Fiqh as it is

Finally, fiqh shall be accompanied with the objectives of Sharia and economic analysis. Looking at the different opinions amongst muslims scholars on the innovative products which are considered as sharia compliance products such as bay inah, tawaruq, commodity murabahah, bay dayn, etc., we cannot deny that the essence of fiqh is different opinions (ikhtilaf).

The discussion of fiqh tends to be a legal formal approach which means form over substance. As consideration let’s take bay inah product. According to Shafii school of thought, the product is valid as long as it fulfills the pillars of the contract namely contracting parties, offer and acceptance, and subject matter. Vice versa, according to the rest of the school of thought, the contract is invalid because its motive is illegal which means a legal trick (hillah) to accommodate the mechanism of lending and borrowing through the selling and purchasing mechanism. Another relevance example is bay al dayn. According to muslim scholars which are hired by Central Bank of Malaysia, selling the debt at discount price is valid, because the debt represents the property. In other continent, the muslim scholars in Middle east argue that we cannot sell the debt at any price, because the debt represents money. Thus, the transaction of money exchange must strictly follow the rules of equal in value and hand to hand which means on the spot. If the exchange of currency does not follow the rules then the different value which is created from that transaction is categorized as riba al buyu which is prohibited from the Islamic point of view. Why this ikhtilaf takes place, we can simply say that the way they interpret the debt are differ. For muslim scholars in Malaysia, the debt represents property. Vice versa, the muslim scholars in middle east say that the debt represents money. As a logical consequence, the implication and the treatment of that opinions are different.

There’s interesting framework that we can use to make a judgment whether the transaction or the contact is using the correct thing to secure the objective of Sharia or not. This approach introduced by Prof. Iraj Toutouchian oh his remarkable book which is titled of Integrating Money into Capital Theory. When we consider that money is not commodity then we must realize that Commodity-Money-Commodity (CMC) represents the money as medium of exchange. But when we consider Money-Commodity-Money (MCM), then the result will be the money is commodity. Meaning to say that, the commodity is a tool in creating money that can lead to the additional motive of money which is speculative in nature. Let’s we use this framework to screen the commodity murabahah product. The nature of commodity murabahah is not to involve in real trading activities but more to get a cash as a liquidity requirement. Hence, we can say that the product follows Money-Commodity-Money (MCM). By explanation, the commodity has used to generate money. For this condition, the commodity is transformed to be a tool to get cash money in the form of trading contract. 

Waqf and Privatization

Literally, waqf is the transfer of ownership from the private to the public. Vice versa, the privatization is the transfer of ownership from the public (state-owned) to the private. The first comes out from the religious purposes, and the second comes out from the market mechanism. Albeit, it is not fair to compare  the two since it cannot be categorized as apple to apple. However, for  a starting point of intellectual exercise it is useful to highlight the concept of the two.

Waqf is used in Islam in the meaning of holding certain property and preserving it for the benefit of certain philanthropy and prohibiting any use or disposition of it outside that specific objective (Monzer Kahf). The tradition of waqf institution in Islamic history enriched the history of Islamic economics itself. It has a beautiful role to preserve and protect the wealth that prescribed as one of the five dharuroh(s) (khomsatut dharuroh) of maqoshid as Syariah. The main purposes of waqf are to preserve the public interest by transforming the wealth of an individual to meet the need of specific objectives that can enhance the society in general. Hence, it is part of justice principles in Islam.

Privatization was founded by capitalism industry with its market mechanism jargon. It has widely recognized as an instrument to strengthen the foundation of a market mechanism in the capitalistic economic system. By definition, privatization is the transfer of enterprise ownership – in whole or in part – from the state to private hands. Fundamentally, privatization is much more than financial or managerial actions; it is a philosophical position concerning the roles and the relationships of society’s private institutions and government. Some scholars define privatization as the act of reducing the role of government or increasing the role of the private institutions of society in satisfying people’s needs; it means relying more on the private sector and less on government.

To be continued..

The Education of Islamic Economics and Finance Worldwide

The Emergence of Islamic economics in the field of practice which is shown by the surfacing of Islamic finance especially Islamic Banks, Takaful, Islamic Fund Management, Islamic Capital Market has created the exclusive demand on the education of such fields. From the marketing viewpoint, the lack of expertise increases the demand on such education since there has the special treatment education which integrates special knowledge that built the building of Islamic economics and finance such as Islamic commercial Law, the history of Islamic civilization with particular reference to its economic characteristics, and the contemporary economics and finance.


