INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA

COURSE OUTLINE

Kulliyyah / Institute

Kulliyyah of Economics & Management Sciences

Department / Centre

Department of Economics

Programme

Bachelor of Economics / Bachelor of Business Administration / Bachelor of

Accounting

Name of Course / Mode

Foundation of Islamic Economics

Course Code

ECON 1710

Name (s) of Academic staff /

Instructor(s)

Dr. Mohd Nahar Mohd Arshad (ma.nahar@iium.edu.my)

Br. Md. Fouad Bin Amin (fouad_econsu@yahoo.com )
Br. Foyasal Khan (foyasal.khan@gmail.com)

Rationale for the inclusion of

the course / module in the
programme

This course is expected to develop the capability of students to enter into

positions in government, business, and consulting firms, which call for the
analysis of economic problems and variables from an Islamic perspective.

Semester and Year Offered

Semester I & II

Status

Core

Level

Undergraduate

Proposed Start Date

Semester I, 2014/2015

Batch of Student to be Affected First year students

Teaching-related

relatedAssessment-

Mid-term Exam

Final Exam

Formal
Assessment

Group Presentation

Total Student Learning Time

(SLT)

Independent
Learning

Lecture

Face to
face

36

42

31

Total Guided and

Independent
Learning

Total Hours
120

Credit Value (hours)

Pre-requisites (if any)

ECON 1510 (Principles of Microeconomics)

ECON 1610 (Principles of Macroeconomics)

Co-requisites (if any)

Nil
This course is expected:
1.

Course Objectives

To provide a conceptual introduction to Islamic economics.

2. To enable the understanding of how Islam and its worldview permeate

all aspects of economics.
At the end of the course, students should be able to:
1.
2.

Learning Outcomes

Transferable Skills:

Argue why Islamic economics is a legitimate body of knowledge.

Describe how Islamic economics is developed using sources of
knowledge in Islam.
3. Compare and contrast the general features of an Islamic economic
system with conventional economic systems.
4. Apply Islamic perspective to the main area of economics including
production, consumption, distribution and some selected issues in
Islamic banking and finance.
5. Illustrate the ideal Islamic economics practices as a viable alternative
to conventional economics.
Skills
How they are developed
Assessment
method
Interpersonal interaction
Group-based
Plan and organize
and communication,
oral presentation
projects
literature review, research
and written
and inquiry
project report
Identify problems
Research and inquiry
Group work and
and provide
exam questions
solutions
Synthesize concepts
Research, discussions
Group work on
and theories
and inquiry
selected issues

T&L / Assessment Strategies

Teaching-learning strategies
Assessment strategies

Teaching-Learning/assessment
strategy

Course Synopsis

Description
Lectures, in-class discussions,
consultation and group
presentations
Group-based oral
presentation on
assigned topics
Group work on
selected Islamic
economics issues
Mid-semester exam
Final exam

This course introduces students to the basic premise that the study of Islamic
economics proceeds from the Islamic worldview and has to be developed

according to a methodology that is founded upon this worldview. Therefore, the

foundations that need elaboration are the Islamic worldview, Islamic economic
methodology and features of an Islamic economic system. Since economics
deals with production, consumption and distribution activities of societies,
these areas will be addressed in this course too. Other significant areas of
contemporary Islamic economics such as the prohibition of riba and issues in
Islamic banking are also discussed.
Mode of Delivery

Lecture & Presentation

Assessment Methods and

Type/Course Assessment

LO
1,2,3
4
4,5
All

Method

Mid-semester Exam
Group Presentation
Group Paper

20
10

Final Exam

50

20

TOTAL

100

Mapping of course / module to the Programme Learning Outcomes

Learning Outcome of the course

01

02

Programme Outcomes
03 04 05 06 07

1.

Argue why Islamic economics is a legitimate body of

knowledge.

2.

Describe how Islamic economics is developed using

sources of knowledge in Islam.

3.

Compare and contrast the general features of an

Islamic economic system with conventional
economic systems.

