Islamic Solution to the problem of unemployment and poverty of Bangladesh

(This is a partial copy of a report written in June 2009)

Khilafah’s response to the issue of Poverty:

Solving the issue of poverty is a million dollar question. How it can be done? Historically it has been argued that, Bangladesh is a poor country and it has fewer resources than it should have. This has been used a pretext by the rulers to give access to organizations like IMF, World bank, which serve the interest of their master, the colonist USA, Britain and the West in general. In fact Bangladesh is the only country in the world whose central bank (Bangladesh Bank) hosts the office of IMF in its own compound! Year after year budget has been passed but the issue of poverty and unemployment has remained where it was or has worsened in many dimensions.

How Khilafah will solve the issue of poverty in Bangladesh? Indeed the Khilafah will take the issue of poverty in its priority as commanded by the Shari’ah. Prophet (saw) said

‘ The son of Adam (all peoples including non-Muslims) has no better right than food with which he may satisfy his hunger, shelter wherein he may seek dwelling and clothing wherein he may hide his nakedness [Tirmidhi].’

The question arises whether Bangladesh has the money and resources to pay for its 150 million people? If we take a close look we see, the per capita income in Bangladesh is around $650 equivalent to TK. 45,500 annually. The average family size is around 5.6 persons. This makes per family yearly income of Tk. 254,400 or monthly Tk. 21,250. Now any one in Bangladesh or who studies about Bangladesh can quickly recognize that, if per family income of Tk. 21,250 is distributed properly, this is enough to end poverty.

Thus the problem of Bangladesh is not it is poor or has not been blessed by abundance of wealth by Allah (swt), but it is the problem of distribution. Allah (swt) says,

"Lest it circulates amongst the wealthy from amongst you ' [Hashr: 07]

Moreover, in Bangladesh there are around 50 banks. In each bank on an average there are around 100 branches. In each branche there are around 15000 accounts. In each accounts there are around Tk.5000 minimum deposits. What is the figure! This is Tk. 37500 thousand crore Tk. idle in the usurious banking system. The moment Khilafah will assume the power in Bangladesh (insha’Allah), this banking system will be shut down and this fund will be released primarily for the poor and will be given to the holder of accounts to invest in real sector. Nevertheless, the huge amount of fund in itself suggests that this country is not poor not it is resources-less that it can not feed its people.

Moreover, the statistics suggest that Bangladesh with around 150 million people who if they consume 500 gram of food grains daily (enough to cover their feeding needs) it only requires 25.3 million metric ton of food grains. However, last year’s and some previous year’s consecutive data suggest that, the total production of solid food grains like rice, wheat, burley, potato etc. is more around 30 million metric ton. In some year with bumper production it has reached even 39 million metric ton. The current agriculture system (which will be grossly changed under Khilafah to deliver more productivity) is enough to feed the people. So the question is why the Ummah of Bangladesh is poor (around 40%), its ministers beg for foreign loan, why its people are homeless? Why??

Finally, Khilafah will abolish the current system of taxation called VAT, where 100% of the people have to pay this indiscriminately in the same percentage. It will abolish the idea of income tax, which also charges two people similarly only on the basis of their equal income without any consideration of their family burdens. Khilafah will charge zakah on wealth on the rich and industrialist in the appropriate manner, some of whose proper zakah can feed lacks of people through out the year.
Above all of these, will the Ummah remain idle and sit down and not go for any work. No! They will work. Earn their bread. Therefore, combined with more than enough available recourses (subhannallah), people being active in work and the rightly guided system of Khilafah, the poverty will be in the museum (insha’Allah)

Khilafah’s Response to The Issue of Unemployment

Khilafah will not pursue a policy of industrialization like the current one where the allocation for industrialization and entertainment receives equal allocation (0.8% only,according to Budget 2009-10)! Khilafah will pursue an industrialization policy that will develop heavy industry, war industry, ship industry, the supplementary industry etc all in pursuit of taking the Ummah to its highest level of success. The public property will be great sources of revenue, material development and employment opportunity for Khilafah. Of course Khilafah state’s industrialization policy will solve the problem of unemployment.

