95APPENDIX
BIslamic Instruments:
Historical Background
T
he mercantile communities of the Middle East followed a sophisticated
tradition of trade and business partnerships that can be traced back to
the pre - Islamic period. With the introduction of Islam, the examination of
common business practices began with a view to identifying those practices
which were in direct confl ict with its teachings. This process continues to
this day. However, one of the major contributions of Islam was to codify,
systematize, and formalize traditional trade and business practices into a
formal legal system of standardized contracts, leading to a mercantile law in
complete harmony with Islam.
As Islam spread out of Arabia to other geographical regions, new situ-
ations, business practices, cultures and customs were put to the same test
of conformity to the tenets of Islam. Islamic practices and contracts became
well - known from one corner of the globe to another, as scholars have noted:
Through their trade and commerce in the Middle Ages, Muslims
spread over the continents of Asia and Africa and into Europe,
bringing with them their religion and their cultures. From the earli-
est days of the expansion of Islam to the present day, Muslim busi-
nesses have been models of success and integrity. Islamic business
in history is an exotic and dynamic panorama that ranges from
gem merchants in Ceylon, to caravan traders in Mali, to dealers
of saffron in Muslim Spain, to sellers of aromatic oils in the deserts of
Arabia, to colorful cotton markets in Turkey, to spice markets in
India, to the hardwood merchants of Malaysia, to the plantations
and industry of Indonesia, to carpet makers in Kashmir, to the great
merchant houses of the Levant, to the oil of the Arabian Peninsula,
North Africa, and Brunei. The business practices and ethics in all of
these places, and from the moment that Muslims arrived there, are
derived from the same source.^6An Introduction to Islamic Finance: Theory and Practice, Second Edition
by Zamir Iqbal and Abbas Mirakhor
Copyright © 2011 John Wiley & Sons (Asia) Pte. Ltd.