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 Islamic Economic Glossary

Lit: Water which gushes forth by itself. Tech: Relating to the law of iqta, a place which contains a source of water gushing forth naturally and being accessible to common people. It cannot be donated as iqta to anyone. The Prophet withdrew salt layers of Maarib after granting them as iqta on this plea.

 

Water of canals dug by non-Muslims but now within the Muslim territory. Lands irrigated by this water are subject to kharaj.

 

The water of large rivers from which every person has an equal right to drink and also conditional right to irrigate his lands.

 

The water used for irrigating land. A person is entitled to dig a canal from the river to irrigate his lands, provided it is not detrimental to the interests of others. In case of dispute, there are explicit instructions for courts to adjudicate.

 

The water of wells, springs, streams, rivers and rainfall. Lands irrigated by water of such natural sources are subject to ushr.

 

Things which are estimated by linear measurement, such as a yard of cloth.

 

The slave whose owner has granted him permission to engage in trade.

 

The mineral deposits which are hidden in the earth and their excavation requires much labour such as gold, silver, oil, gas, etc.

 

The mineral deposits, such as salt, graphite, etc., which are on the surface of the earth and do not involve much labour in excavation.

 

Dinars minted by the Fatimides in Egypt and in Syria.

 

Something carried. Tech: In the Abbaside period, taxes collected from the provinces and carried to the central treasury as against musabbab; taxes assigned to the provinces or to certain claimants against central treasury.

 

deprived, bereaved. Tech: A poor man who has been deprived of means of sustenance and requires help for personal maintenance. The Quran speaks of the share' of the mahrum in the wealth of the rich.

 

An ancient Arabian game of chance played with arrows without heads and feathering, for stakes of slaughtered and quartered camels. Tech: It came to be identified for all types of gambling.

 

Public treasury in fourteenth century Muslim Spain.

 

Things which were ordinarily sold by measurement of capacity, such as wheat and barley. See also al-mauzunat.

 

Tax, more particularly excise or sales tax. See also sahib al-maks.

 

Wealth. Tech: Something which can be hoarded or secured for use at the time of need. There are three attributes of al-mal: that it must have some value, that it must be a thing the benefit of which is permitted under the Islamic law and that it must be possessed. It is of two kinds in respect of form: ai-mal al-batin (hidden) and al-mal al-zahir (apparent). But in respect of ownership it is classified into ai-mal al_ammah (which has no specific owner) and al-mal al-khassah (which is owned by someone).

 

Relating to the law of zakat, it is the definite property ';"which has a bodily existence as opposed to al dain, the payment of which attaches a liability to a person as a result of a transaction or a loan or as damages for property destroyed.

 

Non-apparent wealth. Tech: That type of wealth which cannot be assessed or inspected by the zakat collector on the basis of any external evidence except that the owner chooses to disclose it. It includes, primarily, ornaments and cash holdings, etc.

 

Relating to the law of zakat, it is a property which has slipped out of one's hands with little chance of recovery, such as slaves lost, fugitive or gone astray; property fallen into sea or river; property usurped when there is no evidence to prove it. It also applies to all such property for which the owner despite possessing the title cannot derive benefit out of it or does not have actual possession or control of the property.

 

Absent cash, capital not immediately available fo.r use. Tech: Relating to the law of mufawadah partnership, no partnership can be valid with al-mal al-ghaib. AI-mal al-hadir (ready cash) is a necessary condition for a lawful partnership agreement.

 

Ready cash. See al-mal al-ghaib.

 

The commission or pay of the jahbadh for various functions performed by him. They were charged to the public (by collecting excessive taxes) or to the government by deducting from the tax proceeds.

 

A large amount of wealth. Tech: The quantity of wealth on which zakat is levied.

 

Relating to the law of zakat, the property which was not in one's possession earlier but came into one's possession during the assessment year. Examples are monthly salary, wages, bonus, gratis receipts, etc. There is a controversy in the law about applicability of zakat on it.

 

Wealth that has a commercial value. It is possible that certain wealth has no commercial value for Muslims (ghair mutaqawwam) but is valuable for non-Muslims. Examples are wine and pork.

 

The wealth that increases by procreation or profit or has the potential to grow. Examples are livestock, cash, stock-in trade and minerals.

 

Acquisition, property. Tech: Wealth which one. holds for deriving benefits out of it rather than for trade.

 

Relating to the law of zakat, it means goods lying dormant such as in the ownership of an orphan.

 

Apparent wealth. Tech: The type of wealth that can be inspected, examined and assessed by the zakat collector. Examples are livestock, agricultural produce, stock-in-trade and minerals.

