FALLING ECONOMY QUESTION

Assaamualaikmum. It seems that this whole Russia Ukraine war is some type of mechanism used to kill the economists of the world.
With a falling economy and a recession in sight what does Mufti Saheb suggest people invest in to be able to withstand such a recession?

ASSALAMU ALAIKUM
27 Zul Qa’dh 1443 – 28 June 2022

The only safe investment nowadays is gold coins.

Keep the focus on Allah Ta’ala. Make dua for aafiyat.

Was-salaam

A.S.Desai

Mujlisul Ulama of S.A.

this is from the majlis vol 21 number 10 January 2013

Brother in the prevailing circumstances the best investment is gold coins. People who had purchased krugerrands five years ago have earned more than 100% profit when they sold their coins. Coins purchased a couple of years ago for R6000 are worth more than R15,000 today. Gold coins are a clean and fully Shar’i compliant investment.
But on-line gold dealing is not permissible. No other investment pays such huge dividends as gold coins.

from majlis vol 24 number 5 august 2017

ISLAMIC BANKING?
Do not be deceived by the creature called ‘islamic banking’. There is no halaal Islamic banking anywhere in the world. All so-called ‘islamic’ banks are Riba banks halaalized by liberal molvis and sheikhs – scholars for dollars. They dub their riba and baatil transactions with fancy Islamic terminology to dupe the ignorant public. They are in the same category as these evil carrion halaalizing outfits.
Those who have surplus cash, should invest in gold coins to offset the effects of erosion by inflation.

MUSJID FACILITIES FOR WOMEN

Q. Some Ulama in UK have issued the fatwa that it is permissible to establish separate facilities for females at the Musjids for Salaat. They cite Imaam Abu Hanifah (Rahmatullah alayh) and Mufti Taqi Usmani in support. What is Shariah’s ruling?
A. As far as Mufti Taqi is concerned he is person’a non grata. He is a liberal who has lost his Islamic bearings many years ago. He has opened the avenue for the fitnah of immorality and riba with his corrupt fatwas halaalizing pictography and so-called ‘islamic’ banking. Meanwhile, all his halaalizing practices, especially banking fatwas are designed for the dollars. The capitalist bankers pay tens of thousands of dollars for fatwas of permissibility for their riba products.
As far as their citing Imaam Abu Hanifah (Rahmatullah alayh) is concerned, they merely flaunt their jahaalat. They are morons wallowing in ghabaawat. Haafiz Ibn Hajr (Rahmatullah alayh) said that it is only a GHABI (a chap whose brains are densely clogged with nafsaaniyat and worldly objectives) who will have the temerity to claim that it is permissible for women to gatecrash into the Musaajid.
All the arguments of ‘hikmat’ proffered by the legalizers of this Prohibition are spurious excrescences of the nafs. We have elaborately discussed and refuted all their ghutha (rubbish) arguments in seven booklets which are available on our website. It is not permissible to have facilities for females in the Musaajid. The Sahaabah had enacted Ijma’ on this Prohibition, hence no one’s view can ever override this sacred Consensus.

Turkey’s Economic Problems Will Give Conservative Muslims Another PR Challenge

Summary
Turkey’s inflation problem is serious, although it did used to be much worst many decades ago.
Blaming it on the Islamic economic paradigm is flawed because the Turkish government does not adopt, and probably cannot adopt a fully Islamic economic model anytime soon.
The Turkish government and people should brace themselves for an economic recession, but timeless wisdoms can be readily found in the Quran on how to deal with this.
The Scene
Over the past year, the Turkish lira has fallen by circa 28% in value against the US dollar. The trend is even worse when compared to a decade ago: a depreciation of more than 80%.

The official inflation rate in 2021 is over 20%. There are daily price hikes to common goods and services, and that is making life tougher for the Turkish people. Except for the rich, the general masses are experiencing a more difficult time and coming closer to poverty.
There are many factors affecting the depreciation of the lira. But there is one posited factor that you will hear about frequently, and the subject of my article: the “unorthodox” economic theory of Erdogan in reducing interest rates when inflation is high. Some observers have called this phenomenon Erdoganomics.

Conventional economic wisdom goes something like this: raising interest rates during high inflation is needed, because it will make borrowing money more expensive. And as people and businesses borrow less money, they have less money to spend, and that reduces the demand for goods and services. This will dampen the “velocity of money” – the speed at which money circulates through the economy – and that will then halt or reduce the price of goods and services. That way, there will not be too much money chasing the same goods and services, and as such, the problem of inflation is addressed.

Of course, the issue with an interest rate hike is that this will most likely – if not certainly – also cause an economic recession. The problem then is which is the lesser of the two evils: an immediate recession, or continued inflation leading to gradual decline into poverty?

Not to lose track of the purpose of this article, Erdogan justifies his action of cutting interest rates by appealing to Islamic grounds. As he puts it, usury “is the mother of all evil”.[1] So here comes our problem: people – by which I mean the general non-Muslims and even liberal Muslims – will look at this so called Islamic economic tenet on the prohibition of usury and point at its terrible consequences by citing Turkey as their case study. It is this criticism of this Islamic economic tenet which I take issue with, but I am very much open to a critique of the Turkish government – the two are not the same!

