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International Lendings and Capital Needs

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It is quite clear that in today’s interest/usury-hungry world, we cannot expect to get an interest-free development loan for national needs. The best course left is to, therefore, avoid foreign loans until such a time when we are ready to extend other nations a loan without interest in times of need. This will mark the dawn of a new revolutionary era and create a new paradigm for the world which it may find inspiring enough to emulate. It may then be possible for us to enter into economic and commercial deals with other nations on an interest-free basis. It is possible that the day may dawn when the world’s public opinion might unify against the age-old scourge of interest. If the developed world gives up this exploitative system sincerely and genuinely starts helping the less developed countries to stand on their own feet, they will receive double dividends. It will be advantageous from the political, sociological, and economic viewpoints.

Capital Needs of Profit-Making Projects

The abolition of interest will totally eliminate the avenues of guaranteed profit from people’s investment unless it involves their labor and risk. Similarly, the enforcement of Zakāh will make it impossible for them to hold back their capital. Moreover, under an Islamic government and its benign socio-economic structure, there will be no door left open for the filthy rich to indulge in unwarranted luxuries and extravagance from their surplus income boosted through the interest channel. Those with surplus capital may spend it on welfare projects by contributing to charitable work or through donations to institutions or even to the government for public welfare schemes.

They also have the option to deposit surplus capital in banks which the banks are entitled to invest in the business and earn profit while guaranteeing the deposit return to the deposit holders. Another option is to invest one’s savings into some profitable business through Mushārakah or equity participation on a profit and loss sharing basis arranged through government channels or banks. As in the case of an interest-based system, the most practical and profitable form of investment in an interest-free dispensation will be through banks.

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