THE ENLIGHTENED THINKER
The scandal involving the Bank
of Mauritius (BoM)
and the Rs
28 billion advance against future profits is not a technical financial
matter. It reveals the structural flaws of Capitalism and
the fraud in its financial
institutions.
In 2020, the BoM handed over Rs 60 billion to the government.
While Rs 32 billion was written off, Rs 28 billion was to be treated as an
advance against future profits. This demonstrates the use of central
banks which are purportedly independent to cover the holes in the
budget. Capitalist governments are based on financial gimmicks, instead of
actual reform.
It was not counted as one of the official debt because of the
treatment of the Rs28 billion as an advance. This deceives the citizens and
investors into considering this as sound public finances. This kind of
manipulation shows the dependence on appearances and not transparency by
Capitalism.
Capitalism is based on debt and fiat
money. Central banks are misused by governments as they shift the burden on
the common man by way of inflation and poor purchasing power. In the Rs 28
billion case, Capitalism compromises the long-term stability in favor of the
short-term survival.
Islam prohibits riba and
money is pegged on actual assets such as gold
and silver and does not allow random printing or imaginary progress.
Allah (swt)says: Allah has permitted trade and forbidden usury." (TMQ
2:275)
This means that deficits can no
longer be financed using fraudulent schemes, but rather using real revenues.
The Khilafah prioritises Shari'ah compliant revenues such as zakat
on wealth and produce, Kharaj
on land tax, Jizyah on the non-Muslim citizens, Ushr
on imports, the state ownership of the natural resources.
This system does not require
interest-charging loans and monetary fraud. The Prophet (saw) said:
"Whoever misappropriates from the war booty will come on the Day of Judgment
carrying what he took." (Bukhari, Muslim)
State wealth is a trust.
Liabilities cannot be manipulated or hidden away as in the Rs 28 billion case,
by the leaders. Islam involves transparency and moral accountability. It is not
just a governance issue but also a Capitalism issue, which divorces economy and
morality, allows riba, and even condones collusion by central banks. Khilafah
is the solution to these shortcomings in the form of basing currency on gold
and silver, outlawing riba, and safeguarding the common good.
The Rs 28 billion saga indicates
how Capitalism is based on deception and manipulation. On the contrary, Islam
has a system of economy that provides justice, stability and accountability in
terms of real-value money, lawful revenues and divine guidance.
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