 

Relating to the law of zakat, the cattle which are fed at the stable of the owner.

 

Donation of a property with the permission to derive benefit from its yield without transferring the ownership to the donee. Examples are: donating a date-palm tree with permission to eat the fruit or donating a cow with permission to drink its milk. The property in question remains in the ownership of the donor. It is an important value of the Islamic economy.

 

Advantage, yield. Tech: Relating to the institution of al-waqf, it refers to the usufruct of the trust availed of by the beneficiaries. In case of fai lands which were a trust of the Muslims, the peasants were entitled to the manafah of the lands on the payment of rent (khara)).

 

A measure equivalent to two ratl Iraqi or 815.39 grams.

 

Beneficent, kind. Tech: Relating to infaq, one who recounts his charity and teases the recipient by it.

 

Lit: Objectives of the shariah. Tech: It refers to the protection of life, religion, reason (aql), progeny and property. These objectives also define basic needs in an Islamic economy. See also al-daruriyat al-khams.

 

Blood money. Tech: Mutual insurance 'societies' of preIslamic Arabia constituted to collect a common fund known as al-kanz to insure against damages and tort. If and when a member of the group committed a tort and had to pay damages, this common fund came to his rescue. For instance, the damages for culpable homicide were one hundred camels. Few individuals could pay it. In such cases the kanz of the tribe was employed to pay for the damages. The members of the tribe were known as aqilah. The Prophet retained this practice. See al-aqila

 

A measure of distance equivalent to 2 barid, 8 farasikh or 44.352 kilometers.

 

A financing technique adopted by commercial banks in Pakistan, applied, usually, for the encashment of bills of exchange. A person who needs short-term financing against a bill is provided finance after deducting a certain amount from the face value. The deduction is done at a fixed rate and is known as mark-down.

 

A financing technique adopted by commercial banks in Pakistan. It is an agreement in which the bank agrees to finance the purchase of equipment or a commodity for its client at a price which includes a fixed pre-agreed profit for the bank.

 

Eight heads of expenditure mentioned in the Quran about zakat, which are fuqara, masakin, zakat-collectors, those whose hearts have been reconciled, on freeing of slaves, debtors, fi sabil Allah (in the cause of Allah), and the wayfarers (Quran 9:60).

 

Relating to the law of zakat, it refers to animal properties.

 

Lit: Utility, benefit. Tech: Exigencies which necessitate protection of faith, life, progeny, property and rationality. Al-maslahah is the basic consideration in the formulation of law in slam. Those acts or omissions which cause harm to the above named five masalih are known as al-mafasid and enactment against them becomes obligatory in the Islamic shariah.

 

Faisal Islamic Bank, Bahamas. Incorporated on 9 December 1982. A subsidiary of DMI. Began operations on 1 February 1984. Paid-up capital, US$2 million.

 

Faisal Islamic Bank, Bahrain. A subsidiary of DMI. Incorporated on 14 July 1982. Authorized and paid-up capital, US$30 million.

 

It has a number of usages all of which are relevant for Islamic economics: enjoyment, object or delight, necessities of life, property, merchandise, household effects. The Quran refers to worldly possessions that are available for a very short span of time as compared to the pleasures of the Hereafter, which are everlasting. The Quran uses ai-mala to denote insignificance of this world as compared to the life after death. (Quran 3:14, 3:185,3:197,4:77,16:117).

 

Implement, utensil, instrument. Tech: Small household articles which neighbours or friends borrow from each other for temporary use without any consideration. Lending of maun is known as ariyah and has been recommended in the shariah as a virtuous act.

 

Things which are ordinarily sold by measurement of weight, such as gold"or silver. See also al-makilat.

 

See al-ard al-mawat.

 

Relating to the musharakah financing by banks in Pakistan, it is the rate above which the banks cannot receive anything as their share of profit on the finance provided by them. It is determined in the following manner: ( a) averaged-out rate of profits on PLS (Profit-Loss Sharing) longest term deposits paid by various banks. (b) Rate of service charges determined by the State Bank of Pakistan. Total of (a) and (b) above would be the maximum rate of profit.

 

Tech: Extra-shariah taxes imposed on a group of people jointly. This practice has been disapproved by jurists.

 

Mile. Tech: It is equal to 4000 dhira, one mile plus 240 yards or 1,848 meters.

 

Expression of the connection between a man and a thing which is under one's absolute power and control to the exclusion of control and disposition by others. But the milk of individuals or society is regulated by the shariah since absolute milk belongs to God.

