History of the Development of the World Islamic Economy

History of the Development of the World Islamic Economy - Dear readers, the development of Islamic Economics or what is known as the Islamic Economy in the world in the last three decades has been growing slowly along with the number of banks that use the syariah system (profit sharing) in their banking system. The development of Islamic economics in the world has become a solution in several countries who consider that interest (Riba) is not the best solution in banking. Now what the author wants to discuss today is "The History of the Development of a World Islamic Economy". The application of Islamic Finance in the World began with the establishment of the first Islamic bank in Egypt in 1963, namely the Mit Ghamr Local Saving Bank which was a milestone in the history of the development of the banking system such as Savings, Loans, Equity, Direct Investment, etc.

Mit Ghamr Local Saving Bank was founded by Dr. Ahmad Elnaggar in 1963 which took the form of a savings bank based on profit sharing in Mit Ghamr City, Egypt. This experiment was carried out until 1967, and by then there were 9 banks with a similar concept in Egypt. Mit Ghamr's introduction of a banking system based on Islam received a warm welcome from local residents.

This is evident from the number of customers who at the end of the 1963/1964 financial year were 17,560 to 251,152 at the end of the 1966/1967 financial year. One of the reasons for the increase is a sense of belonging among the community about this system and this is what makes Mit Ghamr Local Saving Bank the most successful and innovative bank in modern times. This success has inspired Muslims around the world and raised awareness that in modern business the principles of Islamic economics can be applied.

The emergence of modern Islamic economics on the international stage began in the 1970s which was marked by the presence of contemporary economists such as Kursyid Ahmad, An-Naqvi, M. Umer Chapra, etc. Even in Europe, there is already a bank that was founded in 1983, namely The Islamic Bank International of Denmark. Meanwhile, countries such as Pakistan, Iran, and Sudan, took the initiative to implement a total Islamic financial system, so that all financial institutions in these countries operate without using interest. The Islamic economic system is an alternative choice because the Islamic economic system is different from other economic systems.

The objective of Islamic economics is not solely material, but includes various aspects such as: welfare, a better life, giving a very high value to brotherhood and socio-economic justice, and demanding a balanced satisfaction, both in material and spiritual needs for all mankind. Even today, many countries have established Departments or Faculties of Islamic Economics in their universities, have even started to Islamize their institutions and are supported by the sharia economic movement which includes all aspects of the economy as defined by Umer Chapra in his book The Future of Economics.

Meanwhile, the application of sharia principles to sectors outside the banking industry starts with the insurance industry (Takaful). The first insurance company was Takaful Insurance in Sudan in 1979, which was managed by Dar al-Mal al-Islami Group. Dar al-Mal expanded its business to other European and Asian countries. There were at least four takaful and crackaful insurers in 1983, based in Luxembourg, England etc. 4 trillion. Meanwhile, in the next 8-10 years, 40% -50% of the total deposits of Muslims, amounting to 1.3 billion, are projected to be in global Islamic financial institutions.

The knowledge base is very important from an expert system, even the knowledge base can be likened to the core of an expert system. Knowledge base is a representation of expert knowledge. The knowledge base is composed of facts and rules. Fact is information about object, event and situation. A rule is a way of generating a new fact from an already known fact. The inference engine is the brain of an expert system. The inference engine is used to make reasoning from a condition based on a pre-existing knowledge base.

In this component, there is a process of manipulating the facts on the knowledge base to produce a solution. The reasoning strategy consists of two types, namely definite reasoning (Exact Reasoning) and uncertain reasoning (Inexact Reasoning). Exact reasoning is used when all the data needed to draw conclusions are available, in contrast to inexact reasoning. This facility is used as an intermediary for communication between users and the system. Aamodt, Agnar, and Enric Plaza. "Case-Based Reasoning: Foundational Issues, Methodological Variations, and System Approaches". Althoff, Klaus-Dieter, Ralph Bergmann, andL. Karl Branting, eds. " Case-Based Reasoning research and development: proceedings of the Third International Conference on Case-Based Reasoning ”. Dimitris Bertsimas and John Tsitsiklis.