these problems, Islam offers some solutions. First, by working hard. Allah says in Surah Al-Mulk: Verse 15 explains that human beings should be sought on the earth to reach his earn. Secondly, with the help of relatives. Islam does not deny the existence of those who can not work, such as the elderly, widows, orphans or disabled. For that, Allah SWT require relatives to pay attention to their fate. Allah says in Surah Al-Anfal: Verse 75 express the idea that the primacy of kinship there to get something from her relatives than others. Third, with the charity. Zakat is a miracle of Islam to means of alleviating poverty. Zakat is one of the pillars of Islam is the duty of every Muslim. With the zakat, income redistribution can run well. If the charity can be applied perfectly, then wealth will not be much accumulation, but the treasures will be channeled to those in need. Fourth, with government intervention. In the business world, often occur frauds that occur in the field, such as hoarding, gambling, speculation and so forth. To cope with these things, it would require a watchdog agency that monitors the rate of existing transactions within a country.

So that the welfare of the Muslims is different from welfare in view that only western oriented sheer material. Islam regards the welfare in two dimensions, ie the dimensions of worldly and hereafter, where the dimensions ukhrawi more dominant in determining human well-being. To achieve prosperity, falah concept should be applied, because falah with various implications can bring to the welfare of these two dimensions. To apply Falah, a Muslim must run sharia defined Allah because it contains serious benefits for humans. The road to prosperity alone is not easy. Poverty is a major problem in welfare issues. Poverty must be combated by changing people's mindsets about the 'poor'. In alleviating poverty, Islam recognize some solutions, among other works, help relatives, charity, and government intervention.