The Defence

Firstly, there is no validity to the basis of this complaint because it does not consider the Islamic economic model as a whole; to use Turkey as an example of one is invalid because it does not abide by a complete Islamic economic model. The two biggest contentions are the usage of a fiat currency, and interest-bearing debt as an investment instrument.

Moreover, just because a country is having an economic problem, it does not necessarily mean that their economic tenets are flawed or wrong. The fact is that all governments – regardless of their economic policies, age, or era – face economic problems and recessions. People have short memories: what caused the economic crisis of 2008-9? Pick up any encyclopaedia of your choice and read about recessions going back decades and even centuries ago.

The stories we read of the Madinan era – where stones were tied around stomachs to alleviate hunger – are strong indicators of an economic recession. This is during the time of the Prophet ﷺ, who led the best Muslim government ever to have existed.

Economic adversity seems to be a divine decree; all civilisations are afflicted by it, and this is readily deducible by a quick survey of history. The reason for this is quite simple: there are too many factors outside the control of any government to avoid recessions:

  1. Issues relating to climate, such as droughts,
  2. Disease and pandemics,
  3. Wars,
  4. Sanctions, blockades, and tariffs by foreign antagonising entities,
  5. Last but not least, fiat money must be added to this list.

This takes me to the point about why Turkey is facing such staggering rates of inflation. Firstly, to blame it all on Erdogan is not supported by the data; decades ago, Turkey had a painful experience of high and chronic inflation from 1985 to 2004, which was well before Erdogan; during this time, overtly secular forces were comfortably in power. So much for Islam and the Islamising of Turkey being the cause of all its problems.

In 2001, an independent central bank was established just to fight inflation; the initiative was successful and subsequently led to an economic boom into the country and lifted millions out of poverty.

Source: IMF

But what is the cause of the latest inflation problem?

Here is my summary of the main reasons:

1

The usage of fiat currency. This is by far the most important factor, and the one you will not read about often because popular media does not take exception to fiat currency. When the underlying medium of exchange has no intrinsic value and can be easily and readily manipulated through the increase of money supply, then it should be no surprise we open ourselves up for the possibility of too much money chasing the same too-few goods and services.

The supply of money in Turkey has shot up quite radically over the past decade.

Source: The World Bank – Broad money supply

In a global environment where fiat currency is ubiquitously used, the underlying control of inflation consists of trust in the government to enable valuable goods and services to be produced, so that they can be paid for by other countries. Think about trying to buy something with Zimbabwean dollars. Once confidence tumbles, the value of the fiat currency falls.

Inflation is tricky because it is subject to self-fulfilling prophecy: the expectation of rising inflation causes inflation to rise. Since conventional wisdom requires interest rates to increase when inflation is high, and since the Turkish government is refusing to do that, the appetite for investment in Turkey has fallen; what is the point of investing in a country when your investment will automatically depreciate by more than 20% within a year just due to currency fluctuation? This lack of investment will impede – if not reduce – the goods and services that can be produced, and therefore inflation becomes a bigger problem.

One of the critical flaws of choosing to run an economy with fiat currency is the large degree on which the wealth of the population depends on the government. It is also tied to what other nations think it is worth. This takes me to another point: is that exposure risk really worth the capability of manipulating the domestic supply of money, especially for a government and people who do not subscribe to the norms of the rest of the world? I am reminded of the statement attributed to the French philosopher Voltaire: “Paper money eventually returns to its intrinsic value – zero.”

2

The Turkish economy is a net importer; it brings in sources of energy and intermediate goods. The problem is those goods have seen supply disruption problems and price hikes, and that is passed on to the consumers in Turkey. This problem is actually seen all over the world right now.

3

Emerging market currencies have all depreciated against the dollar recently, and the US Federal Reserve estimates it will reduce its asset purchase programme. This means interest rates in the US will rise, and the money seeking higher interest rates in developing countries will be brought back home to developed countries. This leads to an appreciation of the dollar against emerging market currencies, and the lira is no exception.

4

Trump’s tariffs on Turkish steel in 2018 caused a 20% fall of the lira against the dollar. [2] This effectively made Turkish exports more expensive, and the demand for their goods fell substantially.

There are probably a few more things to add to this list.

Some Thoughts for the Turkish Government and People

Firstly, we need to concede to the reality of economic adversity. The Turkish people should prepare themselves for more economic problems in the near future. When a recession does come, then addressing it fundamentally requires consistently working hard, observing patience, and yet still undertaking investments.

Allah gives us an example of an economic adversity and how it should be handled:

يُوسُفُ أَيُّهَا الصِّدِّيقُ أَفْتِنَا فِي سَبْعِ بَقَرَاتٍ سِمَانٍ يَأْكُلُهُنَّ سَبْعٌ عِجَافٌ وَسَبْعِ سُنْبُلَاتٍ خُضْرٍ وَأُخَرَ يَابِسَاتٍ لَعَلِّي أَرْجِعُ إِلَى النَّاسِ لَعَلَّهُمْ يَعْلَمُونَ (46) قَالَ تَزْرَعُونَ سَبْعَ سِنِينَ دَأَبًا فَمَا حَصَدْتُمْ فَذَرُوهُ فِي سُنْبُلِهِ إِلَّا قَلِيلًا مِمَّا تَأْكُلُونَ (47) ثُمَّ يَأْتِي مِنْ بَعْدِ ذَلِكَ سَبْعٌ شِدَادٌ يَأْكُلْنَ مَا قَدَّمْتُمْ لَهُنَّ إِلَّا قَلِيلًا مِمَّا تُحْصِنُونَ (48) ثُمَّ يَأْتِي مِنْ بَعْدِ ذَلِكَ عَامٌ فِيهِ يُغَاثُ النَّاسُ وَفِيهِ يَعْصِرُونَ (49)

“Yūsuf, O man of truth, explain to us (the interpretation of the dream) about seven fat cows eaten by seven lean (cows), and seven green spikes [of grain] and others [that were] dry – so I may return to the people; perhaps they will know.