The surfacing of educational programmes in level of diploma, under and postgraduate on Islamic economics and finance seems to be a mushroom in the rain that expands to not only the muslim countries but also the westerns. The types of these educations vary based on its purposes. However, generally, there are three types of generic curriculums, which are focused on law approach, focused on economics approach, focused on finance and banking approach. The first and the latter are the most offered by these institutions. The rational is that the development of Islamic economics is heavily dominated by the Islamic banking and finance.


In case of United Kingdom, there are many higher educational institutions, which offer the programme such as Durham Islamic Finance Programme (DIFP) Durham University, ICMA Reading University, Loughborough University, Markfield Institute of Higher Education (MIHE) behind the Islamic foundation, Finance and Law with Islamic Finance Newcastle University. The programme also offered in Germany such as Ecole de Management Strasbourg, United States such as in Harvard Law School, Rice University, and so on.

In South East Asia region, the countries which are very serious about developing the programme of Islamic economics and finance are Malaysia and Indonesia. Malaysia has been established the programme seriously since the inception of the project of Islamization of Knowledge (IoK) by establishing the International Islamic University Malaysia which was supported by the Organization Islamic Conference (OIC) about thirty years ago. In the 2005, Bank Negara of Malaysia established the International Center for Education of Islamic Finance (INCEIF) as the official educational institution behind the financial authorities to foster the Islamic finance programme in the international level. The other one is Indonesia, which is trying to make sure its market of the high demand of Islamic economic and market. There are a lot of universities in Indonesia that offer the programme such as Indonesia University behind the Middle East Studies Programme, Islamic Finance Programme Trisakti University, Syariah Management Programme Padjajaran University, Faculty of Economics Airlangga University, State Islamic Universities, Bandung Islamic University, Tazkia Higher Educational Institution (STIE Tazkia), SEBI, and so on.

Important to note that each programme is unique in its curriculum and methodology of learning. For Example the Chartered of Islamic Finance Programme (CIFP) of INCEIF, the programme which is equivalent with master degree based on the accreditation of Malaysian Education Rating Agencies combines the various programme approaches namely building knowledge, building skills, and building competency and experience. The last approach will be conducted in the various Islamic financial institutions approved by INCEIF. Another example that's beneficial to look is the Master of Investment Banking and Islamic Finance ICMA Reading University. This programme is designed to meet the high demand of investment in the financial instruments which accordance with Islamic tenets. ICMA which is supported by International Capital Market Association mainly focuses its programme into investment since the core curriculum is provided to support it.

As a result the programme of Islamic economics and finance will be definitely different each others since the different purposes of its various curriculums.

Yudi AF

A highlight of contemporary sukuk: its characteristics

Development of sukuk has evolved vigorous growth. Recent study shows that many investors are believing that investing in sukuk is relative safe for them than investing in bond. One of the reasons is that in sukuk the value of investment is secured by the underlying asset which will not disappear when the issuing unit goes to bankruptcy. In addition, Special Purpose Vehicle (SPV) which issues sukuk separates its entity body from the company which uses that sukuk funds.

At least the above explanation is trying to figure out the different characteristics of sukuk comparing to bond in a theoretical manner. To get a sophisticated understanding on how sukuk and bond are structured, there are three indicators that can be used to compare them namely guaranteeing the return of principle, regular distribution to certificate holders, and certificate’s holder ownership to enterprise asset. In bond, the issuing unit will guarantee the return of bond holder principles in the same time they will guarantee that the bond holder will get periodic interest payment of their funds, there’s no other explanation of this since the bond has structured as a debt of issuing unit to the bond holders. In other words, the issuing unit must pay the principal at a maturity and periodic interest payment until maturity. The other characteristic of bond that the bond does not represent the ownership of an asset in the company, it’s just a promissory note of the issuer to the bold holder. The following is an example on how it works, let say in 2009 Mr. X wants to invest in Treasury bill of United States which will mature in 2015. For this he will purchase that bond which price of $500.000 with 5% interest rate per year. Periodically, Mr. X will get $25.000 a year for 5 years, and at maturity, he will get the principle with the same value. Hence, for 5 years his money will increase from $500.000 to $625.000.

