The circular economy and its possible collaboration with Islamic economics and finance
This chapter examines the possible relationship between the Circular Economy and Islamic (economics and finance). The fundamental idea at the base of this article is that the circular economy, with all its limitations, does present a different model of decision-making, i.e., one that sees decisio...
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Main Authors: | , |
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Format: | Book Chapter |
Language: | English |
Published: |
Springer Nature
2021
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Subjects: | |
Online Access: | http://irep.iium.edu.my/98725/7/98725_The%20circular%20economy%20and%20its%20possible%20collaboration.pdf http://irep.iium.edu.my/98725/ https://doi.org/10.1007/978-981-16-6061-0_6 |
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Summary: | This chapter examines the possible relationship between the Circular
Economy and Islamic (economics and finance). The fundamental idea at the base
of this article is that the circular economy, with all its limitations, does present a
different model of decision-making, i.e., one that sees decisions being made not
based on a narrow individual self-interest. The circular economy promotes the view
that economics and finance must incorporate “others” into one’s decision-making.
Islamic Banking/Finance has developed over the last three decades and while it has
served the needs of providing a Shariah (read legal) compliant financing, reservations
have been voiced as to its social impact and its contribution to the real economy
that seems to have also contributed to the positive shift in the direction taken in
IBF in the last decade. The chapter then presents the main highlights of the circular
economy discourse and takes a critical look at some of its limitations. The authors
argue that, despite its limitations, the circular economy provides an opportunity to
further strengthen the preliminary re-alignment that has taken place in current Islamic
Banking/Finance discourse, especially the development of social finance. The goals
and overall approach of IBF must be reformulated to serve the needs of achieving
socio-economic justice. Since Islamic finance is still dominated by Islamic banking,
reforms made by Islamic banking authorities and IF educators will have a significant
impact on developing the direction of the discipline. Instead of narrow focus on
maximizing shareholder returns, these reforms will allow for promoting a genuine
stakeholder model where decisions made by individual agentsmust include a concern
for others, including the environment. The chapter generally uses secondary data and
discourse/content analysis involving literature written over the last three decades. |
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