Haitham al-Haddad – Islam – The Solution for World Economy
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Islam put
proactive measures, I call them proactive measures, preventive measures to offer to improve the financial system. And then Islam put preventive measures sorry, proactive measures and then preventive measures and prohibited certain transactions certain financial activities in order to stop speculation in order to stop increase of deaths. Yeah, in order to a stop manipulating the money in the hands of a few people so that it shows that rich people will get richer and the poor people will get poorer. Once they slam put all of these measures, then and once we observe all of these measures, we can see how Islam provide solutions for our financial problems and for the
financial crisis that we went through
Bismillah R Rahman r Rahim al hamdu Lillahi Rabbil alameen wa salatu salam ala nabina Muhammad, wa ala alihi wa sahbihi ajwain.
This topic which is
Islam is a solution for the financial problems is a very important topic, it can be a complicated topic, it can be simplified, I'll try to give it in a way that is simple. However, it doesn't mean that it is shallow,
I will give it in a way that is deep. But in sha Allah, it will be understood by everyone, because it can be a little bit technical. And once it becomes technical, it will become really difficult to grasp.
Okay, Islam, and finance or Islam is the solution for our financial problems.
To understand, first of all, how Islam approach finance in general economy in general, we have to understand certain principles. And those principles are really very important to be understood. The first principle is
Islam.
Islam is a way of life.
And that way of life is given by the Creator who knows everything, this way of life has been given to us by the Creator and the Creator who created us is the best one to tell us what this creation Who are we can function properly.
As we say, the, that the manufacturer of a car is the best way is the best one. To explain how this car can run. How can this car can function properly and we cannot change that. Their creator will Allah, Allah the Creator, the Supreme the Lord, the highest Allah, Allah Allah is the best one to tell us that creation, how to function properly and how to run things.
I always give this example which might be funny for some people, but I believe that it is a deep example.
If you bring your car
Mercedes or whatever, yeah. And it runs by diesel
and you say that no, because of modernity or because of whatever reason, I want to put petrol in it
will it run?
If it runs maybe for a few miles then it will okay be written off.
Yeah, the machine the engine will be damaged. Is that true or not?
Why?
What is the reason we did not follow the instructions of the manufacturer, the manufacturer of said use diesel, we have to use these. We cannot assume that the manufacturer wanted this without him saying So, similarly, when we talk about Islam, we say that Allah the Creator, he gave us the instructions, how to run how to operate as human beings.
And we have to follow that. Allah said in the Quran, Allah, Allah, Allah, Allah will who will not be the one who created Doesn't he know his creation.
That means he knows where he will not be from Javier, he is all acquainted gelada. So this is the first principle that we need to remember once we talk about Islamic finance. Some people will say, What do you mean, we will see how this makes a difference. The other main point is
life from an Islamic perspective,
is divided into two parts. Part One part before death. And the other part is after death. Life before death is a test. Life before death is a test. That's all. It is not meant by itself. Allah created us to live in this life in order to test us a lie. The law Allah says in the Quran, Allah, Allah
created life and death, or created death and the life in order to test you. So that's the whole concept of this life. So the real success is Allah, Allah, Allah says in the other universe in a cartoon, Moto, Moto, Romeo malkia, semenza. And in
fact, the one who kept away from the fire of * and admitted to paradise, he is really successful.
So when Islam deals with anything, when Allah sends instructions for anything, Allah is looking after both lives, this life, and most importantly, most importantly, the second life.
What does that mean in Islamic Finance, in Islamic Finance, it means that you do not look at the welfare system only now, as it is in this life. You need to look at this, and you need to put into consideration what may happen to you after life. This is a very important principle. The second thing is, life is not just about luxury.
Life is not just about luxury. So the purpose of the financial system in Islam is not only luxury, luxury can be part of it, it is not the ultimate aim, while in the non divine system, the ultimate aim of life is what
the ultimate aim of life and the ultimate aim of wealth is what
to enjoy it. Yeah, people look for better jobs in order to what to have better salaries, in order to work, to spend the holidays to travel here and there, to have a better lifestyle, to buy whatever they want, and so on to the drive a luxurious car, and so on. But from an Islamic perspective, this is not the ultimate aim. What does that mean? What does that lead to? It leads to the fact that you The aim of the person should not be Money, money, money, money, wealth, wealth, wealth. What does that mean? It means that Islam deals with the main problem that led to the recent
credit crunch. Yeah, credit crunch, and recession, economic recession, which is what greed
all those who spoke about the recent credit
Crunch, they said that the main reason behind this is an ethical reason in the first place, which is what? greed, you know, greed. Yeah. How because they, the the managers of those banks and financial institutions, they in order to get high commissions for themselves, they allowed people to have these mortgages. Yeah, you know, mortgages
mortgages to buy houses through banks, which is a Riba based system. Yeah. So they allow them to have it without checking without going through the proper procedure. So, as a result of this, people out of greed, again, they were buying so many properties, so many properties, and the debt was increasing, increasing increasing. And then when the debt of the people themselves was increasing, after some time, they could not afford to pay their debts, and they want to the banks in order to what in order to get money, but now banks themselves do not have cash. Other projects, they want to banks in order to get finance to finance their projects, banks do not have money, the banks went to
the people who bought those properties. The people were unable to pay their debts, the credit crunch started to happen. And then the whole financial market collapsed. Okay. Now, the main reason is an ethical reason, of course, they say that the financial service authorities, they were not applying the proper checks and balances. Yeah, in order to make sure that lending is proportional to the for other financial activities. And as a result of this, this credit crunch took place. That is true. But that is part of the story. Everyone agrees that greed was the main problem. How to deal with greed.
