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1 Abstract Islamization of Knowledge and the Development of Islamic Economics and Finance- The Human Capital Imperative By Mohamed Aslam Haneef Professor, Department of Economics & Director Centre for Islamic Economics International Islamic University Malaysia Abstract The Islamization of Knowledge (IOK) agenda has been one of the major intellectual Muslim responses to modernity. It has also contributed to the development of Islamic economics and finance. While many shortcomings exist, labelling IOK as a failure is rather disingenuous. This paper attempts to do the following: Section 1 provides a concise overview of why there is a need for IOK and what IOK is according to its main proponents. Section 2 will systematically detail 'what IOK involves', giving examples from economics and finance, while trying to answer some of the criticisms leveled against the IOK project. Section 3 will then focus on what the author sees as a major challenge for genuine IOK: the human capital issue i.e. the lack of qualified Islamizers. Using preliminary data from the Malaysian case, it will be argued that there is an imbalance in the backgrounds of current talent (lecturers) found in Islamic Finance, and calls for urgent measures along the lines of the IOK agenda to rectify the situation through a well-planned program of 'Continuous Education' in the short term and better collaborative human resource planning among academic institutions involved in Islamic economics and finance education. PREPRINT: PLEASE DO NOT QUOTE OR DISTRIBUTE

2 Conference paper (excluding author names and affliations) Islamization of Knowledge and Developing Islamic Economics and Finance: The Human Capital Imperative 1 Introduction Islamization of Knowledge (IOK), despite being discussed for almost four decades, still receives mixed reactions in intellectual circles. Proponents of IOK see it as the intellectual dimension of the resurgence of Islam that occurred in numerous parts of the world in the second half of the 20 th century. With differing levels of arguments, this group has tried to put forward various IOK programmes and workplans in various disciplines with the aim of developing contemporary bodies of knowledge in economics, sociology and other primarily social sciences that are reflective of Islamic perspectives of those disciplines or even as a phase in developing new disciplines to study human behavior. This paper attempts to do the following: Section 1 provides a brief but concise overview of why there is a need for IOK and what IOK is according to its main proponents, i.e. Al-Attas and Al- Faruqi (and the IIIT). Section 2 will systematically detail out the IOK agenda in terms of what IOK involves, giving examples from economics and finance, while trying to answer some of the criticisms leveled against the IOK project. Section 3 will then focus on what the author sees as a major challenge for genuine IOK: the human capital issue i.e. the lack of qualified Islamizers. Using preliminary data from the Malaysian case, it will be argued that there is an imbalance in the current talent (lecturers) found in Islamic Finance and calls for urgent measures to rectify the situation through a well-planned program of Continuous Education in the short term and better collaborative human resource planning among academicinstitutions involved in Islamic economics and finance education. Section 1 2 IOK According to the Major Proponents The present discourse on IOK can be traced back to two major figures: Syed Muhammad Naquib al-attas, whose major works are books and monographs published in the second half of the 1970s, mainly by the Muslim Youth Movement of Malaysia (ABIM) and later on publications of the International Institute of Islamic Thought and Civilization (ISTAC-IIUM), founded in 1987, of which he was Founder-Director. The other major figure or actually group of individuals, are those associated with the International Institute of Islamic Thought (IIIT) based in Herndon, 1 Paper submitted to the 10 th International Conference of Islamic Economics and Finance, Doha, Qatar March Parts of Section 1 are adapted from Critical Survey of Islamization of Knowledge(2 nd Edition, 2008), International Islamic University Malaysia Press, Kuala Lumpur.

