EP 123 w Syed Akbar Ali: Islamic Economic System - The Before and After. Is it An Illusion?

We unpack the islamic economic system primarily in Malaysia as a 40+ year experiment. Bank Islam was established under the Islamic Banking Act 1983. Malaysia subsequently built a large Islamic-finance ecosystem: banking, takaful, sukuk, Islamic money markets and Shariah-compliant investments. Today Islamic banking represents roughly 47–48% of total financing in Malaysia. So after more than 40 years of Islamic finance we certainly have the laboratory results to ask the question— what has actually changed? Is this just a captive market cleaved from an existing market or has it grown by creating real economic value? And if we say that an Islamic economic system produces better economic value and outcomes - as the proponents claim, where is the evidence? Has poverty disappeared or fallen to levels lower than in a conventional economic system? Has economic inequality decreased? Has household debt decreased or increased? Has access to affordable housing improved or has it become worse? Has exploitation by financial institutions decreased or increased? Has wealth become more widely distributed? Has productivity increased? Has corruption decreased? Has economic mobility improved? Has the ordinary Malaysian become demonstrably better off because of the Islamic economic system? In 2024 the Malaysian Islamic money market reached RM5.98 trillion. The question is: If most Islamic financial transactions use Commodity Murabahah, does this mean that the Islamic banks are really sharing business risk and profits — or are they simply using Islamic financing contracts that work much like conventional banks and conventional loans? That is just an observation/query, it is not suggesting that any of those transactions are legally non-Shariah-compliant. Shariah compliance is one part of the equation. Economic equity and economic performance are another. If we cannot measure the difference, if we cannot mesure the BEFORE and AFTER we cannot honestly claim to attribute the economic result to this or that system. What are the measurables BEFORE vs AFTER? These questions need answers otherwise we may just have created nothing new from something old and dressed it up with bells and whistles to satisfy an eager and captive market of believers. If something is new and unique it must create real productivity growth and wealth creation that must be exclusive - and not mere illusion. We Have a Country to Save ‎