“He said: You will plant for seven years consecutively (as usual); but leave your harvest leaves in its spikes except for a little from which you will eat (i.e. you will have seven good years of harvest, so save and be conservative with your consumption in anticipation of bad times to follow).

“Then there will come after that, seven difficult years which will consume what you saved for it, except a little from which you will store (i.e. consume what you saved in the earlier good years except a small amount which you should leave aside for the purpose of seeding the next year’s harvest).

“After that, there will come a year in which the people will be given rain and in which they will press (for olives and grapes).[3]

There are timeless lessons found in this short passage of the Qur’an:

Expect economic downturns in your lifetime. Good times are not perpetual. Similarly, bad times do not last forever either. Thus, you should never be unduly apocalyptic about the future. This is especially important for investors; investing requires a positive outlook of the future, or else it will not yield fruitful results.

Respect wealth (whether it is the harvest, a precious resource, or money), but be indifferent towards it. To create wealth requires hard work; people have to literally toil and spend hours of their daily lives to be economically productive. Therefore, do not let the good times cause you to forget the effort that went into making that wealth. Otherwise, you will end up spending uncontrollably and compromise your future financial security.

At the same time, wealth comes and goes, and consequently do not be obsessed with it. From time to time, you will suffer financial losses when investing – it is simply a part and parcel of the endeavour.

Bad times can last for a significant period. For instance, the famine mentioned here in these verses lasted for 7 years. The Great Depression (1929) lasted for a whole decade. Many of the recessions that followed thereafter lasted for one or two years. History should be used to calibrate our expectations – otherwise short-term thinking can cause misjudgement.

Have the foresight to think about the bad times, and then be competent enough to prepare properly for it. Had the Egyptians consumed all their produce in the good years, they would not have had anything for the bad years. And had they not known how to preserve the produce in the good years, again they would not have had anything for the bad years. Similarly, expect downturns in your life and prepare your budget for when it comes.

Invest even in difficult times, and set yourself up for success for when there is a turn-around. This means that you should not consume everything in the bad years; instead, literally sow your seeds now for the upcoming good years. Therefore, continue to work hard and put capital into your investments, even in bad times, if possible.

Yūsuf عليه السلام was given personal education and insight by Allah to understand and correctly interpret dreams. Although the king himself did not have that insight, nonetheless he was smart enough to recognise the truth when it was spoken. Knowledge is widely available, and as Muslims we have an obligation to continuously educate ourselves. We need to have at least the minimum knowledge to ask the right questions, and correctly judge between a plausible answer from one that is completely wrong.

Economic recessions can even have a cleansing effect in a country, as they lead to the pruning of businesses. Bad businesses die out or are cut down, and new pasture is formed for newer and better companies to grow. If bad businesses are allowed to survive e.g. by government intervention, then bad practices may continue and we will end up with zombie-businesses. This happened during the 1990s in Japan. Having said this, I do advocate for some services to continue to be supported. National services which are for the benefit of society, such as healthcare and infrastructure (both physical and electronic), should be supported receive direct government aid.

There are other points I feel strongly about:

1

An Islamic economy requires the avoidance of interest-bearing debt as an investment instrument. Debt in Islam is wholly reserved as an act of charity, and therefore the lender should not expect to profit from being in the privileged position of loaning money. Therefore, those with money wishing to make a profit should engage in genuine investment where risks are much more equitably shared. Psychologically, the investor has a much stronger urge and interest for the success of the enterprise. That should hopefully lead to better businesses.

As things stand, Turkey – like many other countries – use a tremendous amount of interest-bearing debt for its investment ventures. Such a policy has even had bad historical consequences, e.g. the construction bust of 2018 where debts were not being serviced, resulting in ghost-towns to date. [4] The country needs to wean itself out of interest-bearing debt.

2

Turkey should continue to produce unique goods and services that the world needs and wants. Economically speaking, Turkey is actually in a good place; it has a diversified economy with good exports, an educated populace, and good and conducive demographics for growth into the future.

3

In the short term, I personally do not think raising interest rates is necessarily ‘sinful’, since in cases of necessity prohibited religious injunctions are relaxed:

فَمَنِ اضْطُرَّ غَيْرَ بَاغٍ وَلَا عَادٍ فَإِنَّ اللَّهَ غَفُورٌ رَحِيمٌ

But if one is forced by necessity, without wilful disobedience, nor transgressing due limits, then Allah is Oft-Forgiving, Most Merciful.[5]

It is imperative that a maṣlaḥah/mafsadah (cost/benefit) analysis be carried out which assesses the constraints of the current state, such as living with the problems of fiat currencies.

The pros of increasing the interest rate

1

Avoid runaway inflation. We have a living example of what can happen when inflation gets out of control. In Venezuela, people are literally eating rotting meat just to survive. [6]

The Taliban are the least compromising of people, and even they have not stopped opium production in Afghanistan due to the state of extreme poverty. [7]

2

Reduce the likelihood of a political defeat in the 2023 election. I do not think the younger and poorer Turks will support the Justice and Development (AKP) party if inflation continues to rise.