3 Virginia established in 1981 including its past presidents such as Ismail Raji al-faruqi (died 1986), Abdul Hamid Abu Sulayman and Taha Jabir al-alwani, who through their writings have developed the more popular version of the IOK agenda. Rationale for IOK The backward position of the ummah in present times forms the backdrop of why reform is needed. Faruqi (1982) names this the malaise of the ummah. To Faruqi, the root cause of the malaise is seen to lie in the present dual education system in the Muslim world : one secular and modern, the other religious and traditional. In addition, the lack of Islamic vision (among the Muslims and especially their leaders) has not allowed the education system to truly reflect Islamic ideals and hence created mediocrity among teachers and students who are unable to confront the alien ideologies faced in universities. Al-Faruqi (1981, 1982) also sees modern disciplines as especially the social sciences as incomplete since it overlooks revelation as a source of knowledge and this rejection of revelation violates a crucial requirement of Islamic methodology, hence the need for IOK. Abu Sulayman also posits that there has been a revelation-reason split in the west that cannot be emulated in Islam, hence there is a dire need to rectify this revelation-reason relationship, redefine the scope of knowledge and establish an Islamic infrastructure of education (including the system). Al-Alwani (1995) supports this by his view that modern knowledge has become a positivistic, one-book reading (universe only), hence inadequate from an Islamic perpective that requires a two book reading (revelation and universe). Al-Attas (1978), while acknowledging that the problems faced by Muslim societies cannot be separated from the external factors i.e. of the historical confrontation with western culture and civilization and the consequences of colonization (including the dual education system), locates the primary reason for this backwardness as being due to internal causes, more specifically to what he terms as the loss of adab within the Muslims themselves. By adab, al-attas is referring to the discipline of the body, mind and soul that have resulted in loss of justice, which betrays an internal confusion in knowledge. This confusion of knowledge is due the inability of Muslims to distinguish true knowledge from knowledge that has been infused with the western vision. To him (1978, p. 127) the greatest challenge for Muslim scholarship is the challenge of knowledge as conceived and disseminated throughout the world by Western civilization, i.e. knowledge interpreted through the prism the worldview, the intellectual vision and psychological perception of western civilization over the last 300 years. Many others also contributed: Ragab (1995) while accepting the important role to be played by social sciences in modern societies, sees the underlying assumptions of modern social sciences as being unacceptable from an Islamic perspective; Idris (1987) views modern knowledge as being

4 based on false assumptions of materialistic atheistic philosophy ; Hadi (1984), while agreeing to the need for modern knowledge, sees its philosophical basis as being profane and secular, hence unacceptable for Muslims; Kazi (1993) sees modern knowledge as not being equally effective in an Islamic framework since the basic assumptions of the two systems are different; Abu Fadl (1988) sees the need for IOK due to the anomalies created by modernity (and modern sciences) that abandoned God/religion; Ashraf (1984) and Sardar (1989) also cite the different worldview reason as the core of our problem with modern science, although differences as to what IOK is and what it entails are clearly seen from these writers papers. What is IOK From the numerous scholars above, one can conclude that the IOK agenda is a discriminating agenda. Since modern knowledge, including that of economics, is not value-neutral, i.e. is based on the western worldview and since this western worldview differs fundamentally on some very important foundational concepts, the knowledge structures/systems or disciplines built on them cannot be accepted as they are and need to be subject to a process of evaluation, sifting and modification. This in essence is what the IOK is all about. IOK calls for critical engagement with modern knowledge in order to facilitate the deliverance of knowledge from its interpretations based on secular ideology; and from meaning and expressions of the secular. While the human/social sciences are the primary branches of knowledge that are the focus of Islamization, the natural, physical and applied sciences are also involved in terms of their underlying philosophical foundations, the interpretations as well as the formulation of theories. In fact, according to al-attas (1995) the task of Islamization of knowledge must involve A critical examination of the methods of modern science; its concepts, presuppositions, and symbols; its empirical and rational aspects, and those impinging on values and ethics; its interpretations of origins; its theory of knowledge; its pre-suppositions on the existence of an external world, of the uniformity of nature, and of the rationality of the natural processes; its theory of the universe; its classifications of the sciences; its limitations and inter-relations with one another of the sciences and its social relations. Faruqi (1982) also sees IOK as the process of recasting knowledge as Islam relates to it. It involves a wide scope of activities including ultimately, to overcome the dichotomy between modern secular and traditional Islamic systems of education. IOK also aims to produce university level textbooks recasting some twenty disciplines in accordance to the Islamic vision and while mastering modern knowledge is a first prerequisite for IOK, this must be followed by integrating the new knowledge into the corpus of the Islamic legacy by eliminating, amending, reinterpreting and adapting its components as the worldview of Islam and its values dictate.