 

Public property such as roads and large waterways. They are also called ghair mamluk (not owned), and can be used by an individual so far as it does not involve navigation or the use does not deprive the shareholders of their water supply. Likewise, roads must not be blocked by the erection of buildings.

 

Perfect ownership. Tech: Complete and total ownership of an asset.

 

Relating to the musharakah financing by bankers in Pakistan, it is the rate below which no financing is provided by the banks, arrived at in the following manner: (a) Averaged-out rate of profit paid on PLS (profit-loss sharing) saving accounts by various banks. (b) Rate of service charges determined by the State Bank of Pakistan. Total of (a) and (b) would be the minimum rate of profit.

 

Kharaj lands in the Ottoman empire. Also known as amiri aradi, i.e., lands belonging to the amir.

 

Measuring or surveying land, taxing for unit of area. Tech: During the Muslim period, one of the bases for land taxation used to be ala al-misahah, that is, tax calculated on the amount of land tilled, keeping in mind the location and fertility of the soil. The term was used to express two related meanings. First, tax assessed on the basis of measurements of land independent of any fluctuations in 'the area tilled or crop produced, assessed for the lunar year and paid, quite frequently, in monthly installments. Second, land-tax assessed on the basis of area sown, leaving out fallow and waste land, assessing different rates for different crops, for the solar year.

 

Used in the law of zakat for a person who has been rendered helpless or invalid by sickness, old age or war and is either unable to work or can not earn enough to maintain himself and his family.

 

Fungibles. Tech: Muslim jurists have distinguished between things that are distinguishable and those that are indistinguishable. For example, different units of wheat, corn or grapes are not distinguishable. If a person borrows 1 kilogram of wheat, he must return 1 kilogram of wheat, but it is not possible precisely to distinguish between the wheat borrowed and the wheat returned. The two are indistinguishable, or mithli. See al-qimi for distinguishable things.

 

A weight for measuring commodities, equivalent to 4.5 grams.

 

A weight to measure gold, equivalent to 4.25 grams.

 

A contract of mudarabah in which the capital owner provides capital in cash (ain).

 

fixed sum of money or anything else usually paid in advance.

 

An alternate term for al-muaJarah.

 

Those whose hearts have been reconciled. Tech: Used in the context of zakat, one of the eight heads of accounts on which it can be spent. In the days of the Prophet, the zakat fund was also expended on those who could be a potential danger to Islam, who have been converted to Islam and needed economic support or who could go back to kurfr if not supported. All schools of jurisprudence agree that this head of account is still alive and the Islamic state can appropriate zakat for, it. Those who receive zakat on this account can be Muslims or non-Muslims, rich or poor, nationals or aliens.

 

Economic transaction. Tech: Lease of land or of fruit trees for money, in kind or for a share of the crop.

 

A tenure in which the orchard owner gives his fruit trees to a worker who irrigates the soil with buckets, by water-wheel or in some other way; fecundates the trees; and fulfills all the requirements of tillage until the time when the fruit becomes sound enough to be sold. In exchange, the worker gets one-half, onethird or one-fourth of the fruit.

 

Selling the fruit on trees for a period of one, two or three years, even before the fruit has appeared.

 

Agricultural contract in which seeds and other things are provided by the landlord and the tenant receives a mere sixth or seventh part of the produce.

 

Things and advantages which are open to everyone and cannot be exclusively appropriated by anyone. Examples are air, light, fire, grass, seawater, rivers, streams, public roads and grazing fields for the cattle.

 

A form of business contract in which one party brings capital and the other personal effort. The proportionate share in profit is determined by mutual consent. But the loss is borne only by the owner of the capital, in which case the entrepreneur gets nothing for his labour. The financier is known as rabb ai-mal and the worker or entrepreneur as mudarib. As a financing technique adopted by Islamic banks, it is a contract in which all the capital is provided by the Islamic bank while the business is managed by the other party. The profit is shared in pre-agreed ratios, and loss, if any, unless caused by the negligence or violation of the terms of the contract by the mudarib, is borne by the Islamic bank. The bank passes on this loss to the depositors.

 

See qirad market.

 

A financial instrument devised by Islamic investment companies to mobilize funds for investment. A mudarabah certificate can be for a specific purpose or for a general purpose. The former is related to financing of specific projects and matures only on the completion of the project. The latter can have a specific or indefinite duration. Both the types can be issued in negotiable form either registered or to the bearer. The mudarabah certificates can be distributed in an underwriting or sales effort for a fixed term or can be continuously available or be available on a periodic basis.

