The Role of Islam in Saving the Ummah from the Economic Recession

There is a verse in the Qur'an which reads:

وَاِذَآ اَرَدْنَآ اَنْ نُّهْلِكَ قَرْيَةً اَمَرْنَا مُتْرَفِيْهَا فَفَسَقُوْا فِيْهَا فَحَقَّ عَلَيْهَا الْقَوْلُ فَدَمَّرْنٰهَا تَدْمِيْرًا ١٦

And if We want to destroy a land, then We command people who live in luxury in that country (in order to obey Allah), but if they commit disobedience in that (land), then it is fitting for them to say (Our punishment), then We will completely destroy (the land). [QS. Al-Isra (17): 16]

Why did Allah سبحانه و تعالى make the rich as a cause the destruction of a country? In this article, the answers to these questions will be described.

The term recession is used to describe the breakdown and disruption of the capitalist system over a period of time. The causes of an economic recession, including:

• Economic shock this is due to weak purchasing power due to financial difficulties.
• Inflation Inflation is a condition of rising prices of goods and services during a certain period. Excessive inflation weakens people's purchasing power. On the other hand, the production of goods and services will decline.
• High interest rates etc [reported from CNBC Indonesia]

Recession covers several sectors of the economy on a national scale, it can even occur in all sectors of the economy. In a recession, the negative impacts that may occur are a decrease in the level of profit (profits), layoffs of workers (PHK), widespread unemployment, low balance of wages in society as a whole, widespread crime, and many other negative impacts.

The existence of an approach to reduce economic damage, does not necessarily eliminate the crisis that is closely related to the capitalist system, where crises and recessions are always "circular". This happens not in nature accidental! Nor does it come from outside the capitalist system itself, but rather contained in the system. Please look at the history of capitalism where market forces have been unable to strike a fundamental balance in the system.

The invisible hand (invisible hand)[1] unable to save the repeated market crises, even at the current stage of capitalist development, where complete freedom of capitalization is released!

Come on, it's our time back to the shari'ah of Allah سبحانه و تعالى which will not be lost by the times, the shari'ah that is in accordance with all customs and places, the shari'ah that comes from All-knowing Lord.

Here are some critical views from the side of Islamic Shari'ah on the issue of economic recession.

1. Productive Investment

This is the call of the Prophet that funds can be invested productively, so that wealth does not run out just because it is consumed by zakat.

 روى الدارقطني، مرفوعاً إلى النبي صلى الله عليه وسلم : (مَنْ وَلِيَ مَالَ الْيَتِيْمِ فَلْيَتَّجِرْ بِهِ، وَلَا يَتْرُكْهُ حَتَّى تَأْكُلَهُ الصَّدَقَةُ). ولما روى مالك في الموطأ، عن عبد الرحمن بن القاسم عن أبيه أنه قال : (كَانَتْ عَائِشَةُ تَلِيْنِيْ وَأَخًا لِيْ يَتِيْمَيْنِ حَجْرِهَا فَكَانَتْ تُخْرِجُ مِنْ أَمْوَالِنَا الزَّكَاةَ). والقول بوجوب الزكاة في مال كل منهما هو قول علي وابن عمر وجابر وعائشة والحسن بن علي، حكاه عنهم ابن المنذر.

This is based on the hadith narrated by Ad-Daaruquthniy marfuu' to the Prophet: 'From Amar Ibn Shu'aib, from his father, from Abdullah Ibn Umar that the Messenger of Allah said: "Whoever takes care of an orphan who has wealth, he should trading property it's for him, and don't let it so that it is eaten by zakat.“[2]

 And also based on the hadith narrated by Maalik (bin Anas) in Al-Muwaththa ':

'Ayesha is the one who takes care of me and my orphaned brothers. She ('Aisyah) issued zakat from our assets."[3]

If the Messenger of Allah ordered the kafil (orphans caretaker) to invest in orphan funds, so what about one's property? Of course it is more important to invest which will be more useful and profitable and in the end there will be assets that will be issued from these profits in the form of zakat.