5 While many have criticized the IOK project, using its failure to produce these textbooks as proof of the futility of the project, it is felt that the more fundamental issues involved relate to the methodological issues raised by al-attas and Faruqi although in the case of the latter, it was the textbook goal that was unfortunately given too much attention without sufficient thought being given to developing the Islamizers and issues concerning methodology. Even by looking at the writings of Faruqi, this becomes very clear when one asks how to integrate modern knowledge into the corpus of Islamic legacy unless one is equipped with the necessary requirements which requires the Islamizer to redefine, reorder the data, to rethink the reasoning and relating of the data, to reevaluate the conclusions, to re-project the goals and to do so in such a way as to make the disciplines enrich the vision and serve the cause of Islam. Getting the Islamizers to understand and apply the methodological categories of Islam (Faruqi, 1981), namely, the unity of truth, unity of knowledge, unity of humanity, unity of life, the telic character of creation, the subservience of creation to man and of man to God must replace western categories and determine the perception and ordering of reality, needs to be given greater attention. From the definition and scope presented by al-attas and to a lesser degree by al-faruqi, it is quite clear that IOK is primarily an epistemological and methodological concern and involves some sort of integration of knowledge based on Islamic sources and that generated by modern social science methods ; it is a research and theory building effort, meant to restore scientific enterprise in general and the social sciences in particular, to the correct path of integration of revelation and observation of the real world; it cannot be a simple-minded addition and subtraction process but is a serious process of creative engagement with modern social sciences (Ragab, 1997). The essence of the Islamization process is the systematic movement from the other-than-islamic ontology and epistemology to the Islamic ontology and epistemology. That essential change is the foundation upon which the methodological shift is based. Therefore, it is essential for the Islamizers--before undertaking any actual substantive attempt at Islamization--to take stock of the Islamic ontological and epistemological assumptions. This is an absolute prerequisite for any attempt to "Islamize" a social science discipline, a subject, or even one social science concept. The present writer is of the view that one reason there has been criticism of the IOK project as well as lack of success in developing the reference materials and textbooks desired, is due to the lack of attention given to developing the qualified Islamizers. Another has been the relatively under-attention given to developing the foundations of disciplines, especially those relating to its philosophy from Islamic perspectives. Section 2 Islamization of Knowledge: What It Involves Ever since the First International Conference on Islamic Economics held in Makkah al- Mukarramah in April 1976 (and even before), there has been a genuine attempt to develop