 

Unconditional mudarabah. Tech: A mudarabah which does not bind the entrepreneur about the place, time, season, commodities, credit or techniques of trade. These matters are left to the option of the entrepreneur. The mudarabah contract defines' merely the profit-sharing ratio.

 

Lit: Conditional mudarabah. Tech: A contract of mudarabah in which certain conditions like place, season, commodities, credit and techniques of trade are stipulated by the rabb al-mal.

 

Normally issued by the state, they are an instrument for obtaining funds from the private sector on the basis of mudarabah. The state issues a share certificate, indicating the price, the period and the terms of the contract. The funds thus collected can be invested in the profit-yielding projects so that the state can share profit or loss with the public.

 

In a mudarabah contract, the person who acts as entrepreneur. See also sahib al-mal and rabb al-mal.

 

A weight or measure. Tech: According to Hanafites it is equivalent to two ratl, 1.032 liters or 815.39 grams. According to other jurists it is equivalent to 1- 1/3 ratl, 0.687 liters or 543 grams.

 

Something which can be stored. Tech: Relating to riba al- fadl, the Malikites apply the concept of riba al-fadl to items which are both muqtat (quality of being a food item) and muddakhar (storable) .

 

See shirkah al-mufawadah.

 

A contract for planting trees. Tech: A contract in which a landlord gives his bare land to a worker to plant fruit trees. It may be done in two lawful ways: first, the landlord bears all expenses of transplantation of twigs, fixtures, of date stones and pruning of branches and twigs; he hires a worker tenant to plant the tree and to work and irrigate it for a certain fixed period until the plant yields fruit-in exchange for this work, he gets fixed, definitely known wages or a certain piece of that land, i.e., he becomes co-owner of the trees. Second, the tenant is made responsible for all these expenses including plantation of the fruit trees, its mending, irrigation, etc., and in exchange he obtains a certain stipulated share-one half, one third, one fourth, or more or less of the fruit crop. In that case the worker can have no right over the land. The period for this tenancy is not fixed and all other terms and conditions of the contract of muzara'a apply in this tenure. This term is used by Ibn Hazm.

 

It denotes a deal involving lease of land against corn and/or buying of a crop still in growth when grains are in the ears in exchange for corn.

 

One who fences a dead land for the purpose of developing it.

 

One who stockholds commodities (especially food grains) with the intention of causing a shortage in the market and pushing up the price.

 

Head of al-hisba department during the Muslim reign. His main responsibilities were (a) enforcing the proper behavior (maruf) and preventing the improper (munkar), (b) supervision of markets, (c) helping the state in keeping the flows of supply and demand unobstructed. He had wide executive and juridical powers. The muhtasib was often a scholar of the shariah.

 

Mutual kindness. Tech: Informal partnership prevalent during Fatimade and Ayubide Egypt.

 

The slave who obtained from his master the privilege of manumission on payment of a fixed price. Such slaves had the right to engage in trade and buy and sell in order to earn the price of their freedom but they did not own goods completely.

 

An agreement to lease land on rent for cultivation with the condition to share the produce in a given ratio. In some cases the agreement provides for the supply of seed by the landowner but it is not always the essence of the contract.

 

Sale of fruit or crop before it has ripened.

 

A valuer for estimating crops when still on the root, employed by the tax departments during the Abbaside period.

 

A wagering contract or a risky contract. It applies to all those contracts which may bring a reward without any human effort or to contracts which involve non-business risks.

 

See bai al-mulamasah.

 

A measure equivalent to 2.5 sa. According to Hanafites one mug'am is equal to 8.154 kilograms or 8.425 litres, while other jurists consider it equal to 5.43 kilograms or 6.87 litres.

 

Ushri lands in the Ottoman Empire.

 

A mudarabah contract which has more than one specific purpose or objective.

 

See bai al-munabadhah.

 

An agreement in which a person leaves his commodities (stock In-trade) with another person so that the latter may sell them. The profit is for the owner of the commodities. Also used as an alternate term for mudarabah.

 

In a contract of mudarabah, one who furnishes the funds. Also termed as rabb al-mal.

 

Partnership. Tech: A contract of partnership to till land for sharing the produce. The classical example is that of the Prophet's contract with the Jews of Khaiber. He agreed to share the produce of the land with the Jews, retaining them as tillers of the land.

 

Accounting, clearing, settlement of accounts. Tech: Used in riba-free banking. The operation of current account deposits is governed by the juridical principle of muqassah, which denotes that the original deposit was a loan to the bank and its drawal is a loan of the bank to depositor. Both the loans cancel each other (muqassah).