Above structure will be basically different with Sukuk. The structure of sukuk must strictly follow the rule and nature of Islamic commercial law that integrated into its structured. The characteristics of Sukuk are highly influenced with the Islamic contract itself. As a consequence, the treatments of the above indicators will be different  each other. This may lead to the flexibility of sukuk structures. The Islamic contract is basically divided into three models, i.e. Sale based model, profit and loss sharing model, and ijarah based model. Sale based model is represented by contract of Murabahah, Salam, Istishna while the profit and loss sharing model is represented by the contract of musyarakah and mudharabah, and the other one is represented by the contract of ijarah. For illustration, we are going to structure the sukuk using the profit and loss sharing model such as musyarakah. From the Islamic viewpoint, musyarakah is a contract whereby the contracting parties agree to involve in a certain business. The capital will be shared among parties based on an agreed ratio. If the business is profitable then the profit will be distributed among parties based on the profit ratio that has been agreed at the beginning of the contract. If the business is losses then it must be distributed among the parties based on their capital contribution. Because of that, this kind of contract is not guaranteeing the return of principal, because the nature of this contract is uncertainty in terms of the return of capital and the profit. Hence, it’s prohibited to guaranteeing the return of principle and the periodic profit distribution if the sukuk using this contract in its structure. The other characteristic of this sukuk that the certificate represents the ownership of an asset.

One of the famous sukuk that used musyarakah was East Cameron Gas Sukuk (ECG Sukuk) what was issued by East Cameron Gas Co. United States in 2006. Even so, unfortunately, this sukuk is default because of the hurricane damage and the fall of production. This default leads the next challenges on how this structure can be resolved in the court. Because some issues need to be addressed such as How will the default on these Sukuk bonds be dealt with? Will they be treated in the same manner as default on conventional bonds? How will the judiciary deal with cases where conventional law and Islamic Shariaa law conflict? And in cases of bankruptcy, how will the judiciary deal with Sukuk assets? Will they be considered assets of the Sukuk holders, or will they be included in bankruptcy, thus reducing the Sukuk holders to the level of other creditors with regards to splitting the loss? What is the precise definition of payment default under the provision of Islamic Shariaa law? Is it impossible  to reschedule these payments, or provide compensation when payment is delayed? Moreover, are the local courts, especially those in the Gulf States, even qualified to provide rulings on Sukuk cases?

Wallohu a'lam bishowab.

Yudi Ahmad Faisal

Financial Uncertainty

Ketika Anthony Giddens menulis The Consequences of Modernity, para pakar manajemen dibuat hopeless dan kalang-kabut, menurutnya akibat dari modernitas yang sangat cepat, dunia tempat kita hidup ini seperti truk besar sarat muatan yang meluncur tanpa rem. Meminjam statement Gede Prama bahwa para penganut teori masyarakat industrial – di mana banyak pakar manajemen meminjam pijakan – memang sedang dibuat runtuh oleh Anthony Giddens. Oleh karena itulah, bisa dimaklumi kalau manajemen sudah mulai kehilangan kepercayaan dirinya dalam menjelaskan perkembangan mutahir.

Pun dalam dunia manajemen bisnis dan keuangan, para pakar sedang dibuat bimbang dengan teori-teori yang selama ini mereka anggap mapan untuk mencapai kestabilan sektor keuangan ternyata tidak membuahkan hasil yang diharapkan. Tidak tanggung-tanggung, krisis hampir terjadi dimana-mana hampir semua negara yang menerapkan sistem kapitalisme.

Roy Davies dan Glyn Davies (1996) dalam buku The History of Money from Ancient Time to Present Day, menguraikan sejarah kronologis krisis ekonomi dunia secara menyeluruh. Menurut mereka, sepanjang abad 20 telah terjadi lebih dari 20 kali krisis besar yang melanda banyak negara. Fakta ini menunjukkan bahwa secara rata-rata, setiap 5 tahun terjadi krisis keuangan hebat yang mengakibatkan penderitaan bagi ratusan juta umat manusia. Krisis ekonomi telah terjadi sejak tahun 1907, 1923, 1930, 1940, 1970, 1980, 1998-2001, 2008 – sekarang.

Fakta tersebut seolah mengekspresikan bahwa sistem keuangan yang dibangun adalah sistem keuangan yang penuh dengan ketidakpastian dan ketidakjelasan, alias uncertainty, alias gharar. Lebih-lebih sistem tersebut bersenyawa dengan sifat serakah manusia yang menginginkan keuntungan dengan segala cara dan dengan waktu yang sesingkat-singkatnya.