This is a big question. If greed led to this,
this crisis, financial crisis, then we need a system to deal with greed. Islam comes and says, Listen, life is not only about collecting money, life is not only about how much you spend, how much you how luxury, you live, Islam is not about this, there is another life which is more important than this life. In fact,
there you will live their real luxury life, you will enjoy your life. And here in this life, just take the minimum that helps you to function as a slave of Allah, in order to propagate Islam and in order to finance other people. So, money is what is not or wealth is not an aim by itself. Wealth is what is a mean
to attain what to attain another purpose or high purpose, what is that purpose, the pleasure of Allah. And this is another fundamental difference between the Islamic financial system and the non divine financial system or the non Islamic financial system, which is what money or wealth from an Islamic perspective is just a mean, to attend something, while in the non divine system it is what it is, itself is the purpose itself is a goal.
As we said, the financial crunch happened because of number of reasons, one of them is great. And you need an ethical system, strong, powerful ethical system to deal with greed, and Islam comes to solve this problem.
This is one thing.
Moreover, once we understand that
Islam is dividing this life into two types into two parts, part one part before that, and the other part is after death.
And Islam says, the more charitable activities you do, the more you will be rewarded in the life after death. Yes, the more charitable activities you do in this life
The more wealth you will get, how come? The more you spend for charitable purposes, the more you will get in return. Not only in this life but in the hereafter or not only in life after death, but here now, how come? Islam says, as the Prophet sallallahu Sallam said, Man aka Somalian men sadaqa? Yeah, a charity does not decrease does not decrease wealth. In the other Hadith, in fact, the charity increases wealth. How can a charity where you spend increases your wealth? Islam says that if you do it for a noble purpose, to please Allah, you will get a reward in the hereafter. Moreover, Allah will put blessings Baraka in your wealth, and your wealth will increase, maybe the wealth will
not increase in quantity, but wealth will increase in what? equality. That's why Allah, Allah, Allah says in the Quran, other than other than this heading one.
And then what choco le de la him Baraka to Minnesota, he will Oh, well, I can get double falfa now who
had the people of the towns believed in Allah, Allah would have given them from the earth and the from the heavens, without any limit,
unlimited risk, unlimited provisions, but they disbelieved and as a result of this, we have took them all of a sudden.
So
in order to be a charitable person, you have to believe in the hereafter and the reward in the hereafter. This is one thing, the other thing, a charity is a very important foundation of any financial system. In fact, one of the main reasons for the non divine funding the collapse, sorry, the collapse of the non divine financial system, which is the capital system in this world, is what
lack of charitable activities or limited charitable activities?
Yes. Is it clear? Why a charity is one of the foundations of Islamic Finance? Why and how?
If we go and read Surah Baqarah chapter two, which is the longest chapter in the Quran, from verse 261, to verse 274. You will see that Allah describes the financial system, the Islamic financial system, and in the beginning, Allah, jell O Allah spoke about giving a charity giving, yes. And after that Allah, Allah Allah spoke about the prohibition of Riba.
So Allah gave us a proactive solution. Yeah, or a preventive measures before talking about Yeah, the prohibition of Riba.
Elijah lo Allah spoke in almost 13 is about the importance of giving a charity methylene levena una de Sevilla he came with a baton embedded savasana condition but it may have been a la who live fully Manisha. Then Allah Allah Allah says Allah Medina, una llamada hombre lado de la sera alanya. I ended up being mala, mala homea Allah Allah Allah also says a shavon
moroccanoil Sasha Alaia, ducommun, filata, minnewaska, blah, all these ayat that took about in that in candidates pending in the last ayah that we have read Allah Allah Allah says the Chapin promises you poverty
but Allah promises you what increase and further and demographia and forgiveness in order for you to be encouraged to spend a charity for a charity purposes. And one of the foundations of the Islamic financial system as we say, is to spend for a charity. Now, some people say why.