6 Islamic economics i.e. developing conceptual, theoretical and applied dimensions of an Islamised, organized body of knowledge that in varying qualities, somehow integrated knowledge derived from revelation with that of modern knowledge, mainly obtained from neoclassical economics but also benefitting from other schools of economics, social/political economy. The works have generally covered most if not all areas found in modern economics, although without a doubt, banking and finance has taken the biggest share of resources, both human and financial. The IOK agenda has been utilized in the process of developing Islamic economics and finance, although most Islamic economists do not pay specific attention to what the IOK entails. In this, Islamic economists have also done injustice to the process of developing Islamic economics and are also guilty of what critics of IOK say. This is especially so in the area and practice of Islamic banking and finance. Critics point to the patchwork argument, the replication argument and the bad imitation argument, all of which apply to contemporary Islamic finance (especially in its practice). Many of these criticisms have also been presented in papers in this very series of conferences held over the last decade or two. Developing Islamic economics via the IOK agenda has been dismissed by those who are concerned by the inability of the discipline to move forward or to provide original breakthroughs. Nevertheless, the present writer does not share the position of these critics of IOK. Even if we say that Islamic Economics is stagnant or in crisis, putting the blame on the IOK agenda or rather a misunderstood IOK agenda is intellectually misguided. As pointed out in Section 1, IOK, as explained by its proponents is basically an epistemological and methodological concern. It is a process whereby creative engagement and synthesis happens, where knowledge from the twin sources of revelation and the universe, i.e. revealed and acquired knowledge, is integrated via a new methodology, one that is able to simultaneously deal with those twin sources. If we have not understood this epistemological foundation and have not developed this new methodology and hence not really undertaken genuine Islamization, one cannot dismiss the project. Even if one accepts the statement of Zaman (2012) that universities having an Islamization agenda have failed to produce Islamic economics after decades of being established, one needs to look at the causes of that failure. Again, the present writer is not convinced that the experiences (in Islamabad and Kuala Lumpur) have failed. Just from the criteria of quality of graduates and to those who have continued playing a significant role in the development of Islamic economics and finance, the present writer can attest to the success of the IIUM as one of the main developers of talent in both academia and industry, globally. While going back to the Qur an and the sunnah or emulating the Prophet s example etc.is never disputed by proponents of IOK, this is hardly a straight forward task. More pertinent questions puts forward by the IOK agenda are how to deal with the Qur an, how to deal with the Sunnah, how to deal with our turathand how to deal with modern knowledge- all serious questions of methodology. How to interpret the shari ah, what rules to apply, how to recognize and reconcile the absolute and the flexible, how to deal with what is divine and what is the practice of human beings in different ages- these are all questions that the IOK agenda puts as its agenda.

7 We may disagree with what some proponents of the IOK agenda say, but one cannot dismiss the questions in the agenda itself, without giving intellectually sound reasons. Many of the critics of the IOK project like Fazlur Rahman (1988), ZiaudinSardar (1989) and more recently, Tariq Ramadan (2009) have to my mind, failed to appreciate the details of the IOK project. For example, Fazlur Rahman s early critique of the IOK gave two major points: rather than focusing on knowledge- which to him was neutral- focus should be on developing the human being with a Qur anic mind, i.e. one that applies knowledge Islamically. The second argument is that rather than start with modern knowledge, one should focus first on our turath, especially to ensure that we have a correct ontological, methodological and axiological position. This is to ensure that we are on the right track and truly have an Islamic base. To a great extent, this is also the essence of the argument put forward by Sardar and Ramadan as well. If one analyses the arguments above, one would see that even if we wanted to develop those with minds that the Qur an would like to see, it requires an agenda. How do you develop these people without a proper plan to answer the questions of how to deal with the Qur an, how to deal with the Sunnah, how to deal with the turath etc. As for starting with the turath rather than modern knowledge, one needs to realise the context of the IOK agenda. It is focused on the human resource planning agenda of Muslim countries, where a large majority of students studying at the tertiary level are studying modern conventional disciplines, especially those studying in the US and UK/Europe. It is to these students that Faruqi sworkplan is addressed. Hence, the need to ensure that they did burn their conventional textbooks. The IOK agenda, having undergone more than three decades of debate and itself evolving and developing into a legitimate approach to be adopted by contemporary Islamic scholarship has been a very inclusive intellectual agenda. This has been one of its strengths. While by definition, it caters for scholars who are primarily educated in modern disciplines, it has also developed a path for those who are educated in Islamic revealed knowledge. This can be seen from the works of Al-Attas, who has always stressed the need for a correct understanding of Islam and its worldview. This is also obvious in the Six discourses of Al-Alwani, who focused primarily on the turath in the first five of the discourses. Rather than the turath vs. modern knowledge or this either-or argument, the bigger issue that the IOK agenda states is the the central thesis that to build contemporary bodies of knowledge today, both these inputs (i.e. modern knowledge and the Islamic revealed knowledge) may not by themselves be answers to solve contemporary problems faced by the ummah/humanity. The solution is to be sought by some kind of creative integration/synthesis between the two, but always with the Islamic foundations as the base. However, this integration/synthesis requires a critical evaluation of both inputs. On the one hand IOK calls for a critical evaluation of modern knowledge from an Islamic perspective in order to know what we can accept, what we cannot and what we have to modify (and why this is so),

