Articles on Islamic Economics
This is reply to the second rejoinder written by authors of the book “Breaking the Trap of Debt, Inflation, Interest and Poverty” while responding to the book review.
The is second rejoinder to the book review of Breaking the Trap of Debt, Inflation, Interest and Poverty. Original review can be accessed at: https://islamiceconomicsproject.com/2026/05/08/breaking-the-trap-of-debt-inflation-interest-and-poverty/
It is encouraging to see the commitment of the authors to engage with criticism of their proposal. Such efforts to engage with critical issues of the economy and society are highly respectable and deserve appreciation. Some further clarifications are humbly provided in response to the rejoinder by the authors.
Rejoinder on the Book Review: Breaking the Trap of Debt, Inflation, Interest and Poverty. Original review can be seen at: https://islamiceconomicsproject.com/2026/05/08/breaking-the-trap-of-debt-inflation-interest-and-poverty/
This research paper provides a theoretical reframing of the objectives underlying Islamic economics and finance. While Islamic finance is largely known for avoiding specific prohibitions—such as Riba (interest), Gharar (excessive ambiguity), and Maysir (gambling)—critics argue that it has become operationally identical to conventional finance. The author argues against this phenomenon of ‘Shariah arbitrage’, where the outward form is Islamic but the substance remains conventional.
The book by Qanit Khalilullah and Sohaib Umar offers a critique of the modern fractional-reserve banking system, arguing that it is the primary engine behind chronic economic instability, inflation, and wealth inequality. The authors propose a radical macroeconomic transition to a full-reserve banking model. This proposal is specifically tailored as a structural panacea for Pakistan’s crippling debt crisis, while simultaneously being framed as a genuine path to establishing a Shari’ah-compliant Islamic financial system.
World merchandise trade grew 4.6% in 2025, beating the 2.4% forecast, as demand for AI-related goods offset tariff uncertainty and policy risks. Asia drove 71% of that growth, supported by resilient emerging-market demand, expansionary policies, and North American frontloading ahead of US “reciprocal” tariffs. Pre-conflict projections had 2026 merchandise trade growth slowing to 1.9% and global GDP at 2.8%. However, the Middle East conflict has curtailed Persian Gulf oil shipments, which account for 20% of global liquid petroleum use, pushing crude to ∼$90/barrel and LNG to ∼$16/MMBtu. If prices stay high, merchandise trade growth may drop to 1.4% and GDP to 2.5% in 2026.
Contemporary halal certification represents a fundamental institutional transformation: the shift from an ontological framework in which permissibility is assessed directly against Islamic law to an epistemic-institutional regime in which halal status is constituted through institutional verification. This transformation is a necessary response to the informational conditions of modern economies, but it introduces structural risks—certifier-pay conflicts, interpretive fragmentation, and form-over-substance compliance—that the current institutional framework inadequately addresses.
To catalyze systemic transformation, the author introduces the Global Housing Resilience Accelerator (GHRA), which implements a mechanism called Tokenised Sustainable Equity for Safe Housing (TSESH). By leveraging technological and regulatory advancements in block chain and blended finance, TSESH transforms trapped housing equity into a liquid, verified resilience asset class called Resilience Property Tokens (RPTs), structured with binding social protection covenants.
The book deconstructs the methodology of modern science. It acknowledges the empirical success but highlights its limitations. Modern science only addresses the how (mechanism) and ignores the why (purpose). By restricting reality to what can be measured in a lab, modern science ignores the metaphysical realm, leading to a fragmented understanding of existence. The book also explores the historical tension between the Church and science in Europe, which led to the total separation of religion and the state. The author argues that because Islam never had a ‘Dark Age’ conflict between faith and reason (as seen in the Islamic Golden Age), the Western secular model of science is a solution to a problem that never existed in the Muslim world.
Islamic Economics Project 