And the charity does. Charity means spending that change money in your pocket. You have just a few pounds or a few
crowns. You just give them to the poor people know, a charity from a monastery.
emic perspective is a whole system. It includes, it includes the change that you give to poor people. It includes hosting that guest.
hosting your guest here is part of the charity system is part of the financial system in Islam.
Is this clear?
Yes, no. For example, one time I was traveling somewhere in London, just the last week in Britain, and in the middle of nowhere, it was raining heavily. It was very cold. I said to myself, I was questioning myself if the car broke down here. Yeah, there is no hotel.
Can we knock on any door and say to the people, we have no shelter, you need to host us?
Yes.
Can we say this to people? Because if our car broke down, no one to fix it. We need somewhere to stay. We need to maybe eat or drink some hot to drink? Yeah, we need shelter because a frame. This is what a financial activity because if there is a hotel, we will go and spend money in order to receive this service. agree or not. So this is a financial activity. This is part of the human being activities. Part of economy, you can say.
Now, this, which is a financial activity, Islam says if you need it, you can get it for free.
Okay, it is obligatory from an Islamic perspective to host your guest who is in need for shelter, and food for at least three days.
There are some differences of opinions, that does not get into it. But it is obligatory to host him or her for some time.
Do you imagine this? Now this is part of the Islamic financial system. Not many people are focusing on this point.
So hosting a guest is part of the financial Islamic system. Part of the Islamic financial system, which is part of the charitable system in Islam is to build a trusts or out of endowments, you know what? trusts endowments? Yes? Would you call it in Norwegian?
No work is more than foundation.
Work. Works. Trust.
No, no, just a building work. What does it mean in Norwegian?
walks is like a state real estate. You know, what does real estate mean? Real estate property. You say this is for Allah.
Yeah. Oh, the market?
garages?
I don't know. Okay, anyway, that you say that this is for a lot. So poor people can use it. The income,
the income, yes, the income, you can rent it and the income will go to poor people or not necessarily to poor people to fund certain projects. In London in England, we have a lot of this by non Muslims. And I have read a book about the history of endowment or trusts in England, the history of that they have taken it from the Middle East during the time of crusades. They have taken it from the Muslim world during the time of crusades. London Bridge. Do you know London Bridge in London? Yeah. The main tenants of this is coming from the tourists to fund the bridge
is not the government. Maybe the government is paying something but mainly some people have fixed assets. Yeah, as a trusts to fund the maintenance of London Bridge in Islamic history. Our path or trusts or endowments played a major role in funding so many Islamic projects. Most of the educational system in many Islamic periods in the Romanian period, abassi period,
any period, they were funded by our path so a person
builds a school or an institution and he built next to it, I will call off these buildings a trust to fund
the school the educational system, what does that mean? It means that the economy cull burden on the state will be what lifted because now there are supplements to what help the state in financing educational system, health system and so on. So, there will be no burden no huge burden on what on the state unfortunately in the capital system, because it is none divine system, the whole burden is on what on the state to fund everything. Yeah. Now in the UK, they have taken part of this and there are many projects funded by the AF system they have taken this from the Middle East during the time of Crusade, which is something good, which is approved that Islam can provide a solution for what
for the financial crisis. Imagine if there are more institutions funded by the system there this system then there will be no huge burden on what on the government.
Okay, so this is a charitable activity, part of the charitable activity is mentioned in again in Surah. Al Baqarah.
When Allah Allah Allah said,
for encantadora 17 02 in Isla Mesa, Casa de PUE, higher en la come in contented Amman, okay.
When you
lend someone money
and he is unable to pay on time.
This is a crucial problem, a big problem in the any financial system.
Yeah. Are you aware of this problem? default payments? What does default payments mean? Yeah. You buy you bought a house or any property in installments?
Is it clear? Yeah. To buy anything in an installment system? Is it clear?
Now you have to pay every month?
What about
at one point in one month, you could not pay?
What will happen?
This is a huge problem. Yeah, in the financial system in any financial system, because they are trying to find solutions. The credit crunch, one of the main reasons for the credit crunch is this.
The recent credit crunch that started in 2008, how people were buying properties by installment system, this mortgage system
to one point because of greed, they were unable to pay
for their properties.
Now, the mortgage system how it works, if you default is called default payment. If you default, one time, two times or three times. What do they do?
Do you know anyone who works in this field? Yes.
They see is the thing. Okay. They What?
