Word of God: "What do you give (loan) in the form of usury to human property betambah, then it does not increase with Allah" (QS.ar-Rum: 39)
In the view of most humans, the loan with interest rate system will be able to help the local economy which in turn will boost economic growth. This assumption has been a strong belief in almost everyone, both economists, pemeritah or practitioners. There was also a strong belief in the Muslim intellectuals who are not educated background in economic education. Because it is not strange, if state officials and directors are often pleased to report the number of bank loans disbursed to small business owners a few tens of trillions of dollars. That's views and beliefs of most people today in view of the credit system with the instrument of interest. That's the view of the material (zahir) man who is often limited.
General view of the above disputed by Allah in the Qur'an Surah Ar-Rum: 39, "What" What do you give (in loans) in the form of usury that human wealth increases, then it does not increase with Allah "(QS.ar -Rum: 39).
These verses convey a moral message, that the loan (credit) to the system of interest will not make the economy grow in the aggregate and fair. View of the Koran are briefly contrasted sharply with the view of most humans. Human stated that the loan with interest will increase the economic system of society, while according to God, loans with interest not to make the economic system grows and develops, because usury is empirically has caused harm to the economy, especially when viewed from a macro perspective
It should be noted, that the Al-Quran talk about riba (interest) of that paragraph in the context of the macro economy, not the "only" micro-economics. Even the macro economy is much larger. Muslims during this error is discussed in the context of microeconomic riba alone.
Talk about usury in the context of macroeconomic theory is to examine the impact of usury on the local economy in the aggregate (whole), rather than individuals or perusahaann (institution). While talking about the scope of micro usury, riba is discussed only in terms of the contractual relationship between debtor and creditor. Usually discussed what percentage interest to be paid by the firm A or X as the debtor to the creditor. Also, if the debtor paid interest of its burdensome or beneficial. This is called the study of micro-economic perspective.
In fact in verse, the Quran highlights the practice of usury which has been systemic, ie the system of usury which has become ubiquitous, usury has become an instrument of economic, as is believed by adherents of the capitalist economic system. In the capitalist system, the bank interest rate (interest rate) is the heart of the economic system. Almost no side of the economy, which escaped from the bank interest rate credit mechanisms (credit system). Starting from a local transaction on all of the economic structure of countries, to international trade.
If usury has become an established system and has been crystallized so strong, then the system will be able to cause harm to the economy at large. The impact of the economic system of usury is very dangerous to the economy.
First, usury economic system has generated a lot of the economic crisis everywhere throughout history, since 1930 until today. Usurious economic system has opened up opportunities for speculators to speculate that could lead to volatility in the economies of many countries. Usurious economic system into the main stem causes the unstable value of money (currency) of a country. Because the money will always move from a state of low interest rate riel to the state rate riel higher due to the large speculators seek to profit by saving his money where interest rates are relatively high riel. Business benefit in this way, in economic terms is called arbitraging. The interest rate riel here meant is the interest rate minus the inflation rate.
Second, under the usurious economic system, economic growth gap occurred in the world is getting a constant, so that the rich get richer the poor get poorer. IMF data show how the gap occurred from 1965 until today.
Third, interest rates also affect the investment, production and create unemployment. The higher interest rates, investment has declined. If the investment decline, the production also decreased. If production declines, it will increase unemployment and poverty.
Fourth, macroeconomic theory also teaches that interest rates will be significantly raises inflation. Inflation is caused by the inflation rate is induced by human hands. Inflation is an abomination such as Islam, as written in the book Dhiayuddin Ahmad Al-Quran and Poverty Alleviation. Inflation will reduce purchasing power or impoverish people with cateris paribus assumption.
Fifth, usury economic system has plunged the developing countries to the debt trap (debt trap) is in, so as to pay interest only are they difficult, let alone together anyway.
The six, in the context of Indonesia, the impact of interest not only to the extent that, but also have an impact on the state budget funds depleted. Interest has been weighing on the state budget to pay interest on the bonds to conventional perbakan has assisted with the BLBI. In addition to interest on the bonds also pay interest on SBI. Payment of interest is what makes our state budget deficit every year. Should we budget surplus every year in mumlah great, but because of the monetary system of usury Indonesia using the system, then no doubt, its impact on the people of Indonesia are very terrible.
With these facts, the true God who says that the system does not foster community economic interest, but it destroys the joints of the country's economy, the nation and the society at large. Therefore, in continuation of the verse is in verse 41 reads: "It has been real damage on land and at sea, caused by human hands, so that we inflict to them the result of some behavior mereka.Mudah I hope they go back to the path of Allah"
The context of this verse is actually related to the impact of usury monetary system run by humans. Damage the world economy and Indonesia today is a crisis induced by human hands that apply usury contrary to the values of humanity and justice.
Furthermore, in discussing the impact of usury, we need to quote Prof. A. M. Sadeq (1989) in his article "Factor Pricing and Income Distribution from An Islamic Perspective", published in the Journal of Islamic Economics. He mentioned that pengharamkan usury in the economy, at least, due to four reasons;
First, usury economic system has led to injustice in society, especially for capital providers (banks) who would receive the benefits without the borrowers want to know whether these funds make a profit or not. If the borrower of funds to make profits in the business, the question of injustice might not appear.
However, if the venture capital business of the borrower's bankruptcy, the borrower must pay back the capital borrowed capital from investors plus interest on the loan. Under these circumstances, the borrowers of capital had already fallen in bankruptcy as well as override the stairs, and is not this something that is not fair?
