Rethinking Islamic Economics

The emergence of Islamic viewpoints on economic issues under the umbrella of Islamic economics has captivated much interest especially in its practical manifestation in Islamic banking and finance. In light of the failure of mainstream economics to address many pressing issues, and hence the need for alternative views, this paper offers assessments of Islamic economics whether (i) it is relevant to this need, (ii) it has progressed to the extent that it has been made to become relevant, and (iii) it is also in need of reform. While I argue that Islamic economics is relevant, it falls short of expectations on the second issue. The major reasons being: (a) the lack of progress in Islamic economics theory, (b) the similarity of Islamic economic practices in the forms of Islamic finance to conventional finance, and (c) its limited ability thus far to embrace multi-perspective views. On the basis of these, I conclude that Islamic economics is also in need of reform.