The cons of increasing the interest rate

1

Implicit and continuous support of the interest-bearing debt investment instrument. This ultimately makes one liable for divine chastisement in this world and the next. I should add that unless the interest rate is zero, lowering the interest rate to even a relatively low amount like 3% does not remove the moral problem for a Muslim. In fact, reducing the interest rate to an attractively low number will increase the uptake of interest-bearing debts, and ironically makes the moral problem even worst.

So in order to avoid usuary, why don’t they make it prohibitively expensive?

This idea has its own problems: all variable-interest contracts will suddenly become extremely expensive and lead to mass bankruptcy. In some way, this will exhibit the exact oppression of usuary which Islam wants to prohibit since the rich will become richer, and the poor will become poorer. This makes me to the next point.

2

The Turkish economy goes into a recession in the short run. If the recession is more painful than just weak purchasing power due to inflation, then I think it could equally lead to the AKP losing the next election.

Source: www.islam21c.com

Notes:

[1] https://www.reuters.com/article/us-turkey-currency-idINKBN1IC1NV

[2] https://data.worldbank.org/indicator/FM.LBL.BMNY.CN?end=2020&locations=TR&start=2009&view=chart

[3] Al-Qur’an, 12:46-49

[4] https://www.theguardian.com/world/2019/jan/28/fate-of-castles-in-the-air-in-turkeys-151m-ghost-town

[5] Al-Qur’an, 16:115

[6] https://www.bbc.co.uk/news/av/world-latin-america-45877524

[7] https://www.bbc.co.uk/news/world-asia-59608474

from:islam21c.com

SHENANIGANS OF AMAANAT INVESTMENT

THE HARAAM SHENANIGANS OF AMAANAT INVESTMENTS

QUESTION ONE

I have invested considerably in the company called Amaanat Investments. Very perturbing and damning information has now been published by someone closely related to Amaanat Investments. See details in the attached exposure. I had invested on the basis of being advised by a senior Aalim. Now I am extremely worried about the income I had received from Amaanat. The profit I had received from them over the years, is it halaal, haraam or mushtabah? If haraam, what should I do according to the Shariah?

ANSWER

Over the years, many people have referred to us regarding investing with this shaitaani company. We had always advised them NOT to invest in this company, nor in any other so-called ‘islamic’ financial institution such as Albaraka Bank, etc.

All these institutions are appendages of Shaitaan. They deal in riba and blatantly faasid and baatil Uqood (business contracts). With massive self-deception and with nafsaani design do they justify their faasid, baatil, haraam Ibleesi dealings seeking support of the liberal, gone astray, Mufti Taqi who has sold his soul to the kuffaar capitalist bankers who pay tens of thousands of dollars for Fatwas of Jawaaz, i.e. for stupid, haraam devilish fatwas to licence their Riba products.

Brother, the income you have earned from this Ibleesi company is HARAAM. The solution is to contribute it to Sadqah without making intention of Thawaab. Then, you will, Insha-Allah, gain Thawaab for having submitted to the Shariah.

QUESTION TWO

Mr.Yusuf Kajee states in his letter of exposure:

“The effort MS Omar is putting to blow this out of proportion can only be seen to earn fees from Amanat, from what I’ve learnt from others and we ask questions: MS Omar has earned R12 million in fees in the last 5 years. I hope for his safety, he has declared his income on financial records with SARS.”

Please comment on this revelation.

ANSWER

Hadhrat Yahya Bin Muaaz (Rahmatullah alayh) who was among the very senior and illustrious Auliya of the initial noble era of Islam, as well as others have said:

“Whoever is perfidious (treacherous) to Allah Ta’ala in secret, Allah will rip off his veil (with which he conceals his haraam) in public.”

If this information is true, then the least we can comment is that we as well as the Muslim community are flabbergasted and dumbfounded at the revelation of the R12 million fees for an attorney in 5 years for merely scanning through some documents and proffering ghutha advice which merely forces the haraam company to sink further into its cauldron of haraam and najaasat.

The type of fees mentioned here also come within the purview of Riba – Riba which drives a Muslim into the pit of shaitaani insanity described by the Qur’aan as Takhabbutush Shaitaan. For those who indulge in Riba, Allah Ta’ala states in the Qur’aan Majeed:

“Those who devour riba do not stand except as one who is (driven to insanity) by the TOUCH OF SHAITAAN.” That is because they say that trade is like riba.”

While the villains – the so-called ‘islamic’ financial institutions – who halaalize RIBA on the basis of stupid fatwas disgorged by the likes of Mufti Taqi, do not declare with temerity that their products are stinking with riba, they nevertheless, do understand deep down their hearts, i.e. if there is still some flicker of Imaan – that their dealings are massive shaitaani deceptions halaalized on the basis of scrap fatwas issued by such ulama-e-soo’ who fit snugly into the pockets of the western kuffaar capitalist bankers.

Insha-Allah, Allah Ta’ala will further expose all the villains associated with the haraam shenanigans of Amaanat Investments.

“Those who deceive Muslims, Allah will disgrace them.”
(Hadhrat Umar Bin Khattaab)

18 Jamaadil Ula 1443 – 18 December 2021

DIMINISHING MUSHAARAKAH?