Tidaklah mengherankan kemudian terjadi krisis mortgage di Amerika Serikat, yang dibangun dari sistem financial uncertainty. Dimana hak tagih pinjaman perumahan dari warga Amerika Serikat, diderivasi menjadi security dalam beberapa level kemudian dijual di pasar sekunder layaknya sebuah komoditas real, sehingga nilai utang perumahan yang nilai awalnya $x menjadi $xxxxx dan dimiliki oleh berjuta-juta orang, sungguh fantastis cara kerja derivatif yang penuh dengan ketidakpastian dari aset yang diperjualbelikan.

Dari perspektif keuangan Islam, jangan sampai para pakar keuangan Islam membawa sistem keuangan Islam masuk menjadi salah satu penumpang dalam truk besar tanpa rem tadi dengan membuat struktur produk keuangan Islam yang secara esensi sama dengan produk derivatif konvensional yang terbukti sudah gagal dalam membawa kesejahteraan dan kestabilan sistem keuangan.


Wallaho A'lam bishowab.

YAF

Menimbang Fungsi Perbankan Islam dalam Investasi

Secara umum, perbankan konvensional melaksanakan dua fungsi perbankan yaitu penghimpun dana dari masyarakat dalam bentuk deposit dan menyalurkannya kembali ke masyarakat dalam bentuk kredit (loan). Sistem perbankan konvensional memproteksi dana deposan beserta keuntungannya (bunga) serta dalam banyak sistem dana deposan tersebut digaransi oleh pihak ketiga seperti Lembaga Penjamin Simpanan dalam kasus di Indonesia. Di lain pihak, peminjam dana atau debitur diwajibkan mengembalikan dana pinjaman beserta keuntungan bank (bunga pinjaman), selain itu debitur juga diwajibkan menyediakan jaminan (collateral) sebagai instrumen untuk mencegah terjadinya resiko kegagalan bayar di akhir masa pinjaman.

Jika mencermati fungsi dan mekanisme perbankan konvensional diatas, sebenarnya yang terjadi bukanlah implementasi dari fungsi perbankan sebagai mesin perekonomian (engine of economy), tetapi secara esensi fungsi perbankan tersebut bersifat pasif, mengingat mekanisme yang dijalankan tidak fleksibel dalam menghadapi fluktuasi perekonomian. Dengan kata lain, system perbankan konvensional telah mengasumsikan bahwa usaha yang dijalankan oleh debitur pasti menghasilkan keuntungan, asumsi ini kemudian diintegrasikan ke dalam system perbankan dimana dalam setiap transakti pinjaman debitur sudah dikunci agar mengembalikan uang pinjaman beserta bunganya. Mekanisme tersebut mengabaikan peminjam dengan orientasi produktif, karena dalam kasus terakhir debitur akan dihadapkan kedalam tiga kemungkinan yaitu untung (get positive return), balik modal (get no return), ataupun rugi (get negative return). Dalam teori modern tentang ventura (theory of venture), ketiga kemungkinan dalam bisnis tersebut dijelaskan secara rinci. Tetapi pihak perbankan konvensional tidak mengakomodasi hal tersebut, bahkan kalau ditelaah lebih dalam, pihak perbankan juga telah mengunci factor kegagalan dengan cara mentransfer resiko (risk transfer) kegagalan ke debitur dengan cara meminta jaminan yang nilainya lebih besar daripada dana yang dipinjam oleh debitur.

Mekanisme perbankan konvensional tersebut tidak akan dijumpai di perbankan Syariah, karena perbankan Syariah mempunyai mekanisme untuk mengakomodasi fluktuasi perekonomian. Mekanisme kerja perbankan Syariah sebagai fungsi intermediasi tidak berbeda dengan perbankan konvensional yaitu menghimpun dana dari masyarakat (surplus unit) dan menyalurkannya kembali ke masyarakat (deficit unit). Salah satu perbedaan yang sangat mencolok adalah bahwa di perbankan Syariah kecenderungan bisnis secara alami yaitu menghasilkan untung, tidak untung tidak rugi alias balik modal, dan rugi tersebut diakomodasi oleh mekanisme bagi untung dan bagi rugi (profit and loss sharing). Salah satu contoh praktisnya adalah produk mudharabah,yaitu suatu produk untuk membiayai bisnis dimana bank Syariah sebagai penyedia dana melakukan kontrak kerjasama (partnership contract) dengan nasabah peminjam atau klien sebagai pebisnis (mudharib) untuk melakukan suatu usaha tertentu. Dalam praktek tersebut tidak ada mekanisme menggaransi modal kembali plus keuntungannya kepada pihak bank (guaranteeing return of the principal). Jika usaha menguntungkan maka akan dialokasikan kepada bank dan pebisnis sesuai dengan nisbah (ratio bagi hasil) dari keuntungan yang didapat, jika rugi maka pihak bank akan menanggung kerugian tersebut berdasarkan kontribusi modal bank, sedangkan pihak pebisnis menanggung kerugian waktu, tenaga dan pikiran.