Moreover, Khilafah will close the casino of stock market, insurance, banking and other usurious financial system which produces nothing but concentrates the wealth of the Ummah and lead them to Hellfire. Therefore with the closure of these financial systems, a great amount of wealth will the released form these unproductive financial sector and will lead to investment in real sector. The reason is because, even if Khilafah will have branches of bai’tul mal where people can deposit their excess money, they will not earn any interest; rather a charge will be imposed for granting security to this fund. Therefore, if someone saves TK. 1000 in bai’tul mal his amount will get reduced in next year. So, no body will be interested to save. Therefore they have to invest or find partners to start a business
.
Moreover, all limited liability companies will be closed and a different company structure according to shari’ah will be established where financing can be received with zero % interest, which will reduce the cost of production and increase productivity. This is because of the saying of Prophet (saw). Al-Bukhari reported on the authority of Abu Hurayrah that the Messenger of Allah (sws) said:

"He who takes money from people with the intention of paying it back Allah will pay on his behalf, and he who takes it with the intention to waste it Allah will waste him."

Ahmed also reported on the authority of Abu Hurayrah who said:The Messenger of Allah (saw) said:

"You shall return the rights to their rightful owners on the Day of Judgment, even the ewe with no horns will get even with the ewe with horns by butting it back."

So with the closure of these financial system (which has led the west into their miseries) and such limited liability company structure which is another form of wealth concentration, the only option remains is to invest in real economy. Therefore, at individual level millions of entrepreneurships will emerge in real economy, leading to a stable, independent and tranquil economic prosperity along with solving the problem of unemployment.

Now someone may argue, that, with the closure of banking system, it will be difficult to find an appropriate borrower and lender, because bank is efficient at intermediation. Someone may claim why close banking sector, it formulates capital; someone may argue that, if there is no interest rate, there will be no incentive for deposit and investment, some may argue that, bank is very vital for modern economy because it can appropriately investment risk leading to profitable and safe investment.

All of these are nonsense argument. It has been published that in Bangladesh top 20 borrowers from bank have bad debt of TK. 2130 core for one Bangladeshi bank; the Lehman Brothers has collapsed with their efficient risk measurement in deciding investment! Moreover, bank does not form capital rather it holds back public money out of circulation without letting someone to use it. Finally, without banks finding appropriate borrower and lender will be impossible is an argument of declined mentality. Gotok Pakhi Vai (a match making firm or marriage bureau) has started operation in Bangladesh for last 8-10 years. Does that mean, before the establishment of Gotok Pakhi Vai in around year 2000, no one in Bangladesh got married!! Before the emergence of banks did the people not lend and borrow?

Conclusion:

The west has conspired and conspired enough against the Ummah of Muhhamad (saw). Their slogan of poverty reduction and economic emancipation was a mere rhetoric. One billion people throughout the world suffer from hunger, a figure which has increased by 100 million because of the global financial crisis, says the UN. Asia-Pacific with 642m and sub-Saharan Africa with 265m is the highest in the tally, even though they are the one with highest amount of material resources blessed by Allah (swt). The failure of this system of capitalism has become clear and even their proponents has candidly agreed by saying "It's the first time in human history that we have so many hungry people in the world," still the rulers of the Muslim world follow their prescription, and lie that the Ummah of Muhammad (saw) is poor while they live in luxury and serve their masters. We, the Ummah of Muhammad (saw) are the only one left in this world with a book revealed upon Him (saw), to help and guide the mankind. Allah (swt) says in Sura Baqarah,

Alif. Lam. Mim. (1) This is the Scripture whereof there is no doubt, guidance unto those who ward off (evil). (2) Who believe in the Unseen, and establish worship, and spend of that We have bestowed upon them; (3) And who believe in that which is revealed unto thee (Muhammad) and that which was revealed before thee, and are certain of the Hereafter. (4) These depend on guidance from their Lord. These are the successful. (5)