An Islamic Model for Stabilization and Growth

Inhaltsverzeichnis

1. Frontmatter

2. Chapter 1. Introduction

   Adama Dieye

   Abstract

   Economic activities rise and fall in response to various external and internal shocks, including policy corrections. In severe shocks, the government implements a process of adjustment to stabilize and restore equilibrium to the economy. Since the 1970s, developing countries in particular, have implemented macroeconomic adjustment through financial reform programs, designed and supported by the International Monetary Fund (IMF), the World Bank, and other bilateral and multilateral institutions.

3. Chapter 2. Overview of Current Macroeconomic Policy Issues and Challenges in Mainstream Economics

   Adama Dieye

   Abstract

   From a practical point of view, macroeconomic policies are usually classified into two broad categories: (i) structural policies that cover a wide range of measures designed to tackle obstacles to the fundamental drivers of growth, and to boost the economy’s competitiveness and growth potential in the medium and long run. The structural measures usually have medium and long-term effects; (ii) demand management policies—fiscal and monetary measures—that target short-term macroeconomic stability. Macroeconomic stability refers to a state of the economy that displays internal and external sustainable financial positions, which in turn increase positive prospects for saving, foreign capital inflows, investment, and sustained economic growth.

4. Chapter 3. Current Economic and Social Challenges and Islam

   Adama Dieye

   Abstract

   An Islamic economy is a rule-based system. Allah (SWT) prescribed in the Qur’an a set of rules of behavior that could be defined as institutions for societies and individuals. These rules were explained and implemented by His Prophet (SAW) when he was both the temporal and spiritual leader in Medina.

5. Chapter 4. Islamic Institutional Policy Framework

   Adama Dieye

   Abstract

   Economic activity takes place within the limits of an economic system that consists of a set of economic entities which operate in an organizational framework in compliance with a set of axioms and other rules.

6. Chapter 5. Rules of Economic and Financial Operations

   Adama Dieye

   Abstract

   Further elaborating upon the institutional rules organizing the legal and regulatory economic policy framework as discussed in the previous chapter, this chapter begins by describing a set of operational rules in the main economic sectors; including production and consumption, investment, and external exchange, and financial operations (public finance and banking).

7. Chapter 6. Sustainability of the Senegal Socioeconomic Model

   Adama Dieye

   Abstract

   This chapter analyzes Senegal’s economic and social performance over the period between 1980 and 2014, as well as recent developments since the government introduced its growth strategy, “The Emerging Senegal Plan” (ESP) in 2015. The chapter diagnoses the country’s disequilibrium under the IMF and the World Bank programs, and seeks to clarify why Senegal remained under a prolonged adjustment program. We also look to assess the failure of these programs that justify the need for finding an alternative to the existing conventional economic policy model. The new paradigm to be developed is intended to help authorities achieve sustainable economic growth, to improve human development and ultimately social justice.

8. Chapter 7. Counterfactual Simulation of the Islamic Model for Senegal

   Adama Dieye

   Abstract

   Considering the actual data set (available till 2019) and the context of the Phase II of the Plan Senegal Emergent (PSE) (2019–2023), this chapter proposes a counterfactual simulation of the Islamic model for Senegal over the sample period (2019–2024).

9. Chapter 8. Implementation of the Islamic Model for Senegal

   Adama Dieye

   Abstract

   Implementing the operational rules of behavior would offer stability and a positive institutional environment for sustained economic growth and social justice. Lessons from case studies on introducing Islamic finance in a conventional financial system suggest common conditions necessary for implementing the Islamic model of stability and growth. The conditions comprise of: (i) political determination and commitment to implement reforms, (ii) credible initiators, communicators, and awareness campaigns for the envisaged Islamic economic reforms, (iii) a supportive legal-judiciary infrastructure and (iv) gradual, prudent introduction of the reforms to allow time for developing a broad consensus for the process, thus rendering it politically and socially more sustainable.

10. Chapter 9. Conclusion

    Adama Dieye

    Abstract

    The recent global economic outlook identifies worrisome economic and financial trends with rising downside risks exacerbated by increased restrictions on world trade, hurting productivity and income; coupled with high global debt at US$247 trillion in the first quarter of 2018—or 225% of global GDP. This, combined with declining profitability, weak bank balance sheets and increased risk from climate change have exposed most economies to tighter global financial conditions and capital flow reversals.

11. Backmatter