And not Yeah, that's
Yeah, they take the property. They take the property and they put it in the market. They kick you out? Yes. And they take the property, they put it in the market? Yes, they repossessed the property, reposition. So, if a person genuinely can't pay, what will happen? One month, two months, three months. They take the property, they kick him out. There were many people in America professionals who lived in shelters. And once they they could not afford to pay those shelters. Yeah, they were they lived in in the caravans wealthy some wealthy people or professional people because of this problem. And when they put it in the market those properties in the market because of the credit
crunch no one was able to buy them so the market collapse more and more. Okay, so one solution
For this problem, which is the default payment to remember default payment is if the person genuinely is unable to pay on time.
Allah Allah Allah says, find out the rotten Illa Messara, give him a leeway give him some time, this is what part of a charitable activities is it to clear? So how come I am giving him a leeway in a financial activity in a business transaction, and you consider it as sadhaka. This is a very important principle in Islam, there is no differentiation between financial activities here and being charitable for higher purpose. Yeah. So,
part of your sadhaka part of your setup is if a person is unable to pay their debt on time, give him a leeway. Not only this, Allah Allah Allah says, One Casa de highroller come, if you say to him, you are unable to pay the debt on time. Genuinely, I'll give you a leeway. He said, I can't pay at all. Allah, Allah Allah said, forgive him, forgive him.
Forgive him.
This is a sadhaka This is a charitable activity. Just like this, he will go away, yes, he will go away.
If you believe in the Hereafter, you will get more than what you have given him in the dunya and in the alpha in this life and hereafter. This is part of the Islamic financial system that is not mentioned when we talk about Islamic finance. All what we talk about in Islamic finance is what prohibition of Riba Yeah, but this kind of a charity and the role of a charity in the Islamic financial system in its full capacity is not mentioned at all and this is wrong.
That's why we say those Islamic banks, if they really want to be a real Islamic banks, they should include a charitable activities within their functions.
I'll take some questions in Sharla Yeah.
Let me repeat this point, those Islamic banks, if they really want to call themselves a ceramic banks, they have to include some charitable activities within their functions and their operations
because it is part of Islamic financial system, okay. So, this is the charity and how charity can help in solving that it says that the financial problems that we are facing, I hope that is clear. Then
after all these measures, which I call them in normally in my lectures, and if we have a presentation, I call them preventive measures, what is it preventive measures,
then, we come to the
technicalities of Islamic finance. Okay. Now, when we come to the technicalities of Islamic Finance,
Islamic finance from a technical perspective,
it prohibits
gambling, speculation, it prohibits a cheating,
it prohibits
doubtful or uncertainty and it prohibits Riba
it prohibits gambling, it prohibits gambling, speculation and all of those related activities. It prohibits what
what did we say? What are the what are the things
know before Riba? gambling speculation?
Cheating, uncertainty, yeah. And Riba?
Apart from those prohibitions, Islamic allows any financial activity.
Is it clear? Yeah. Now if you look at gambling,
it is a very unethical activity.
Gambling, gambling, don't just limit gambling to
What is it lottery
lottery no gambling is wider than this.
For example, the stock market can be a gambling market at one point
you know stock market where you buy and sell shares,
those activities can be gambling, gambling,
how
you buy Okay, you buy you buy in order to what to sell when the prices go up based on speculation,
this is exactly gambling
here
you buy because you heard certain rumors about this what this company and you buy because the price of the stock went down and you are expecting that those rumors will be what will be cleared. So, once those rumors are clear the prices of the stock or the price of this stock will increase then you will sell this is very close to gambling without getting into the technicality whether it is allowed or not allowed, but this is one of the main problems of the credit crunch. So, this is gambling
the uncertainty, the uncertainty, it is a very unethical activity, you buy something you are not quite sure whether you are paying money for something that you will get, you might get it you might not get it, you might be cheated out of this, okay, this will create hatred and this will create some societal problems, some social problems, let alone that those who are smart, they can what be richer, and those who are not smart enough and they don't know the tricks of the market they will get poorer. So the rich will get richer and the poor will get poorer.
Okay, this is another foundation of the Islamic financial system. So we mentioned gambling we mentioned uncertainty, what else we mentioned, the cheating. Uncertainty is doubting a cheating. Cheating is clear, no need to mention about it. Let me go to Reba.
Reba
rebar, the philosophy of Riba, the philosophy of Riba is buying and selling money. So, you consider money as what
as a commodity to be what to be bought and sold? Yes, while money the main function of money is what to use it to buy and sell, is it clear?
So, you cannot use money which meant to buy and sell as a commodity that can be bought and sold?
Yes, this is the main philosophy.
Now, what is equal to money staple food is also equal to money, we will not talk about this because we will we like to make it as simple as possible
in an in another word, exchanging money
for more money or for less money, without a real property without a real commodity in between here
listen, this means that you are buying or selling money
is it a clear buying and selling money, how you are buying and selling money for money. So you are using money for other than its main purpose, which is what to buy and sell commodities. This is the main philosophy. Now
this
let us put that in mind.