Second, the economic system of usury is also a major cause of force imbalance between investors with borrowers. The great advantage obtained by the borrower which usually consists of a giant industrial groups (conglomerates) are only required to pay their loan plus interest on the loan in a relatively small amount compared to the billions of their profits.
Though the store of money in banks is generally composed of people of lower middle. This means that the huge profits earned by the conglomerates of the loan is not worth the money be felt by the providers of capital (the store of money in the bank), which generally consists of the lower middle.
Third, usury economic system would discourage investment because of the high level of interest in the community, the less tendency for people to invest. Society will be more inclined to save their money in banks because of a greater profit is obtained due to high interest rates.
Fourth, the interest is considered as an additional cost of production for the businessman to use loan capital. High production costs would have forced companies to sell products with higher prices as well. The spike in the price level, in turn, would invite inflation due to the lack of purchasing power of consumers. All the negative impact of these usurious economic system gradually, but surely, will mengkeroposkan economic foundations of the people. The economic crisis must not be separated from the adoption of usury economic system as mentioned above.
Can not be denied that usury economic system would undermine the economic foundations of society. It was seen clearly in the conventional banking practice embracing system of usury. The interest rate used as a reference for the benefit of the financiers. Banks do not want to know if the borrower does not make a profit or return on capital loans, the borrowers have to pay for essential capital of the loan plus interest on the loan. The higher the interest rate in a country, the higher the level of profits obtained by the financiers and the damage of joints due to the negative impact of the economic race usurious economic system in society.
Similarly, the result of too high rates of interest charged to borrowers, the more difficulty the borrower to repay the loan interest. Moreover, the conventional economic system, the bank usually not very selective in launching credit to the public. The bank did not want to know if the money borrowed was used in the productive sectors or not, what matters to them is all of the available funds can be channeled to the public. Attitude that this is what the bank which led to increasing bad debts in the economy due to the borrower's debt menunggaknya capital could not be repaid when due to the bank. As a result, banks will have an impact on funding the deficit greatly affect the level of production in society.
Usurious economic system is also a major cause of instability of the value of money (currency) of a country. Because the money will always move from a state of low interest rate riel to the state rate riel higher due to the large speculators seek to profit by saving his money where interest rates are relatively high riel. Business benefit in this way, in economic terms is called arbitraging. The interest rate riel here meant is the interest rate minus the inflation rate.
For example, if the interest rate in Indonesia, say, 12% with 8% inflation rate, the interest rate is 4% riel (12% - 8%). This means that although the nominal interest rate (interest rate minus the inflation rate before) high in Indonesia, are not automatically affect the investor to buy the yen, because basically the interest rate riel in Indonesia is much lower than the rate in countries riel other.
This is the main cause of the decline in value (depreciation) amount due to lower demand for yen. High and low value of the rupiah was strongly influenced by the amount of demand and supply in the Euro money market. The more the number of requests Rupiah, the higher the value of the Rupiah currency, and vice versa. So also with the bid, the high number of outstanding amount on the market, while demand for a low amount, then the rupiah value will decrease, and vice versa.
Actually, this is what is prevailing in Indonesia, where let alone a foreign businessman, the businessman in this country are more likely to buy the dollar or other foreign currencies by selling yen in the foreign exchange market. It also means the loss of foreign funds into Indonesia, coupled with the flight of domestic funds to the outside so that it will greatly affect the availability of adequate funds for economic development capital. This is clearly exacerbated the decline in the value of the Rupiah and the lack of foreign and local funds available for economic development, which in turn, will lead to a prolonged economic crisis.
Indeed, it must be admitted that the low value of Rupiah, further strengthening the competitiveness of Indonesian export commodities in international markets because of its relatively inexpensive price of the commodity exports on international markets when purchased with foreign currencies.
However, the decline in the value of this amount will not significantly influence the composition of the raw material for most export commodities of Indonesia is made up of raw materials imported from foreign countries. In other words, rising prices of raw materials as a result the high value of the currency (appreciation) will cause the foreign obvious cost to produce export commodities will be more expensive so that the end product of the commodity to be sold at a great price too. This suggests that the decline in the value of the excess amount will not be given the competitiveness of Indonesian exports in international markets.
Above problems, in fact, never happen if the Islamic economic system adopted in the country's economic system. Why not? Because the value of money will not be affected by riel interest rate differential, because Islam does not recognize the economic system of interest (riba). This is what causes the value of money in interest-free economy is experiencing a dangerous volatility.
In Indonesia, the economic system of usury has caused adverse effects to the economy of Indonesia. Our state budget funds annually drained to pay interest rates in large numbers, both for the interest of foreign loans, especially to pay interest on government bonds to banks usury system.
The amount of the obligation to pay interest on government bonds to banks recapitalized highly unusual. In 2001 alone, interest on bonds payable amounting to Rp 61.2 trillion national budget. And this continues every year until now, although tends to become smaller. Therefore, the burden of paying interest, it is not surprising that our state budget deficit continuously. In 2002 the state budget deficit of Rp 54 trillion. In 2003 the deficit of Rp 45 trillion, in 2004 to Rp 35 trillion deficit. Budget deficit in 2004 was the last, because state funds are depleted bank interest amounting to Rp 68 trillion. Even now, our budget is still a deficit, because nearly a third of the state budget funds earmarked for interest payments. So, for our country selemat of the threat and impact of usury which continue to undermine the state budget, should be aware of the Indonesian people to return to the application of Islamic economic system.
Created By : Gusti Pares (Cui Guan)
Faculty of Economics and Business
Sriwijaya University - Indralaya - South of Sumatera Indonesia