FROM THE LATEST MAJLIS VOLUME 25 NUMBER 12

Q. Is the diminishing mushaarakah concept valid?
Banks are selling this product as ‘shariah compliant’.
A. Diminishing Mushaarakah is a haraam stupidity. We have written detailed articles on its prohibition. There is no such concept as diminishing mushaarakah in the Shariah. It is a trick by Mufti Taqi Uthmani to render something haraam into halaal.

THE BELOW ARTICLE WAS TAKEN FROM ‘AWAKE’ 2013

DIMINISHING MUSHAARAKAH?
Q. Please comment on the Diminishing Mushaarakah concept. By this agreement a person simultaneously leases and buys the same property from the financier (the bank). The bank purchases the property and leases and sells it to the client. From the monthly rental a sum is deducted as a payment on the property. So each month the client’s ownership increases a percentage while the ownership of the bank decreases by that percentage. At the end of the contract term, the client becomes the sole owner of the property. Is this deal permissible? According to Mufti Taqi Usmaani this deal is permissible.
A. There is no ‘diminishing mushaarah’ concept in the Shariah. Shorn of technicalities and legal terminology, the transaction is simply as follows:
(1) Zaid approaches the bank to purchase a house for him.
(2) The bank agrees to buy the house for him on the basis of the following conditions:
(a) That Zaid gives a written undertaking that he will buy the house from the bank.
(b) That Zaid undertakes to lease the house from the bank, and simultaneously purchase it. Thus this is a double deal in a single contract regardless of the different documents drawn up. It is a deal consisting of a lease and a purchase at the same time.
(c) Zaid will make monthly payments. Part of his payment will be rental and part will be deducted as payment on the purchase price of the house. This is what the fabricators of this contract call diminishing mushaarakah, but in the Shariah there is no such transaction which is a combination of two transactions in a single deal.
(d) with each monthly payment Zaid makes, his ownership increases proportionately, until at the end of the period he becomes the owner of the house. In essence – in reality, Zaid enters into 60 new sale transactions if the repayment period is 60 months. Each month he ‘buys’ a percentage of the house in lieu of the amount deducted from his monthly payment. Thus, in this deal, there is not only two transactions. There are 62 transactions. The first two are the initial purchase and lease agreement, and the 60 are the subsequent monthly acts of purchase.
Contrary to the claim that the promise is not enforceable, it is indeed legally enforceable in terms of kuffaar law. The very purpose of the written undertaking is to oblige Zaid in the event he reneges from the promise.
(3) Since the very initial contract is baatil it is superfluous to delve into the other issues. The bottom line is that the property is ‘sold’ and ‘leased’ to Zaid in a single deal His ownership is incremental over the 60 months. Every month he ‘purchases’ a small percentage of the property, and all of this is incumbent in terms of the initial agreement.
(4) We observe that whenever the bankers are bereft of Shar’i argument, they resort to the taqleed of Mufti Taqi Usmani. Please be informed that we do not follow the venerable Mufti. We are in conflict with him on a range of issues.
(5) The contract may be made to conform to the Shariah by means of a simple agreement of sale. If the bank purchases the property for $50,000, for example, and if it wants to make a profit of $30,000 for example over a period of 5 years, the simple and straightforward way is to sell the property to Zaid for $80,000 payable over 60 months or whatever period is mutually agreed on. What is the need for the rigmarole and the laboriously worded contract which the banks usually fabricate, and which contains a number of Islamically corrupt conditions?
We fail to understand why the Muslim banks are so intransigent in their insistence to follow the capitalist system. With a simple contract, as outlined above, the banks can make the same profit which they expect to make with the corrupt ‘diminishing mushaarakah’ contract. What then is the need to simultaneously enter into a sale-cum-lease agreement? Brothers, please give this issue further reflection to bring your dealings within the confines of the Shariah.

Mufti Muhammad Taqi Usmani on Cryptocurrency

Question from Mufti Muhammad Wasie, student of Mufti Muhammad Taqi Usmani:

“Today I visited the august office of my beloved teacher his Excellency Mufti Muhammad Taqi Usmani and raised a question about the Shariah permissibility of cryptocurrency trading since currently its use is trending for business purposes. So much so that it is becoming the basis for the creation of various financial institutions, and many countries are in the process of regulating it on a state level. So in the current scenario how should the Shariah scholars guide people who are continuously enquiring about its Shariah status?” (May 10, 2021)

Answered by Mufti Muhammad Taqi Usmani:

“For now we are not satisfied with it. It is mostly being used for speculative purposes. Personally, I won’t recommend it; rather it seems to be impermissible in principle. However, it could happen that in future its use may expand for real trade and we might have to revisit the current decision.

There’s no doubt that this currency is speculative in nature. Even its mass use is not likable either from a Shariah perspective…Initially, paper currency was enforced and now the world is being pushed towards digital currency, which isn’t backed by an asset. The near future plan is maybe to make the economies dependent on these, and subsequently these money masters will financial enslave the weaker economies. Therefore, we cannot encourage it and, as per fiqh, there’s no sound ground devised till yet to grant its permissibility.”

Note from Mufti Muhammad Wasie: “I showed this transcript to his Excellency Mufti Sahab and he endorsed it for general dissemination.”