Islam prohibited this.
Now, once we think about this, what led to increase in deaths? Yeah. In that is one principle called selling debts. Yeah. Selling debts. You know what the selling debts mean? Yeah, it takes so many names. If I have a debt, or if someone owes me money, I want
some money from someone
Yeah, I lent you 1000 crore.
So, this is a debt I am unable to get it from you. So, I will go to another financial institution and I will say to the other financial institution I want to from x person 1000 Crone, you can now buy it from me and you can ask him for money. Yeah. And I will take it from you 800 crumbs.
So, give me a 10 minute crown in cash.
Get give me a 10 minute crown in cash and the debt is yours. So, you can go to that person and ask him for 1000 crore. Is it clear? This is selling that
this is totally prohibited in Islam.
Okay.
Now, why Islam prohibited these activities where money is a commodity to be bought and sold.
One of the main reasons brothers and sisters here for the credit crunch for the financial problem or problems that we are suffering from in the world in the whole world is something called money creation.
Have you heard of money creation?
have anyone heard of money creation?
No. Money Creation. Just one person. Money Creation. Money Creation is one of the worst problems. And one of the main reasons for all the financial problems that we go through Islam prohibited all loopholes in any financial system that may lead to money creation, one of them is selling debts. Another one is using money as a commodity that you buy and sell.
Okay, how money creation works? Can you be ready for that? How many creation works? In order to be ready in order to be active? I ask everyone
to take a deep breath.
Yeah, don't release it. Just take it take it.
Hold it until you are about to die.
And just before you die,
breathe
Okay.
Shall we do this?
Shall we do this?
Yeah. She says Shall we do this? Don't worry if you die, your other all of us will die.
At one point all of us will die. So is that true or not? Yeah, so if you die, in fact, if you die hamdullah Now many people will say oh May Allah forgive him or my ALLAH forgive her. That is better than to die and no one will say Oh ALLAH forgive him or forgive her. Yeah. So let us start. So we say one, two, and then three. We take a deep breath. Yeah, no cheating. We said that it's cheating is against Islamic finance. Yeah. Okay. Bismillah 123
we'll repeat it one more time. Yeah, no laughing so we will hold it okay.
123
No cheating. Who is this still holding it?
Oh Mashallah.
Masha, Allah.
You have big long, sir.
Come on.
Now is one minute.
Shawn long
Are you serious?
Are you still
come on
noise now? One minute, 20 seconds.
One minute 20 seconds, Mashallah. And this is the record.
Okay? If you feel sleepy, you know your toes,
toes, toes, toes, you know toes, the fingers of your,
of your feet. Yeah, just what you call move them. Yeah, hold them and release them. Yeah. Try to do this. This will make you awake.
Notice
No, it's true.
How you know why?
You know why? Because you are forcing the blood to circulate.
Because you are moving the last part of your body, which is there your toes. So then the body the blood has to circulate throughout the whole body.
Yeah, so you do that exercise inshallah. Okay, anyway, we are about to finish now. Okay. Five more minutes. So anyway,
we were saying that money creation is one of the biggest problems of the current financial system, what does money creation mean? By the way, if you go to Google, sorry, YouTube, and put money creation, you will find very good clips that talk about money creation, they will explain it in a way better than I will do. Okay, in a very simple way, money creation, how it functions, how it works and why Islam stopped that in the past, they used to part exchange, you know, pot exchange. Yeah.
Because at that time, they did not have paper money. So for example, I give you a give you a goat, or some meat you give me some food. Yeah, pot exchange.
Then they started to use gold and silver, I give you 100 grams of gold you give me What?
a goat or a sheep something like this. After some time,
they said instead of me carrying gold, it might be get stolen. So let me keep it with a person called Goldsmith. Yeah, the keepers of gold. Are you following the sisters? Yeah. Let me keep the gold with Goldsmith
and the goldsmith will issue a receipt
that he owed me he owes me
100 grams of gold or one kg of gold and he said this receipt you give it to me anytime I will give you what
I will give you what your gold
is it clear?
After some time the Goldsmith's
had formed again
and they said to themselves, let us agree that if this Goldsmith issued receipt for one kg
and this receipt was given to another Goldsmith, the other Goldsmith will give this person when kg
Yes. So, we recognize the receipts and people can exchange that receipts. So, if I have the receipt of one kg from a goldsmith, I can take that receipt and go to be okay. And I say hair is a receipt that I have taken it from what from a he has one kg and that one kg is mine. Take this receipt he will what this Goldsmith will give me my one kg of God. Is it clear? Okay. After some time, these Goldsmith's developed a very evil idea, very evil idea.
They said that let us borrow people. Let us lend people money.
