Al-Ahram Weekly Online   30 August - 5 September 2012
Issue No. 1112
Published in Cairo by AL-AHRAM established in 1875

Islamist economic strategies and policies

Do the Islamists who rose to power on the back of the Arab Spring have any novel economic ideas, asks Khalil Al-Anani*

It is curious that in spite of the fact that Islamists have reached power in a number of Arab countries they have yet to outline an economic policy that sets them apart from other political and ideological forces. More surprisingly, until now the economic policies followed by Islamists in power have not departed in any significant way from those that prevailed under the authoritarian regimes toppled by the Arab Spring. Consequently, many must be wondering whether the Islamists have an economic outlook that sets them apart from their predecessors and, if so, whether they have the ability to put it into effect.

It is possible to answer the foregoing questions without falling into the trap of possibly fallacious value judgments through an examination of current trends. Using the statements issued by Islamist leaders and, even better, the decisions and measures they have taken up to now, at least in Egypt, we can objectively gauge the nature of the Islamists' economic policy (if the term even applies). On the basis of such evidence, we can observe four important phenomena that throw some light on the Islamists' political-economic outlook.

Firstly, Islamist parties have been persistent in their attempts to portray their economic programmes and outlooks as consistent with Islamic strictures or as geared to the application of "Islamic economy," a term that has sparked controversy within academic and intellectual circles. Without entering into the maze of this controversy, we can contend that the emergence of this notion was more in the nature of a "cultural" and ideological attempt to evade the theoretical jaws of the capitalist-socialist dichotomy than a serious intellectual effort to forge a comprehensive economic theory inspired by Islamic values. This contention is sustained by a clearly observable discrepancy between values and practices in "Islamist" economic activity. For example, the practices of so-called "Islamic banks" are not very different from those of ordinary commercial banks. Essentially, all that happened was that the terminology changed (ie "riba" for interest, "gharar" for risk, and "sukuk" for bonds).

Ironically, Islamic economic terminology did not originate with the Islamists. Islamic economic terminology first appeared in the early 1960s among the rural poor in the areas of Mit Ghamr and Zifti, in the Delta, in the context of cooperative savings projects, which planted the first seeds of the Nasser Social Bank, which was founded in the Nasserist era. Much later the Islamists co-opted the terminology as part of an on-going process of capitalising on religious and identity symbols in order to acquire social acceptance and legitimacy. In fact, some Islamist spokesmen use Islamic economic terms, such as "murabaha," "mudaraba" and "musharaka" -- all referring to profit and loss sharing arrangements in an investment -- with little understanding of the terms and their economic, mathematical and budgetary ramifications. Moreover, Islamic economics has become an avenue to the acquisition of considerable wealth, even for some Islamic clergymen and jurists who are actively engaged in establishing the theological and legal foundations for types of economic transactions that are inconsistent with the values of justice and abstemiousness that presumably inspired the rise of this concept. But that is another story altogether.

Secondly, there is an unmissable discrepancy between the economic platforms of Islamist political parties and their actual policies. For example, while the FJP's economic platform advocates "the Islamic economic system" and abounds in such terms as "buyu" (sales under certain conditions), "muharabat al-iktinaz" (combating the hoarding of wealth), "tatfif" (fraudulence), and "taqtir" (niggardliness). However, the actual policies and practices of the ruling party differ little from the capitalist practices of the former regime (even as I write this, the government is engaged in negotiations with the IMF for a loan of over $4 billion, in spite of the fact that the Muslim Brotherhood had opposed the loan shortly before President Mursi came to power), which has led some analysts to conclude that the Muslim Brotherhood subscribes to the same "neoliberal" economic outlook as the Mubarak regime. This conclusion also appears to apply to Tunisia's Al-Nahda Party, whose leaders spare no opportunity to urge an increase in major capital investment, promotion of the private sector, and closer assimilation into the global economy on the basis of free market principles and international conditions regarding economic deregulation, which generally comes at the expense of the poor and limited income sectors of society. Apparently, the Islamists have yet to realise that such policies were a chief cause for the revolutions against the former regimes, due to the gross income disparities they generated between the rich and poor, leading to conditions that triggered the tragic self-immolation of Mohamed Bouazizi.

Thirdly, another noticeable discrepancy is to be found between the Islamists' religious and ideological rhetoric and their economic behaviour. For all their talk about abstemiousness, social justice, fair competition and transparency, Islamist leaders have shown a remarkable preference for capital accumulation and concern for the interests of Islamist businessmen over those of the poor. Muslim Brotherhood entrepreneurs furnish a glaring example of this inconsistency as they apply the methods of the "market economy" to the letter, collecting more and more companies and factories under their belts and building up monopolies in various sectors of the post-revolutionary economy. At the same time, one observes efforts to silence opposition to the neoliberal economic drive, particularly among labour, through the federations of labour and occupational syndicates. In Islamists' business circles one hears the same arguments in favour of such behaviour that one heard before the revolution and that place greater emphasis on the need to raise economic growth rates and attract foreign investment than on the realisation of just and sustainable development and fair distribution of wealth. Apparently, many Islamists are enthralled by the economic model of Turkey under the Justice and Development Party (JDP), which succeeded in rescuing the Turkish economy from the brink of collapse and building one of the fastest growing economies in the world today. On closer inspection, however, we find that that growth brought injustice to many among the poor and marginalised in Turkish society while benefiting the urban middle and upper middle classes and, particularly, the bourgeoisie connected with the JDP.

Fourthly and more importantly, the Islamists appear bent on following an economic policy that promotes the model of the caretaker state. The problem with this model is that it is actually a form of economic bondage that deals with people not as individual citizens with rights but rather as vagrants who merit pity and hand-outs. In other words, the Islamists proceed from the standpoint that there are no structural flaws in the current economic system but rather that the problem resides in the character of the people who run it (which accounts for the remarks by the prominent Muslim Brotherhood leader and business magnate Hassan Malek praising the efficacy of the economic strategies of the Mubarak regime while reserving criticism solely for some monopolistic practices and financial corruption). The Islamists believe that they can manage the economic affairs of the state in the manner of their philanthropic activities. Leaving aside the questions of transparency and accountability, the Muslim Brotherhood's network of economic and social services, for example, is a kind of parallel or informal economy that operates on the principle of "charity" as opposed to the idea of a partnership among equal citizens. This network has been highly instrumental in rallying political and electoral support for Islamist parties and candidates. Applying this strategy at the state level would transform the whole of society into an electoral constituency for the Islamists, which would guarantee their perpetual hold on power.

* The writer is a researcher at School of Government and International Affairs, Durham University.

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