islamic economic renaissance 365interested reader may wish to refer to bibliographical sources in
Siddiqi (1980), Khan (1991) and Kahf (1994).
Writing on Zakàh continued until the end of the twentieth century.
The treatment of the topic, however, was broadened to examine the
issue within the framework of fiscal policy and a just allocation of
resources. To take but one example, Zakàh, by necessity, was an
important subject for the attention of participants in seminars on
“Monetary and Fiscal Economics of Islam”, held in Makkah in 1978
and Islamabad in 1981. The Makkah Seminar addressed some of
the major theoretical issues, while the Islamabad Seminar focused
on the examination of some of the experiments in Islamic banking.
Zakàh can be seen clearly discussed by researchers on fiscal policy
in Islamic state as presented in the Seminar Proceeds (see, Ahmed,
Iqbal and Khan, 1983). It is not surprising to see Zakàh mentioned
under a variety of headings. Zakàh is a multi dimension subject and
by necessity or implication it is appropriate both to examine Zakàh
per se and to look into its effects on other issues. The importance of
the topic rests on two main dimensions: Zakàh as a worshiping prac-
tice being the third pillar of Islam, and Zakàh as an economic activity
for its economic and financial implications. For the latter, Zakàh has
a significant impact on various issues such as: fiscal policy of the
state, (b) taxation policies, (c) economic development, (d) social justice,
(e) distributive justice and need fulfillment, (f ) saving and investment
decisions, (g) financial policies of the business enterprise, (h) consumer
behaviour. It is not surprising, therefore, to find Zakàh one of the
most researched topics in Islamic economics.
Having given Zakàh the due respect in space and time, we turn our
attention now to the second area of interest that has preoccupied
the thinking of Muslim economists both before and after the First
International Conference on Islamic economics: Ribà.
Abolition of Ribà
What is new about the writing on Ribà-free, or interest-free, Islamic
economics in the twentieth century, particularly in the later half of
the century, is that Islamic economists treated the subject in relation
to major contemporary financial issues: (a) the operation of banks
and financial institutions, and (b) monetary and fiscal policy. The
objective was very clear: on the one hand it was to address the ques-
tion of modernity once more with a view to proving that Islam is