Instead of lending them physical gold, let us lend them what
receipts.
So, if you want money I am a goldsmith you want money from me, I will say to you, here is your one kg of gold
I'm lending it to you and instead of giving it to you physically, this is a receipt yeah
this is a receipt
of this gold. If you want this gold come to me or come to any Goldsmith he will give you one kg This is what just lending him. So, I did not lend him what
I did not lend him what gold physical gold What did I lend him
receipt
clear? Yes.
Then they said
they said if I lend this person a receipt of one kg and I told him this is your kg and this person I lend him two kg and I told him These are your toe kg of gold and another person okay three kg These are your three kg of gold whenever you want them just take them Yes,
we have the Goldsmith's said according to our studies, not all of them will come and ask for their gold
at one point
this will not come and ask for his one kg this will not come and ask for his two kg this will not come as an ask for his three key kg at the same time. Are you following this? Yeah, okay. In another word.
If I said yeah.
Listen, you want one kg from me this is your one kg you want a three kg for me? This is one kg and this is another kg and this is a third kg. So, one of them is his Yeah. And as a goldsmith I have the three kg So, I lent him one here I learned to the other person or three and this one he said he wants to I said this is one and this is the second one the same that I have already promised what the other person. So, I have three physical kg of gold
how much I learned
how much I learned three, two and one six.
Are you following this
says are you following this? Yes. Okay. So, how much I learned out of the three kg that I have six
and I am confident that not all of them will ask them for their gold
if this person came and he said give me the one kg or you will say take this is one kg Yeah. And the other people the other people will not come and the same time asked for their gold
I agree. So, in reality, I have created three kg out of what
yeah out of three kg
did you get this?
So, now people have to give me how many kg
how many kg of gold?
No six yeah six kg
because this is one two and three. So, they have to return to me what six in reality how much I have three. So, I have created three out of three
I will get to the three mine and I have created three more
Is it clear? This is money creation in a very simple way this is a very evil idea. Okay. Now the credit crunch How can the credit crunch takes place? How does it take place? When this one and this one and this one all of them come at the same time and say to me as a goldsmith or as a bank? Give me my kg my gold. So I have to give him one. I have to give the other two I have given to the other three
But I have three only what will happen Are you will collapse?
Is it clear? This is called
okay. This is called money creation is slum prohibited did this and put certain measures to stop this. Islam said, if you want to borrow money, you have to take it in your hand
not as a receipt,
when you deal with money
in exchange of money, whether you want to borrow it, whether you want to exchange dollars, for pounds, any kind of exchange between money for money, it has to be what? Physical. So if this person said I want to borrow one kg of gold,
I cannot give him a receipt, I have to give it to him What? Physically? This person said, I want two kg of gold, I have to give it to him what physically? This person came and said I want to three kg of gold what will happen?
I don't have so either I have it and give it to him, or I don't have it. And I will not
give it to him. Is it clear? Yeah. And this is one of the main reasons for credit crunch. And this is one of the measures that Islam put in place in order to stop what manipulating the system and causing credit crunch or financial recessions. Of course, there is more to be said about this, but because of time and I promise you that I have to stop at this point.
Let me just summarize quickly what I have said Islam put
proactive measures, I call them proactive measures, preventive measures to offer to improve the financial system. And then Islam put preventive measures sorry, proactive measures and then preventive measures prohibited certain transactions, certain financial activities in order to stop speculation in order to stop increase of depth of depths. Yeah, in order to a stop manipulating the money in the hands of a few people so that actors that rich people will get richer, and the poor people will get poorer. Once Islam put all of these measures, then and once we observe all of these measures, we can see how Islam provide solutions for our financial problems. And for the financial
crisis that we went through. Of course, the topic has more to be the topic has more to be said about these points. But I hope that I have just give given a glimpse, as they say, of the Islamic financial system and the way it may contribute or it can contribute in solving our financial problems who will sell allow seller Mubarak and Vienna Muhammad wa ala alihi wa sahbihi.
tax system part of new Islamic finance.
Is the taxation system or tax system part of what Islamic financial system.
Okay.
From an Islamic perspective,
we should avoid putting tax on people.
Yeah, in fact, many scholars condemned putting tax on people.
Yeah, and they call it mkuze in Islam, and some, many scholars considered it as totally prohibited. Some other scholars allowed it when there is a genuine need and the government fails to meet its financial obligations, then they put taxes in a very fair way. Some other scholars said
if the if the government is unable to meet its financial needs or obligations, it means that there is a problem in the way it conducts itself. Because a lot that creator has provided people with what is enough for them.
Had they followed his instructions. So if they do not follow His guidance, then they will have these financial problems and the government before, before, before it imposes tax on people, it has to revisit the way it functions and operates in many fields. And once they follow the guidelines so far by the law, they will see that Allah will provide them and they don't need to impose tax on people.