Apply Islamic perspective to the main area of

economics including production, consumption,
distribution and some selected issues in Islamic
banking and finance.

Illustrate the ideal Islamic economics practices as a

viable alternative to conventional economics.

Content outline of the course / module and the SLT per topic

08

09

Weeks
1-3

Islam, its Worldview and Islamic Economics

Islam
Definition of Islam: iman, amal, ihsan.

4-5

The Islamic Worldview

God, man, nature/universe, religion; the nature and
characteristics of man; man's role as `abd and khalifah;
nature/universe in Islam; the concept of din and its
implication to economic activity.

Nasr (1993)
Chapra (2009)
Arnold (2001)

Islamic Economics
Definition of economics; scarcity and choice and the
economic problems; definition and scope of Islamic
economics.

14
Haneef (1997)
Mahmassani
(2000)
Abu Saud (1993)

Methodology of Islamic Economics

Fiqh, usul al-fiqh and Islamic economics; stages in Islamic
economic methodology - issues; comparison with Western
economic methodology.

The Islamic Economic System

Economic System
Definition, components, classifications/ characteristics;
Islamic Economic System - general introduction,
philosophical foundations, operational principles and goals.

Task/Reading
(author/page)

16

Methodology of Islamic Economics

Methodology
Importance of knowledge; epistemology - definition and
scope; sources and channels of knowledge in Islam;
definition; Shari'ah, - definition, scope, sources and issues.

6-7

Learning
Hours

Topics

Property Ownership
Definitions and types; general principles and types of
ownership in Islam; implications for the economic system.

Motivation/Incentives
Definition, types and importance; relationship between
Islamic worldview and motivation; implications for rational
behaviour.

Organization of Decision Making

Definition and types; concept of shura; implications in
economic decision making.

Coordination Mechanism
Definition and types; importance of markets and planning.

14

Kahf (1992),
Mirakhor (1995)
Khan (1992),
Gregory/Stuart
(1992)

8-10

Allocation of Resources in an Islamic Economic System

Importance of resource allocation; the role and limitations of
markets; markets under Islamic economic system; supply and
demand; the role of the State; the institution of Al-Hisbah.

11-12

14

Normative and technical aspects of resource allocation and

their application in consumption and production activities
from the Islamic perspective.

Distribution
Goals and principles of distribution in Islam; types/categories
of distribution in economics; equity, equality and justice;
provision of basic needs and the reduction of poverty.

Siddiqi, Kahf,
[All from Sayyid
Tahir (1989,
eds.)]
McConnell &
Brue (2002)

14

Pre-production/initial distribution; Concepts of khilafah and

amanah and the ownership of natural resources; arguments
for public and private ownership.

Iqbal, Siddiqi,
Zarqa, [All from
Munawar Iqbal
(1986, ed.)]

Post-production distribution; returns to factors of production;

arguments on minimum wage rate; and minimum
standard/quality of living.

Syed (1992)

Redistribution; rationale; positive, voluntary, and preventive

measures.

Islamic Financing
13-14

Riba
Meaning and scope, stages in the prohibition of riba and its
rationale.

12
Siddiqi (2004),
Chapra (1992)

Islamic Alternatives
Riba vs. bay; concepts of mudarabah, musharakah,
murabahah, and ijarah; selected issues in Islamic finance.
Required references supporting the course

Abu Saud, Mahmoud. (1993). The methodology of the Islamic behavioural sciences. The American Journal of
Islamic Social Sciences. 10 (3).
Arnold, R. A. (2001). Economics. 5th Edition. (Chapter 1, pp. 1-20). USA: South-Western College Publishing.
Al-Junaid, Syed Abdul Hamid. (1992). Reading in microeconomics: an Islamic perspective. In Syed Tahir, Aidit
Ghazali, Syed Omar S.A. (Eds.). Kuala Lumpur: Longman.
Chapra, M. U. (1992). The nature of riba and its treatment in the Qur`an, hadith and fiqh. In Syed Ghazali et. al. (Eds.),
Introduction to Islamic Finance. Appendix 1 (pp. 379-391).
Chapra, M. U. (1992). Riba in the Quran, hadith and fiqh. In Syed Ghazali et. al. (Eds.), Introduction to Islamic
Finance.
Gregory, P. R., & Stuart, R. C. (1995). Comparative economic systems. 5th Edition. Boston: Houghton Mifflin
Company.
Haneef, M. A. (1997). Islam, the Islamic worldview and the methodology of Islamic economics. Journal of Islamic

Economics & Management, 1(1).