If someone who has property does not invest and leaves it idle, it just piles up, then there is a community right in it, namely zakat, which in this case is a form of "penalties or consequences for hoarding goods“.

2. The Hoarding of Assets is Prohibited

Islam has emphasized the campaign about hoarding wealth, freezing and abandoning it in carrying out the mission of economic life. Islam encourages its people to manage their wealth by investing or working on these assets for the benefit of the wider community.

There are two verses of the Qur'an that severely threaten the hoarders of mischievous wealth, Allah says:

۞ يٰٓاَيُّهَا الَّذِيْنَ اٰمَنُوْٓا اِنَّ كَثِيْرًا مِّنَ الْاَحْبَارِ وَالرُّهْبَانِ لَيَأْكُلُوْنَ اَمْوَالَ النَّاسِ بِالْبَاطِلِ وَيَصُدُّوْنَ عَنْ سَبِيْلِ اللّٰهِ ۗوَالَّذِيْنَ يَكْنِزُوْنَ الذَّهَبَ وَالْفِضَّةَ وَلَا يُنْفِقُوْنَهَا فِيْ سَبِيْلِ اللّٰهِ ۙفَبَشِّرْهُمْ بِعَذَابٍ اَلِيْمٍۙ ٣٤ يَّوْمَ يُحْمٰى عَلَيْهَا فِيْ نَارِ جَهَنَّمَ فَتُكْوٰى بِهَا جِبَاهُهُمْ وَجُنُوْبُهُمْ وَظُهُوْرُهُمْۗ هٰذَا مَا كَنَزْتُمْ لِاَنْفُسِكُمْ فَذُوْقُوْا مَا كُنْتُمْ تَكْنِزُوْنَ ٣٥

O you who believe! Truly many of the pious (Jews) and monks (Christians) they actually eat people's wealth in a false way, and (they) hinder (humans) from the path of Allah. And those who store gold and silver and do not spend them in the way of Allah, then give them good news, (that they will have) a painful punishment.

Remember) on the day when gold and silver are heated in the Hellfire, then their foreheads, sides and backs will be ironed (as it is said) to them, "This is your treasure that you keep for yourself, so feel (the result of) what you keep it." [QS. At-Taubah(9):34-35]

Hoarding wealth in the Islamic concept is not paying zakat and withholding the property. However, if the obligations of the property have been fulfilled, then the property is no longer considered hoard. This obligation also includes zakat infaq. Money does not come out of hoarding circles unless its obligations have been fulfilled, in the form of zakat, excess money from necessities, living, alms, and investment maintenance costs.

Islam does not stop fighting hoards with prohibitions and blasphemy. In fact, Islam took practical steps that had an influence in moving hidden treasures and played a role in restoring the economy.

This step is reflected in the obligation of zakat. This has a real effect on efforts to manage assets and capital investment. In addition, the Shari'a also wills to invest the property of a Muslim from his "profit". Thus, the capital can develop and be sustainable.

In modern times, we have seen the dangers of hoarding and how it can lead to economic stagnation and prevent money circulation activities. In fact, money circulation activity is important to restore economic life in society. Because holding money is tantamount to undermining the function of money itself, namely to expand production and provide jobs and employment facilities.

3. Distributing wealth (Zakat) to people who have debts

Allah سبحانه و تعالى says:

۞ اِنَّمَا الصَّدَقٰتُ لِلْفُقَرَاۤءِ وَالْمَسٰكِيْنِ وَالْعٰمِلِيْنَ عَلَيْهَا وَالْمُؤَلَّفَةِ قُلُوْبُهُمْ وَفِى الرِّقَابِ وَالْغٰرِمِيْنَ وَفِيْ سَبِيْلِ اللّٰهِ وَابْنِ السَّبِيْلِۗ فَرِيْضَةً مِّنَ اللّٰهِ ۗوَاللّٰهُ عَلِيْمٌ حَكِيْمٌ ٦٠

Indeed, zakat is only for the needy, the poor, the amil zakat, those who are softened in their hearts (converts), for (liberating) slaves, for (freeing) those who are in debt, for (jihad) in the way of Allah and for those who on the way, as an obligation from Allah. Allah is All-Knowing, All-Wise. [QS. At–Taubah(9):60]

Included in the distribution of zakat are those who are in debt, i.e. those who have debts and are unable to pay them, even being imprisoned because of it, for example, and "they are not sinners"“.