Thank you very much. We have one more question here.
Hello, Ricardo.
Chef, I have a question regarding rebar. First of all, I was wondering, what is the purpose that we cannot involve in rebar, especially when you buy one house?
And then to the next question, which is,
which is we have other kind of Islamic banking, financial solutions like moussaka and these things. And doesn't
the client get the same problems in these kind of finance as he would if you have had if you had a river based loan? Yeah. Okay.
Now, why don't why can't we be involved in in
in Reba Yeah.
See,
I hope that I have that diagram
you know, they said that the more
you put
rebar
in the system, the more inflation will increase.
And this is a very strong
theory that has been proven by many economists, they said okay,
that
if you borrow
100 pounds or crown and you want to pay it as 120 crowns,
where does this tool
to 20 Crohns Where do they come from?
Yeah, they have to come from somewhere.
I agree.
So, where do these 20 crowns come from?
If you say what will happen normally, what will happen? You will say that, they say 20 krones I will work or I will invest this handed Quran that I have borrowed from this bank, I will invest them and then they will what they will increase. So, I will pay the bank 120 crowns. So, I will create the 220 crowns Okay, this is what people will say, but when the person borrows the 100 crown in order to invest it, let us say that he invested in properties, the prices of the properties will increase because the banks have put up the the interest rate Yeah, put it up. So, I in those the money that I have taken, which is the 120 clones, in fact, they came from the banks themselves. So, when I
returned the 120 crowns to the bank, in fact, I have not generated a 20 crowns, I have not generated that, but it is the inflation rate or the increase of the prices. So, the more I borrow from the banks, the more I help that inflation to increase. Yes. So, in fact, I did not generate a 20 crowns. In fact, those 20 crowns, I have paid them in another way, which is it through that inflation system. I hope that it is clear. Okay. I'm sure that it is not clear for many people. I hope if I have that diagram to explain the circle in in a nutshell, that the money does not generate money. Yeah, the 100 crowns that I have taken, I have to return them as handwritten 20 crowns. Where does
this amount the 20 crowns? Where do they come from?
Yes, is it clear. So it has to come from somewhere. And it is money, money cannot be generated by money, money can be generated by some other activities in isolation from the financial system. So if they came within the financial system means the financial system has taken them from me in order to give it they give them to me in a nutshell. So this is about the
variable. The other point, yeah, about Islamic finance.
And we see the same problems that exist within the conventional market. See, if we apply Islamic finance correctly, we will not see those problems that we see in the conventional system. For example,
you mentioned sharika, the mortgage system, I don't know if you have a mortgage system to buy properties here. Do you have they have it in Norway? The mortgage system how it works? Yeah. You go to the bank in order to buy this property? Yeah, this property cash is 1000 let's say 100,000 crowns. Yes, you go to the bank, the bank will pay to the landlord 100,000 crowns, and we'll take it from you.
And 120,000 crowns Yes. So, you will pay the bank 120,000 crowns
over 20 years is that is the same that is the system Yes. Yeah, in the middle, if you fail, what will happen?
The bank will repossess the property and will kick you out as we said
yes. Now in the perfect Islamic model, which is applied by unsolved finance. What does it say? It says that this is unsolved finance, which is not a bank. unsolved finance says to you, okay, this is worth 100,000 crore,
unsolved finance will contribute 80% and you need to contribute 20% and then this property will be owned as a joint ownership by unsolved finance. The bank. Yeah. And you. So, you will work on it. You will on 20%. And unsolved finance owns what? 80% then you can increase your ownership?
Yeah, by buying from answer finance, you might buy you and then you increase your ownership 20% 30% 40% 50% 60% imagine you own 60% of the property, then you lost your job.
Okay, you lost your job, you can't pay anymore.
unsolved finance will not repossess the property, because it is not theirs on Lee. It is a joint ownership between them and do Is it clear? And you need to pay rent Of what?
Of 40%? Not the whole amount, which is what a very reduced rate. Yeah. And ownership will continue. Okay, as a joint ownership between you and unsolved finance. Yeah. And you will be paying rent of 40%. Only, that is a fantastic solution.
And they will never repossess the property. Okay.
Now, you might say, what about if I can't pay my rent of 40%?
We say that we are not functioning in
a perfect Islamic financial system. Had we been functioning in a perfect Islamic financial system, unsolved finance, to have some charitable funds in order to pay for you if you can't What if you can't afford your rent, but that we are not operating in a perfect financial system? That's why they don't want to do this.
I hope that it was clear.
Okay, thank you very much for your lecture.