Iqbal, M. (Ed.). (1986). Distributive justice and need fulfillment in an Islamic economy. Leicester: The Islamic
Foundation.
Kahf, M. (2005). Islamic economics system - A review. In Aidit Ghazali & Syed Omar Syed Agil (Eds.). Readings in
the concept and methodology of Islamic economics. Kuala Lumpur: CERT.
Khan, M. A. (1982). Al-Hisba in Ibn Taymiyyahs public duties in Islam. Translated by Muhtar Holland. Leicester:
Islamic Foundation.
McConnell , Campbell R. and Brue, Stanley S. (2002). Economics, principles, problems, and policies. McGraw-Hill
Irwin.
Mahmassani, S. (2000). The Philosophy of Islamic Jurisprudence. Kuala Lumpur: Other Press.
Mirakhor, Abbas. (1995) Outline of Islamic economic system. Zahid Husain Memorial Lecture.
Nasr, S. H. (1993). A young Muslims guide to the modern world. (Chapter 1). Cambridge: Islamic Texts Society.
Siddiqi, M. N. (1992). Islamic producer behaviour. In A. M. Sadeq & A. Ghazali (Eds.), Readings in Islamic
Economics. Kuala Lumpur: Longman.
Siddiqi, M. N. (1992). Islamic consumer behaviour. In A. M. Sadeq & A. Ghazali (Eds.), Readings in Islamic
Economics. Kuala Lumpur: Longman.
Siddiqi, M.N. (2004). Riba, bank interest and the rationale of its prohibition. Jeddah: Islamic Research and Training
Institute.

Recommended references supporting the course

Attia, Gamal Eldin. (2007). Towards realization of the higher intents of Islamic law. London: IIIT.
Anwar, M. (1990). Islamic economic methodology. Journal of Objective Studies, 2 (2).
Chapra, M. U. (1992). Islam and the economic challenge. (Chapter 5). Leicester: Islamic Foundation.
Prepared by:

Checked by:

Approved by:

_______________________
Dr. Mohd Nahar Mohd Arshad
Course Coordinator
Department of Economics
Kulliyyah of Economics &
Management Sciences

_______________________
Prof. Dr. Norma Md Saad
Head
Department of Economics
Kulliyyah of Economics &
Management Sciences

_______________________
Prof. Dr. Nik Nazli Nik Ahmad
Dean
Kulliyyah of Economics &
Management Sciences

At the end of the programme, students are able to:

*Note: Programme Outcome 9 now reads as: Integration of Islamic Revealed Knowledge and Values

1. Demonstrate an understanding of economic knowledge both from conventional and Islamic

perspectives and awareness of contemporary development of the discipline.

Knowledge

2. Utilize quantitative and qualitative techniques and creative thinking to solve economic
problems.

Practical Skills

3. Cooperate with others in providing solution to problem faced in socially responsible manner
for the progress of the nation and the ummah.

Social skills and

Responsibilities

4.
5.

Demonstrate behaviour consistent with professional ethics and Islamic values.

Value, Attitudes,
Professionalism

Demonstrate effective communication skills with mutual respect.

Communication

6. Develop, implement and evaluate basic strategies and action plan.

Problem Solving
and Scientific Skill

7. Recognize the importance of continuing professional development and changes in

economics.

Information
Management and
Lifelong Learning

8.
9.

Be creative and innovative in managerial and entrepreneurial endeavours.

Demonstrate effective leadership skills imbued with Islamic value.

Managerial and
Entrepreneurial
*Leadership and
Team Skills