Likewise, people who are in debt to perform public services, such as people who reconcile others and then cause them to be in debt. It is even recommended to pay off debts from these people even if they are able, as an incentive to do good deeds and improve relations between humans.

Distribution of zakat, infaq, or alms also includes people whose place of business has experienced a disaster (such as a fire), or whose goods have sunk in the high seas, or whose factory has been damaged, as well as those who have experienced poverty who were previously rich. Thus, it is hoped that they can compensate for property losses, cover debts, and ease the burden of difficulties, and so that they can make efforts for survival.

The national economy has and will benefit from the utilization of these idle funds into productive funds. In addition, the income generated by individuals in the pursuit of professions and businesses through zakat gharim (people who are in debt) generate additional demand, meaning that an increase in spending will result in an increase in production and reduce economic stagnation.

4. Time of Zakat

The Messenger of Allah did not specify a specific time or day to issue zakat, in fact he (sallallaahu 'alaihi wa sallam) requires zakat once a year (reaching haul), because the use of money is different for each person. It could be that the assets that reach the nisab are still used in a month, or two months or in the following months.

In other words, the effect of zakat on reducing economic recession continues throughout the year and will continue until the recession is no longer a recession.problem“.

In the practice of distributing zakat, it can be given limited to one of eight categories (mustahiq zakat) and can also be given to individuals.

Imam Ibn Qudamah Al-Maqdisy said:It is permissible to limit one group of eight groups who are entitled to receive zakat, it is also permissible to give it to one person.”[4] 

Imam Ibn Rushd also said that Imam Malik and Imam Abu Hanifa are of the opinion that it is permissible to pay zakat for one group (who are entitled to receive zakat) or more, this is according to need.[5]

Such an approach would improve the relationship between the strength of aggregate supply demand (total) and aggregate demand (total). Supporting all classes of people affected by the recession will reduce crime caused by the recession and these forces will be able to turn things around, create job opportunities, and recover markets from recession.

وإذا كانت موارد الزكاة غير قادرة على مجابهة حال الركود الاقتصادي، فإن بعض الفقهاء لا يرى بأساً في أن يخرج المسلم زكاته قبل حلها بثلاث سنوات.

If zakat resources are not able to overcome economic stagnation, jumhur scholars allow paying zakat before one year has passed (haul), even the previous two important years had reached the nisab.

This is because zakat is an obligation for assets, so it can be hastened as it is permissible to hasten the payment of debt before maturity. And this is a strong opinion.

This is based on the hadith that the uncle of the Prophet , namely Abbas bin Abdul Muthallib رضي الله عنه had hastened the payment of zakat before the haul.

Ali bin Abi Talib a said,

أَنَّ الْعَبَّاسَ سَأَلَ رَسُولَ اللَّهِ -صلى الله عليه وسلم- عَنْ تَعْجِيلِ صَدَقَتِهِ قَبْلَ أَنْ تَحِلَّ فَرَخَّصَ لَهُ فِى ذَلِكَ

Abbas once asked Rasulullah about the law of submitting zakat before haul. Then he gave light on it.[6]

In another narration, also from Ali رضي الله عنه , that the Prophet once told Umar رضي الله عنه ,

إِنَّا قَدْ أَخَذْنَا زَكَاةَ الْعَبَّاسِ عَامَ الأَوَّلِ لِلْعَامِ

I have withdrawn the zakat of Abbas last year for this year.[7]

After ad-Darimi mentioned the above hadith, he said,

آخُذُ بِهِ وَلاَ أَرَى فِى تَعْجِيلِ الزَّكَاةِ بَأْساً

I take this opinion, and I think it is permissible to hasten zakat.[8]

It can be concluded that zakat payments can be accelerated if people really need money, especially those affected by the economic crisis. No doubt it aims to maintain economic stability and reduce recession. Zakat is an effective way to distribute wealth among members of society in a fair way, because zakat is taken from the rich and given to the poor.