Praktik produk profit and loss sharing tersebut akan berdampak positif terhadap iklim investasi terutama sector riil di Indonesia. Selain itu, dengan produk tersebut akan dapat menjangkau semua elemen masyarakat. Baik level bawah yang selalu indentik sebagai kaum unbankable karena tidak mempunyai asset untuk dijadikan jaminan sebagai kunci untuk membuka akses terhadap perbankan, ataupun level menengah yang selalu dinamis dalam menciptakan ide-ide bisnis, bahkan level atas atau level high net worth individual (HNWI) yang “kebingungan” dalam menginvestasikan uangnya yang berlimpah.

Secara kontras, bank Syariah tidak memposisikan pinjaman sebagai utang nasabah yang harus dibayar plus “keuntungan” alias bunga tertentu, tetapi lebih kepada memfasilitasi pebisnis dengan modal (capital) thus perbankan Syariah memainkan peran aktif dalam perekonomian terutama dengan semangat mengakomodasi fluktuasi perekonomian terutama di sektor investasi. Artinya selain sebagai engine of economy, perbankan Syariah juga berfungsi sebagai mesin wirausaha (entrepreneurial engine). Implikasi fungsi kedua tersebut akan sangat luas dalam mendidik industri perbankan dan masyarakat terutama dalam upaya menciptakan atmosfer keadilan, kesetaraan (fair relationship), dan kebersamaan yang sangat diperlukan dalam upaya pembangunan Indonesia kedepan. Wallohu Alam bishowab.

Yudi Ahmad Faisal

Kandidat Chartered Islamic Finance Professional (CIFP) INCEIF

Dosen Fakultas Syariah Universitas Islam Bandung dan Anggota ISEFID KL

Membicarakan penggunaan terminology memang sangat menarik, ada kalanya diskusi tentang konteks dan teks selalu menimbulkan kontroversi. Katanya teks selalu gagal dalam memahami realitas yang sangat kompleks, sedangkan konteks dikatakan terlalu menghamba kepada kepentingan rasionalitas, sehingga ketika teks di kontekstualisasikan selalu ada unsur pemikiran manusia yang sangat mendominasi hasil dari sebuah pemikiran terhadap sesuatu.

Dalam bidang teologi, perbincangan antara teks dan konteks selalu sengit. Bagi mereka yang pro terhadap tekstualisme dalam menerjemahkan Al Qur’an misalnya, beranggapan bahwa dalam menerjemahkan al Qur’an harus selalu merujuk kepada makna bahasa dan penjelasan para ulama terhadap historical background dari perkembangan makna tersebut. Bagi mereka yang pro penerjemahan secara kontekstual, Al Qur’an harus selalu berdialektika dengan dunia kontemporer atau kekinian. Oleh karenanya penerjemahan Al Qur’an harus selalu dikontekstualisasikan dengan setting kontemporer.

Dalam dunia ekonomi dan keuangan Islam, perdebatan antara teks dan konteks termasuk hal yang tidak bisa terhindarkan. Teks direpresentasikan dengan istilah “form”, sedangkah konteks dengan istilah “substance”, sehingga ada kalanya penulis atau pengamat ekonomi dan keuangan Islam memberikan judul yang bombastis tentang perkembangan ini. Misalnya judul “form vs substance”, yang membicarakan mengenai perdebatan intelektual tentang pengkreasian produk-produk berbasis Syariah, apakah cukup dengan mengambil produk dari fiqh (Islamic commercial law) sehingga disebut sebagai fiqh based product, ataukah perlu dikombinasikan dengan unsur lain seperti maqoshid as Syariah (tujuan-tujuan Syariah). Bagi mereka yang pro dengan pendekatan kedua, merasa bahwa dengan hanya mengembangkan produk berdasarkan pendekatan fiqh maka akan menjurus kepada kekuan, karena tidak bisa berdialektika dengan realitas diluar definisi dan batasan fiqh itu sendiri terutama realitas sosio-ekonomi.

Contoh perdebatan mengenai form vs substance contohnya bisa kita temukan dalam perdebatan mengenai produk bay al innah (jual & beli kembali) ataupun produk tawarruq.

to be continued..

tpp