I work as a scholar of the obvious
Islam or the Middle East? And I'm now I'm following you very closely. What's happening in Egypt? And I would like your, your Islamic perspective on on two issues on what is going on in Egypt. The first thing is that mostly from day one is trying to get a loan from the IMF. What do you think about this from? And the second thing is some I've proposed in Egypt to have a minimum wage and a maximum wage that people should not make less money than a certain sum. But neither make more money than a certain sum that you put a limit on wages both down and and what do you think about this, according to Islam? Okay, these are two long questions. First of all, the first point
more say, there are two parties within the Egyptian Government. Yeah, some people, they refuse their loan from IMF, IMF, and they put pressure on Morsi, not to accept it.
And some other people, they pushed for it. And as you know, that the Egyptian Government now is not a free from the followers of the ex regime. So they put pressure on him. And I don't know the details, and he has to accept it. Or he had he had to accept it. I don't know the details. Now. I am F.
Yeah, you know, IMF, International Monetary
Fund. Find here.
Yeah.
In 2006, there was a report that says there is no country in the world that has taken the loan of IMF and was able to pay yet. Except they doubt one country, which is worth Saudi Arabia,
and the Gulf War during the Gulf War, otherwise, no country was able to pay off the debt.
This is a report from
I don't know, I forgot the institution that provided this. Can you see this?
Yeah. And that's why the party that was again, is taking the loan. Yeah. They said, Look, this is a slavery.
This is a slavery, we will be living in debts forever.
Yeah. And, you know, for example, Brazil.
I don't recall the exact figures. Now. Brazil. The, they they said that if they continue? I think for 20 years or so, they will they will be able just to be the end? They sorry, they will be just about to pay the interest? Not the original law.
Yes. Do you follow this? if they if they? If they're?
g What is it to the JD? Jd P.
Jdp. Yeah. If that reaches a level, a very good level, they will continue on that level with the surplus for I think 20 years to pay what?
Only the interest and then they need to think about what the actual loan?
Yeah. So that's why it is really a slavery. The other point, they said in that report as well, I have the details in my computer. They say that all
undeveloped countries that took the IMF loans, they failed in development, it was not reported at all, that those loans helped those countries to improve their their financial situation, they could not for whatever reason, so that's why these debts as many people say it is not conspiracy, these are just a matter to enslave or or colonized sorry, colonized countries, by what? By through finance. The other parts of the maybe your question can be answered later. Okay.
Yeah,
exactly. For sure. For the question. I will ask everyone to please be seated for only five more minutes when we continue because I have some very important things to say in sha Allah.
Yes, that's one of the important things.
First of all, I would like to thank Dr. Shay Haitham al Haddad for traveling all the way to Norway to deliver these
these beautiful lectures, intellectual lectures, academic lectures,
and help us in the West understand more about the religion of Islam and how Islam provides solution for the problems of this world. So Jessa, Kamala Harris chef, I really, really, really, really do appreciate it everyone was here today. And the second person I would like to, this is an obligation upon me, yeah. Whether to Muslims or to non Muslims. If I know something, I have to share it with others. I believe that Islam is the light of Allah, I have, I feel that it is my responsibility to share this slide with others. So I'm not doing you any favors, you are doing me a favor, but by allowing me to share those points with you, there's akmola Baraka Luffy COMM The next person I
specifically want to thank is the vice principal of Boston University College who is here present today, if you would like we would be honored if you could come down, if you prefer. Otherwise, we really, really do appreciate that you have been here today and listened with your own ears. What Dr. Haytham has been saying, rather than just judge before you have heard anything only from what you listen in the media.
Oh, by the way, I didn't know that he is here. Otherwise, maybe I would have said some maybe radical views.
I never
I never thought that he is here.
But this ice spoke up my mind. So this is all what I always say in any lectures, whether there is a vice chancellor or whether there is police or whether there is EMI five or 10 or whatever. Yeah, besides speak up my mind. Yeah. Anyway, thank you for who is the I don't know.
Oh, yeah. Okay. Anyway, I really am grateful for allowing me this opportunity to speak in this honorable institution. Thank you very much.
So I continue to thank the vice principal. Maybe I completely understand that people have different views about different things, but just that they let
Dr. haysom express his views, rather than boycotting him, or banning him or banning our student organization from having having seminars here. We are really, really happy and do appreciate that you give us the opportunity to have intellectual
debates or q&a sessions or lectures, so that we can come and know each other better. So thank you very much. I think everyone has should say thank you very much. Thank you very much.
Secondly, I think all of you my dear brothers and sisters who are here present today, for the sake of Allah to learn about Allah subhanho wa Taala as religion May Allah subhanaw taala help us to take this knowledge into our hearts and practice this knowledge in our daily lives and mean and inshallah make a steadfast on the religion of Islam.