Mufti Muhammad Taqi Usmani is a leading scholar of hadith, jurisprudence, economics and finance, and spirituality, and is widely regarded as one of the world’s leading experts on Islamic finance. He currently serves as the Chairman of the International Shariah Council for the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and as a permanent member of the International Islamic Fiqh Academy. Previously he was a Justice of the Shariah Appelate Bench of the Supreme Court of Pakistan. He has authored over 60 books in Arabic, English, and Urdu on a range of topics.

TIMESHARE SALES

Q. I was always under the impression that timeshare sales are impermissible until I stumbled across the fatwa of Mufti Ebrahim Desai who claims that it is permissible. Please clarify if timeshare sales are permissible.

A. These sales are not permissible.

Firstly, it should be understood that an issue may not be dealt with in isolation of Islamic morality and spirituality. Our life on earth is a transitory affair. We have been dispatched to earth with an evil nafs to purify ourselves for the Meeting with Allah Ta’ala and for our everlasting salvation and happiness in Jannat.

Therefore, any activity, practice or institution which is inimical and detractory of these lofty goals, will be haraam regardless of the legal (Fiqhi) validity which the practice may be having.

Taking up residence for even a day at an immoral resort inTunisia or elsewhere is haraam, hence buying a timeshare unit in a property at a holiday resort where vice and immorality predominate is haraam even if it be assumed that the contract is technically valid. This suffices for a Mu’min. He need go to further than this ruling.

The halaalizing of this type of timeshare unit is in flagrant violation of the Qur’aanic command: “Do not approach near to zina.” The analogy for the zigzag mufti’s licensing the haraam timeshare unit is like hiring a maid. Everyone knows that it is permissible to employ a maid. It is an Ijaarah contract. But if the mufti is fully aware or there is ghaalib zann that the objective is to fornicate with the maid, then by what stretch of Imaani logic and Ilmi logic will he issue a fatwa of jawaaz (permissibility) despite the Fiqhi veracity of the contract?

The moron-maajin mufti may argue until doomsday and present pages of texts from Fiqhi kutub to bolster his evil zigzag fatwa of permissibility, but he cannot fool Allah Ta’ala with his corrupt fatwa which in reality is a licence for fornication. If the mufti has a valid conception of Khauf-e-Ilaahi (Fear for Allah), he will most assuredly advise the person of the impermissibility of hiring a maid without proferring pages of Fiqhi texts consisting of legal technicalities to bamboozle and to flaunt academic expertise when in reality he simply portrays his own academic jahaalat, moral deficiency and spiritual bankruptcy.

The Reality

In transactions of trade and commerce, the determinant is the reality of the concept, not the deceptive terminology. The principle as stated by the Fuqaha is “Al-ibratu fil uqood al-ma’naa las soerah”.

Stupidly playing with words mentioned in the contract to deceive himself and others, the mufti maajin seeks to convey the idea of the timeshare concept being a sale transaction (aqd-e-bay’). But this is furthest from the reality of the concept of timesharing which every moron can understand is a plain aqd-e-ijaarah (leasing contract).

The wording in the contract such as deeded ownership and real property does not alter the nature of the deal neither in terms of the Shariah nor in terms of the kuffaar law. The application of real estate laws in terms of kufr law does not transform the leasing contractinto aqd-e-bay’ according to the Shariah.

The liability of tax payment, far from transforming the lease contract into a sale transaction, only emphasises the invalidity of the whole contract by virtue of it being an egregiously faasid (corrupt) condition. Also, the addition of fees apart from the rental is another faasidcondition.

In a sale transaction, the buyer becomes the sole owner of a tangible asset (mabee’). Once ownership passes to the buyer, it will remain his property as long as he does not alienate his ownership by means of selling it or making a gift of it or by his death when his heirs become the owners.

But this extremely deceptive leasing contract is falsely portrayed as a ‘sale’ transaction. The condition: “the owner may do whatever is desired: use the week, rent

it, give it away, or sell the week to another prospective buyer.”, states with clarity that the item of sale is the week’s residence.There is no tangible asset which passes into the perpetual ownership of the imaginary ‘buyer’. A temporary right is sold. The imaginary ‘buyer’ is the tenant.

Furthermore, what kind of sale is it which requires the return of the ‘asset’ after a week without the ‘owner’ receiving payment for an asset which the morons seek to present as the property of the lessee? And, what type of Shar’i sale is this stupidity which stipulates in the contract that the item is ‘sold’ for only a week, and after the expiry of the week it must be returned free to the ‘seller’?

This absolutely corrupt and stupid fatwa is stupendously more stupid and bereft of Shar’i basis than this mufti’s fatwa of permissibility of rum, whisky and vodka. The couple of Fiqhi terms incongruously employed by the mufti only serves to highlight his jahaalat and his endeavour to deceive and mislead the ignorant who have no way of understanding the bunkum disgorged by the maajin mufti.

If a mufti lacks the ability and the baseerat to comprehend the practical consequences of his fatwa, then he is termed mufti maajin – mufti moron –mufti jaahil who is unable to distinguish between right and left. This is the haalat of all zigzag muftis of our era.

Thus, timeshare hiring and time share sales in the haunts of zina, fisq and fujoor as are all the Hollywood, Bollywood and Devilhood centres of immorality, are Haraam. The Fiqhi texts should be left in the Kutub.