5. Invite people to repent, return to Allah.

The most important thing In the context of saving the people in general from any calamity, it is repent and return to Allah سبحانه و تعالى

Allah سبحانه و تعالى says:

ظَهَرَ الْفَسَادُ فِى الْبَرِّ وَالْبَحْرِ بِمَا كَسَبَتْ اَيْدِى النَّاسِ لِيُذِيْقَهُمْ بَعْضَ الَّذِيْ عَمِلُوْا لَعَلَّهُمْ يَرْجِعُوْنَ

Damage has been seen on land and at sea due to the work of human hands; Allah wants them to feel some of the (results of) their actions, "so that they return (to the right path)". [QS. Ar-Rum (30):41]

If munkar has appeared in society and the spread of corruption, abomination, immorality, usury, and adultery, then Allah انه الى will bring to them all kinds of suffering which can be in the form of drought, soaring prices, and so on, there will be no calamity except that the cause is a sin. and sins.

وَمَآ اَصَابَكُمْ مِّنْ مُّصِيْبَةٍ فَبِمَا كَسَبَتْ اَيْدِيْكُمْ وَيَعْفُوْا عَنْ كَثِيْرٍۗ

And whatever misfortune befalls you, it is because of what your own hands have done, and Allah سبحانه و تعالى forgives many (of your faults). [QS. Ash-Shura(42):30]

O servants of Allah, neither calamity nor calamity descends except because of sin, and it is not raised except because of repentance. Do more istighfar.

Allah سبحانه و تعالى says:

فَقُلْتُ اسْتَغْفِرُوْا رَبَّكُمْ اِنَّهٗ كَانَ غَفَّارًاۙ ١٠ يُّرْسِلِ السَّمَاۤءَ عَلَيْكُمْ مِّدْرَارًاۙ ١١ وَّيُمْدِدْكُمْ بِاَمْوَالٍ وَّبَنِيْنَ وَيَجْعَلْ لَّكُمْ جَنّٰتٍ وَّيَجْعَلْ لَّكُمْ اَنْهٰرًاۗ ١٢

So I said (to them), "Seek forgiveness from your Lord, verily, He is Forgiving.

Surely He will send down heavy rain from the sky on you.

And He will increase your wealth and your children, and make gardens for you and make rivers for you.” [QS. Noah(71):10-12]

Reference

Bulughul Marom, Ibn Hajar, Publisher: Daar Ibn Hazm.

CNBC Indonesia “What is an Economic Recession? Definition, Causes & Impact”, 07-15-2022.

[1] The invisible hand is a term in economics that refers to the forces that move the market toward equilibrium (balanced position), when there is no intervention whatsoever. The power is completely based on the interaction in between economic actors in the market. Let the forces of supply and demand work which will ultimately result in the most efficient allocation of resources and provide maximum social benefits. [Reported from smartco.com]

[2] The history of Tirmidhi and Daruquthni, the chain is weak. This hadith has a mursal witness according to Shafi'i

[3] Opinions about the obligation of zakat on the property of orphans and the insane are those of Ibn 'Umar, Jaabir, 'Aisyah, and Al-Hasan bin 'Aliy. It was narrated by Ibn al-Mundzir "This is the opinion of the majority of scholars. [Al-Lajnah Ad-Daaimah, Fataawaa Az-Zakaah; collected by Muhammad Al-Musnid, p. 11].

[4]  Al-Mughni, Ibn Qudamah (2/449)

[5]  Bidayatul mujtahid, Ibn Rushd (1/275)

[6]  HR. Turmudzi 680, ad-Darimi 1689 and Hasanan al-Albani

[7]  HR. Turmudzi 681 and Hasanan al-Albani

[8] Sunan ad-Darimi, 5/107

By Ustadz Fakhrur Rodhi Al-hendan, SH