The origin of the modern Islamic banking system can be traced back to the very birth of Islam when the Holy Prophet Muhammad (Peace Be Upon Him) himself acted as an agent for his wife’s trading operations. Islamic partnerships known as (Mudarabah) dominated the business world for centuries and the concept of interest found very little application in day-to-day transactions in the period. Such partnerships performed an important economic function.
During the business, they combined the three most important factors of production, namely: capital, labour and entrepreneurship, while the elimination of ‘Riba’ or interest in all its forms is an important feature of the Islamic financial system, Islamic banking is much more than being it free from ‘Riba’.
At the heart of Islam, there is a sense of cooperation, a feeling to help one another according to principles of goodness and goodness (but not to cooperate in evil or malice). In essence, the Takaful system aims to eradicate exploitation and to establish a just society by the application of the Shariah or Islamic rulings to the operations of banks and other financial institutions. The Islamic economic principles implemented offer a balance between extreme capitalism and communism.
Keeping the Islamic system in perspective offers a blend of moderate practices that benefits each individual and industry. In the current scenario, it has been observed that the Takaful banking system or the conventional banking system does not have any subsidy. The current system in place does not recognize fishery-related industry as a viable investment.
What needs to be understood is that there can be no same policy to grow apples and oranges, the rule of thumb does not apply to all the fruits in the same manner and techniques. The same needs to be grasped that all industries are different and have different dynamics. Keeping that in view it needs to be agreed and policies made/implemented should not be one formula for all. We need to understand the importance of customized, tailored and industry-specific policymaking that would cater to the specific industry and would have terms, industry-specific conditions. The understanding of the dynamics, factors, risks faced and other elements of that particular industry.
The fisheries and allied industrial operations in Pakistan have been the most important economic activities along the coast of Sindh and Balochistan by supporting the livelihood of about one million fishermen and their families living in rural villages since generations are into this profession. Fisheries currently contribute only 0.4 percent to Pakistan’s GDP, and the sector’s approximately $350 million of exports appears to be at a standstill. In comparison to other countries in the region suggest that Pakistan is failing to fully realize the potential of its capture.
Regrettably, at present, the fisheries industry is not itself the driving force within the fisheries value chain. Public-sector organizations need to move from being ‘doers’ with a central role in the industry to facilitators helping modernize a demand-led food system.
Pakistan’s fisheries could capture a bigger percentage of these markets. However, to meet EU and US quality standards, processing plants and supply chain management of seafood will need to improve further. The board works in partnership with the private sector to support the development and expansion of aquaculture by determining locally appropriate and cost-effective production methods. If the banking sector could assure Takaful/low interest-based loans for the investors and fishing community. The need of the day is to understand that this segment of the agricultural economy can play a vital role in boosting the exports and earnings of foreign exchange.
The schemes like Qarz-e-Hasana (Qard Hasan) in Arabic is a Quranic term meaning an interest-free loan. It was the primary source of financing introduced by the Holy Prophet (Peace Be Upon Him) after entering Medina and was used primarily for productive economic purposes, such as setting up qualified, but poor, people in trade and agriculture. These need to be introduced for small scale farmers and people living along the coast with an initiative to provide loans and funds specific to these communities and the return policies and procedures should be according to this industry by the virtue of their functioning and features.
Recently WWF-Pakistan, through its capacity-building programme, has trained 30 fishermen to use an android-based mobile application system to collect fish catch data. He said that the initiative will help academia and policymakers to fill data gaps, undertake research studies on various aspects of fisheries and formulate robust fisheries regulations. We need to initiate more of such capacity building training along with an tailor-made investment model for fisheries that supports the fishermen and other ancillary industries to increase Pakistan’s export, improve the standard of living of communities along the coast, lead to sustainable utilization of marine resources, enhance the share of fisheries in GDP and play a vital role in the future development of fisheries sector and also the people involved in it.
[box type=”note” align=”” class=”” width=””]The writer is a researcher and a freelance contributor and can be reached on Alifiya.email@example.com[/box]