Assuming that the timeshare unit is not at a resort, and it is in a normal building in a normal residential area, then too, it is not permissible with the conditions stipulated in the contract with Interval International.

A timeshare deal is an Ijaarah (Leasing) contract. It is not permissible for a tenant to make a profit from the rented property. While he may let it out, it must be at the very same rental which he pays or paid the landlord.

The gold card membership and the concomitant perks are not permissible. The stipulation of benefits for the lessee in the Ijaarahcontract is faasid which invalidates the contract.

The condition of allowing the tenant to make a profit by leasing the property to a third party is faasid and not permissible.

The condition of allowing the tenant ‘12 additional weeks which can be utilized at any time of the year……..” is invalid and faasid. Such a benefit may not be stipulated for the lessee in the contract. The leasing out of the 12 weeks by the member thereby making a profit is invalid and not permissible.

The non-refundable payment is haraam. Furthermore there is no valid sale in terms of the Shariah. There is no asset which is for sale. The hallucinated ‘buyer’ (the tenant) does not become the owner of any asset which is purported as the item of sale. The further stipulation of a time, e.g. one week, two weeks, etc., is a glaring refutation of the claim that this system is a sale contract. It is afaasid/baatil ijaarah contract.

The further condition of the return of the unit (the so-called asset sold) after expiry of the leased period is an emphatic negation of the claim that the contract is a sale agreement. Everything from A to Z in the timeshare system is haraam. The whole contract is corrupt and not permissible in terms of the Shariah.

As for the permissibility fatwa issued by mufti Ebrahim Desai of ‘Ask Imam’, be informed that this person has strayed from Siraatul Mustaqeem. He peddles along the path of liberalism. He is adept in the art of zigzagery, hence he issues zigzag fatwas of deception. He is astray and he misleads the informant and the unwary.

THE DECEPTION OF MUHAYA-AAT

The attempt to pass off the timeshare contract as a Muhaya’ah deal is utterly ludicrous. Either the mufti has miserably failed to understand what exactly Muhaya’ah is or he has perpetrated compound deception to mislead and deceive in his endeavour to promote the timeshare leasing product. However, in view of the timeshare lease being corrupt and impermissible, he seeks to present it as a Muhaya’ah deal. But this notion is palpably baatil.

Muhaya’ah is the division of benefits of a property jointly owned by the partners in this contract. The benefits are divided in terms of either time or place (i.e. fixed place in the jointly owned property). The division is among the owners of the property. This division has no relationship to leasing any section of the property to an outsider, i.e. one who does not own a share. Several heirs have inherited a property. In such a jointly owned property the Muhaya’ah contract is arranged.

This type of contract is not an Ijaarah (Leasing) agreement between the owner and a non-owner.

On the contrary, a timeshare is a simple Ijaarah contract which is rendered haraam because of several faasid (corrupt) conditions. These have already been explained earlier in this article. There is absolutely no relationship between Muhaya’ah and Ijaarah. The maajinmufti has committed chicanery in his attempt to deceptively pass off timeshare as Muhaya’ah.

The claim of “complete possession” in timeshare is a stupid canard fabricated to deceive and mislead. In timeshare one NEVER becomes the owner of the property or of section of the property. When the term expires, the occupier has to vacate and hand back the premises. According to the Shariah ownership is not curtailed by time or a specific period or number of weeks, months or years. Ownership is total and perpetual. There is no such ownership of a timeshare unit.

The terminology which creates the hallucination of the timeshare unit being ‘real’ property is stupid deception. In terms of the Shariah the occupied section of the property by a non-owner remains the property of the owner.

Ownership does not pass to the tenant/occupier. It is a blatant lie to claim that a real valid sale in terms of the Shariah is effected in any type of timeshare deal.

Whether the contract is a so-called ‘sale deal’ or a leasing deal, possession in both cases is complete. The claim that in one case the possession is ‘incomplete’ is false. In both cases the period of occupation is specified. According to the Shariah the so-called “complete possession” contract is not a sale deal. It remains an Ijaarah contract.

While the timeshare (Ijaarah) contract is between the owner of the property and an outsider, Muhaya’ah is a contract between joint owners of the property. No one’s ownership is cancelled in the jointly-owned property on expiry of the Muhaya’ah agreement. There are many masaa-il related to Muhaya-aat, which are not applicable to Ijaarah and vice versa.

Timeshare is a corrupt haraam Ijaarah contract. It is nothing else. No amount of zigzagery by the zigzag moron muftis can alter this Shar’i reality.

11 Shawwaal 1442 – 24 May 2021

Conventional Insurance, Medical Aid, Hospital Plan and Takaaful

muftionline.co.za

Q:

  1. I purchased a business and wish to insure it. What is the Shar‘ee ruling regarding insuring one’s business? Similarly, explain the law of insuring one’s vehicle.
  2. Could you also explain to me what is the Shar’ee ruling regarding medical aid and hospital plan?
  3. Is Takaaful insurance permissible? I was informed that this is an Islamic insurance and is therefore permissible.

A:

  1. Insurance is haraam in Islam due to the elements of interest and gambling being found in it. One is uncertain as to whether one will be hijacked or meet in an accident, or whether one’s house or business will be burgled in the future or not. Hence, one does not know when he will receive the pay-out.

