30th August 2019 – Professor Mehmet Asutay delivered a lecture at the Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia (USIM) organised by USIM & IIUM IIBF. His lecture is titled as: Islamic Finance and Socio-economic Development: Does it reflect the Islamic view of development?
The lecture was organised by Dr Zurina Shafii at the Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia (USIM), who is a former PhD student at the Durham Centre for Islamic Economics and Finance and co-covener of SASE Islamic Moral Economy and Finance Research Network with Professor Asutay.
In his lecture, Professor Asutay questioned outlined the fundamentals of Islamic moral economy by arguing for socio-economic development is an essential part of the Islamic moral economy narrative. He rationalized this by making a distinction between the meanings and implications of economics and iqtisad, as the latter defines the equity, justice and goal orientation by constituting the base of Islamic social formation leading to embeddedness. After appreciating SDGs and other corrective mechanism, Asutay questioned that such movements do not attempt the change the fundamentals of capitalism which produces such adverse outcomes. By presenting the philosophical foundation of neo-classical economics and Islamic moral economy, Asutay in a comparative manner defined Islamic modes of production, value theory and distribution theory within Islamic social formation. He also discussed degrowth and demateriality as response to hegemonic nature of neo-liberal linear growth theory, which he considers as important policy outcomes of Islamic moral economy leading to socio-economic development.
Professor Asutay also presented some empirical work identifying the relationship between sukuk and socio-economic development, and also Islamic banking financing and socio-economic development. Empirical evidence suggests certain positive impact of sukuk on socio-economic development, while this could not be established in the case of Islamic banking unless financial inclusion is included. He highlighted that one of the reasons of no impact relates to high observed financialization which relates to the monies of middle class and riches in the Muslim societies. Therefore, the dissemebedded is created also by Islamic finance, as he argued.