Dr.

Monzer Kahf

In our modern world, some scholars devoted their life developing

some new ideas in Islamic economy and financial systems that
appropriate with our era. One of them is Dr. Monzer Kahf. He known as the
economist, a lecturer, a consultant and expert in Islamic Shariah and law.

He was born on 1940 in Damascus, the capital city of Syria. Thus, it

make him 76 years old by today. However, regardless of his age, his
thinking is still critical and even discerning. He completed his primary and
secondary

secondary

education

from

the

educational

institute

of

Damascus before taking his Bachelors Degree in Business from University

of Damascus, Damascus, Syria on June 1962. He was then graduated with
highest honor awarded by the President of Syria. In 1967, he achieved
High Diploma in Social and Economic Planning from the United Nations
Institute of Planning, Damascus, Syria. He attained his Ph.D. in Economics
(Majoring in Currency Development and Economy) from University of
Utah, Salt Lake City, Utah, United States. That was on March 1975. Beside
his Ph.D. in United States, he has a strong training and knowledge in
Islamic Jurisprudence (Fiqh) and Islamic Studies. This scholar is a certified
Public Accountant in Syria since 1968.

There is no doubt that with his highest achievement in education, he

got a rich working life. He has worked with many organizations including
university, research institutions, and financial institutions and he worked
splendidly. His first job is as an instructor while he is studying in School of
Business, University of Damascus in Damascus, Syria, from 1962 until
1963. Right after he finished his degree level, he worked as an auditor at
the Government State Audit Office, Damascus, Syria from 1963 until 1971.
After that, in 1971, he worked as a teaching assistant in Department of
Economics, University of Utah, Salt Lake City, until 1975.

He then become as a Director of Finance in Islamic Society of North

America, Plainfield, Indiana (1975-1981). From 1981 until 1985, he worked
on

his

private

business

that

focus

on

financial

and

investment

consultation. Within 1985 and 1995, he became a research economist and

Head of Research Division in Islamic Research and Training Institute (IRTI)
of the Islamic Development Bank (IDB) Jeddah, Saudi Arabia. After that, he
was promoted as the Senior Research Economist in 1995 until 1999.

Since 1999 until now, he became a consultant, trainer and lecturer of

Islamic Banking, Finance and Economics in California, United States. He
also currently worked as a Professor (Islamic Finance and Program
Coordinator) for the Masters program in Qatar Faculty of Islamic Studies
and also teaching and supervising their theses (from August 2008 until
present). In summer 2010, once, he came to Malaysia as a Visiting
Professor for the graduate program of Islamic Finance at the International
Center for Education of Islamic Finance, INCEIF, Kuala Lumpur.

As the overview of Dr. Monzer Kahfs publications, he wrote so many

books, articles, encyclopedia entries and conference papers. For books, he
wrote around thirty books and booklet in English and Arabic. Majority of
his books are focusing on Islamic banking and finance, Islamic economics,
Zakah, Waqf and including some, which have become the standard
reference manuals in the field. Some of his books are translated to
Indonesian, Turkish and even Korean languages.

As for the articles, encyclopedia entries and conference papers were

published for more than 100 articles, in English and Arabic. They are
focused on Islamic economics, Islamic public and private finance, Islamic

banking, Zakah, Waqf and including entries for the Oxford Encyclopedia of
the Modern Islamic World.

Despite his many books, his main publications that become a

reference to many scholar in many fields is The Islamic Economy:
Analytical Study of the Functioning of the Islamic Economic System. The
book has been translated into Indonesian, Turkish and Korean, which
prove that the book has been widely used around the world as a
reference. In this book, Dr. Monzer Kahf used the tools of economic
analysis to demonstrate the effects of zakah, prohibition of riba, and alqirad (mudharabah) in the realization of Islamic objectives.

As for zakah, he explained that it is a yearly tax that is collected from

someones net income. It need to be collected by the country itself and
only used it for the special purpose only. By the way, for Dr. Monzer Kahf,
zakah does not reduce the demand in the market, but instead increasing
it. The reason is that everyone can afford to buy anything. The rich people
will pay their zakah, and the zakah will be distributed to the asnaf, like
poor people that are in need. So that even the poor people can buy, their
basic needs. That is why the demand will be increasing. It also will effect
positively to the economy.

Point number two is prohibition of riba. As per told in his book, Dr.
Monzer Kahf points that there are two type of transactions that are not
allowed by Islamic economy. There are the interest rate, and increasing
the quantity of the same type of commodity exchanged. As we already
know, Allah prohibited riba in Islam, and so that interest rate that is part of
riba also prohibited. For the exchanged in commodities, the commodities
we are referring are gold, silver, dates, wheat, salt and barley. These types
of commodities is called as ribawi items. We are obligatory to only
exchange these items only with the same type itself. For example, we

want to exchange dates with dates. We must exchange it with the same
types, same quality, same amount or same weight and on the same time
and the same place by face-to-face transaction. That is the reason or
being qias on why we cannot ask the borrower to pay the amount money
he borrow from us with the increased value.

Third is on the interest, rent, and capital. From the economic view,
savings and deposit in the bank is a negative action. But why? So, Dr.
Monzer Kahf give his point of view on this action that banks customers
must be punished for their action to approve depositing their money into
the bank, and not being rewarded. For him, the real productive activity is,
the customers used their money, instead of make a saving in the bank, to
use it as a modal or capital for their business, or buying a land, or invest it
on the labor. All these three activities can only increase their amount of
money. Those action, for Dr. Monzer Kahf, need to be rewarded. In Islam,
these actions are called as al-Qirad or Mudharabah.

The last point told in the book is on al-Qirad, or also known as

Mudharabah. Basically, al-Qirad is an agreement between the investor
(capital provider) and the entrepreneur. It was an arrangement between
one or more investors and an agent where the investors entrusted capital
to an agent who then traded with it in hopes of making profit. Both parties
then received a previously settled portion of the profit, though the agent
was not liable for any losses. Theoretically, al-Qirad have two basis,
ownership and cooperation. For the ownership, Muqarid (investor) is fully
entitled to demand his capital back and demand the profit gained by their
business. And for cooperation, both sides need to agree to share the same
amount of profit that are gained with no fixed amount on the profit need
to be claimed by the capital provider.

Dr. Monzer Kahf also points us about his opinion on the market
structure. He divides it into the categories, freedom, governments
involvement, ant the rules of play in Islamic economic.

Freedom is the state of not being imprisoned or enslaved. Which

means that in the scope of economics, market structure are determined
by the cooperation. Islamic economy is a free economy, but the freedom
is more into competition. Sure, that cooperation is a general theme in
Islamic social organization, and even the individualism and social
awareness are closely intertwined. Moreover, work for the welfare of
others is the best hope to fully develop everybodys skills. However, we
need to remember that what we are all doing is to pleased our god.

Governments involvement. Government only involve in the market

only at the certain time or being temporary. Islam is something that exists
with others as the basis for the stable system. The government is
considered as the planner, supervisor, producer, and consumer.

The rule of play in Islamic economy. The term rules of play is refer
to commands and rules for social, politic, religion, moral, and law that
binds the people. Some institutions are designed that way to direct people
until they can accepted and follow rules given to them. The reason that
the organization are created is to control and to supervise people. These
regulations come to the conceptual framework of the relationship with
Allah, life, people, fellow creatures and to achieve ultimate goal of life.