Any transaction wherein one pays for something which is suspended upon an uncertain event is in actual fact gambling. This is the definition of gambling according to all the Ulama. In the case of gambling, one spends a certain amount of money in the hope of gaining something which is uncertain. At times, one loses all his money and receives nothing, while at other times, he may receive more than the amount he had spent or less than the amount he had spent. Hence, it is clear that the element of gambling is found in an insurance policy.

Further, if one receives the insurance pay-out and one is paid more than the amount that one had paid to the insurance company in premiums, then in this case, the extra amount which one has received is riba (interest). Hence, taking out an insurance policy is impermissible in Shari’ah.

  1. There is no difference between the workings of a medical aid scheme, hospital plan and an insurance policy. The common factor in all three companies is that they do not provide any service to the client, but rather they settle the bills of the client when he is faced with a problem. In the event of an accident, the insurance company will settle the bills which may either be more than the invested amount or less. Similar is the case with regard to the medical aid schemes and hospital plans. When the patient falls ill, they settle the bills with the doctor or hospital. Hence, since the elements of qimaar (gambling) and interest are found in all (medical aid scheme, hospital plan, and the insurance policy), it is impermissible for one to involve himself in them.
  2. After studying Takaaful carefully, we have not found any difference between Takaaful and the conventional insurance systems that are in vogue.

We have prepared a detailed fatwa on Takaaful. You may refer to it http://muftionline.co.za/node/25528

And Allah Ta’ala knows best.

الَّذِينَ يَأْكُلُونَ الرِّبَا لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ الَّذِي يَتَخَبَّطُهُ الشَّيْطَانُ مِنَ الْمَسِّ ذَٰلِكَ بِأَنَّهُمْ قَالُوا إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَا وَأَحَلَّ اللَّـهُ الْبَيْعَ وَحَرَّمَ الرِّبَا فَمَن جَاءَهُ مَوْعِظَةٌ مِّن رَّبِّهِ فَانتَهَىٰ فَلَهُ مَا سَلَفَ وَأَمْرُهُ إِلَى اللَّـهِ وَمَنْ عَادَ فَأُولَـٰئِكَ أَصْحَابُ النَّارِ هُمْ فِيهَا خَالِدُونَ ﴿البقرة: ٢٧٥﴾

يَا أَيُّهَا الَّذِينَ آمَنُوا إِنَّمَا الْخَمْرُ وَالْمَيْسِرُ وَالْأَنصَابُ وَالْأَزْلَامُ رِجْسٌ مِّنْ عَمَلِ الشَّيْطَانِ فَاجْتَنِبُوهُ لَعَلَّكُمْ تُفْلِحُونَ ﴿المائدة: ٩٠﴾

عن جابر رضي الله عنه قال لعن رسول الله صلى الله عليه وسلم آكل الربا وموكله وكاتبه وشاهديه وقال هم سواء رواه مسلم ( مشكوٰة المصابيح ص244)

عن أبي هريرة عن رسول الله صلى الله عليه وسلم قال ليأتين على الناس زمان لا يبقى أحد إلا أكل الربا فإن لم يأكله أصابه من بخاره ويروى من غباره رواه أحمد وأبو داود والنسائي وابن ماجه ( مشكوٰة المصابيح ص245)

وعن عبد الله بن حنظلة غسيل الملائكة قال قال رسول الله صلى الله عليه وسلم درهم ربا يأكله الرجل وهو يعلم أشد من ستة وثلاثين زنية رواه أحمد والدراقطني وروى البيهقي في شعب الإيمان عن ابن عباس وزاد وقال من نبت لحمه من السحت فالنار أولى به ( مشكوٰة المصابيح ص245)

( إن شرط لمال ) في المسابقة ( من جانب واحد وحرم لو شرط ) فيها ( من الجانبين ) لأنه يصير قمارا

قال الشامي : قوله ( ومفاده لزومه بالعقد ) انظر ما صورته وقد يقال معنى قوله لعدم العقد أي لعدم إمكانه على أن جواز الجعل فيما ذكر استحسان قال الزيلعي والقياس أن لا يجوز لما فيه من تعليق التمليك على الخطر ولهذا لا يجوز فيما عدا الأربعة كالبغل وإن كان الجعل مشروطا من أحد الجانبين اه فتأمل وبالجملة فيحتاج في المسألة إلى نقل صريح لأن ما ذكره محتمل ورأيت في المجتبى ما نصه وفي بعض النسخ فإن سبقه حل المال وإن أبى يجبر عليه اه أقول لكن هذا مخالف لما في المشاهير كالزيلعي و الذخيرة و الخلاصة و التاترخانية وغيرها من أنه لا يصير مستحقا كما مر فتدبر قوله ( من الجانبين ) بأن يقول إن سبق فرسك فلك علي كذل وإن سبق فرسي فلي عليك كذا زيلعي وكذا إن قال إن سبق إبلك أو سهمك إلخ تاترخانية قوله ( لأنه يصير قمارا ) لأن القمار من القمر الذي يزداد تارة وينقص أخرى وسمي القمار قمارا لأن كل واحد من المقامرين ممن يجوز أن يذهب ماله إلى صاحبه ويجوز أن يستفيد مال صاحبه وهو حرام بالنص ولا كذلك إذا شرط من جانب واحد لأن الزيادة والنقصان لا تمكن فيهما بل في أحدهما تمكن الزيادة وفي الآخر الانتقاص فقط فلا تكون مقامرة لأنها مفاعلة منه (رد المحتار 6/ 402)

Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)