 

A system of taxation followed by Umayyads and Abbasides. It referred to a procedure for unlimited collective tax payment which was payable by a few persons and constituted income for the state and the caliph. It was used in a number of ways: (a) a fixed yearly sum of money payable according to agreement and without regard to the prosperity of the cultivator or the population; (b) an annual due paid for a fief; (c) a tax paid by allied nations and provinces as a tribute on condition of retaining a certain autonomy; (d) dues paid by the one who undertakes the tax management of an entire province or a major area. In the Ottoman empire the system was classified into three categories: Timar, Emanet and Iltizam. The first form was similar to the fief system of European feudalism, whereby the feudal lord kept the income and in return was obliged to perform certain services for the state. The second form constituted income from properties administered on a trustee basis, which was handed over to the state in return for a reward. The third form was tax tenure whereby the tax tenant (am in) was allowed to keep a part of the taxes for himself and had to give the rest to the state.

 

See bai al-muqayadah.

 

Something which has the quality of becoming a food item. Relating to riba alfadl, the Shafiites apply the above concept to food items (al-muqtat) only.

 

See bai al-murabahah.

 

Bet by two parties on the happening of an event in the future so that one will pay the other a certain amount if the event takes place; otherwise, the latter will pay the former. This is a form of gambling.

 

Selling by counterpoising gold for gold or dirhams for dirhams.

 

Manliness, valour, sense of honour, generosity. Tech: Spending on the hospitality, honour and gifts of the well-to-do and respectable people. This is in contrast to sadaqah, which is meant for the poor and the needy.

 

A category of common land (hima) in early Arabic society where cattle could graze. The village owned it collectively so that its residents could sell or develop it as an owner of a private property. It was possible to parcel it out to single members of the community who might cultivate it.

 

Taxes assigned to certain claimants or provinces as against mahmul, taxes collected from provinces and carried to the central treasury .

 

Confiscation of property by the state without compensation.

 

A contract in which the owner of the garden shares its produce with another person in a pre-determined ratio in return for latter's services in irrigating the garden.

 

The animal which is not milked and its milk is left in the udders. Tech: Used in a sales contract whereby the seller of milk cattle keeps the cattle un-milked for a day or so and deceives the buyer by milking a larger quantity in his presence than is usual for the cattle.

 

See bai al-musawamah.

 

Relating to the nisab of zakat, a cow in her third year. This is also used for two-year-old sheep and goats.

 

A financing technique adopted by Islamic banks. It is an agreement under which the Islamic bank provides funds which are mingled with the funds of the business enterprise and others. All providers of capital are entitled to participate in management, but not necessarily required to do so. The profit is distributed among the partners in pre-agreed ratios, while the loss is borne by each partner strictly in proportion to respective capital contributions.

 

Common; undivided. Tech: Mixing up of the proprietary rights of more than one person in a thing, such as injoint ownership where each co-owner has a right until all particles of the property are divided.

 

Tax-collector in fourteenth century Muslim Spain. He used to be responsible to one of the secretaries (katibs) of the sultan called sahib al-ashghal.

 

Relating to the administration of iqta in sixteenth century India, the mushrif was a treasury officer who authenticated accounts and other writings.

 

See al-mustakbirin.

 

Quranic term for 'haves' in the society. The Quran comments on the unjust distribution of economic power which results in the emergence of two distinct classes in the society: al-mustakbirin and al-mustadafin. The former are economically powerful and corrupt people who oppress the weaker sections of society. The latter consist of economically weak and oppressed people who remain contented with their fate.

 

In Abbaside Iraq, an official of the tax department who worked for the jahbadh.

 

Loose, flowing (hair), friendly, affable. Tech: A buyer who does not haggle over the price; also a buyer who is unaware of the actual price of a commodity and is willing to buy at the price quoted by the seller. Some jurists have also included in this category those farmers who bring their produce to the market but, being unaware of the market conditions, sell their produce at a price lower than the prevailing rate.

 

See diwan aI-mal.

 

One who undertakes the contract of qabalah or tax-farming, in which a contractor pays the ruler an agreed amount, collects taxes from the people and retains the difference. In modern parlance, it was privatization of tax collection, a tyrannical system. See al-qabalah.

 

Close relationship. Teeh: Informal partnership during Fatimide and Ayubide Egypt.

 

See bai al-muzabanah.

 

It is a contract in which one person agrees to till the land of the other person in consideration for a part of the produce of the land.