8 followed by how to develop the integrated bodies of knowledge later. On the other hand, IOK also calls for a critical evaluation of what Islamic legacy/heritage is and how it can contribute to the legitimate development of contemporary bodies of knowledge that must address the problems of today, including even asking whether the problems themselves are real and relevant- based on the Islamic worldview. In addition, this task is meant for the academic community. Knowledge development in the IOK agenda requires academics who are able to ask among others: a. what from each input? b. how much from each input? c. how to genuinely integrate? These three questions are actually very challenging and any academic who has had to teach an Islamic economics and finance course will realize the immense difficulty in answering these questions. Many a time, even the first question is not answered satisfactorily and materials are unavailable. The 14 week semester poses great challenges to the second question. Figure 1 As mentioned, the quality of the Islamizer, his/her background and his/her ability to understand both inputs and to do what needs to be done, pose the biggest obstacle in delivering on the third question. Genuine Islamization cannot occur if the Islamizer is unable to answer the above

9 questions. What makes the task even more challenging is that the Islamizer needs to master not only the substantive knowledge from both inputs, but must also be able to understand the methodological questions relating to knowledge developed from both inputs, i.e. how the revelation-reason split that occurred in the west causes imperfect output; how the stagnation of thought and the weakness in the Muslim world affected the development of empirical sciences and knowledge. In many graduate programmes of economics and finance taught in Muslim countries, the above dichotomy or dual education system still persists. Even where attempts at integration have taken place, the development has been very slow since the qualification of Islamizers is still not up to the mark. As stated by Zarqa(1989), there is a need to develop the mukhadramun, Islamizers who have mastered both inputs and who are able to develop and use new methodologies to handle both inputs, hence being able to undertake genuine Islamization. The inability to focus on developing these qualified Islamizers, sometimes has led less careful scholars to dismiss the IOK effort as having failed. Even if the results thus far is not as what we expect or if we have developed patchwork solutions and bad imitations, the reason is due to the human resource challenge in our midst. The reason is because we have not given sufficient attention to the education of the educators. While Ph.Ds may be obtained in either areas of the turath or in areas of modern disciplines, this has not been supported by an equivalent emphasis on developing the ability of the academics/educators to conduct genuine IOK. One area that has seriously lacked in attention is the area of foundational studies. By foundations in brief I mean developing the philosophy of a particular discipline, in this case developing a sound philosophy of Islamic economics and finance and all relevant areas connected with it. Most Ph.Dprogrammes in economics and finance rarely give any attention to discussing the philosophy and history of that discipline. Methodology 3 is a misunderstood and misused/abused word in our Ph.Dprogrammes, usually focusing on the latest econometric methods currently in vogue 4. As far as the turath is concerned, in the IIUM, most students join the Department of Fiqh and Usul al-fiqh. Many also choose areas of Islamic banking and finance to write their thesis. While this application of the turath to banking and finance is welcome, the problem is that the overly legalistic approach adopted and the lack of banking and finance courses required for students may not sufficiently enable creative enagement to take place. This issue of correctly integrating both inputs whether in the theoretical works of the IOK programme or in courses and theses in specific Departments of study depends fundamentally on the quality of the lecturers we have. Without proper knowledge of what IOK is and without proper guidance to graduate students in their theses, we can be quite sure that we will not get the 3 Please see Haneef/Furqani (2011) 4 It is also becoming a trend in Ph.D theses that the methodology i.e. the technique used directs the thesis rather than the importance of the topic or problem to be investigated. Many papers in highly reputable journals are also replications of the same data set using different techniques.

10 outputs and outcomes desired. The next section takes a look at who our current Islamizers are, their areas of specialization and whether this could be a problem in undertaking genuine Islamization in the areas of Islamic economics and finance. For this purpose, we take the case study of Malaysia and present preliminary results of a talent database initiative undertaken since December Section 3: Current Islamic Finance Educators: Is there a Problem? The Entry Point Project 7 (EPP 7)- Islamic Finance Education As part of the 13 education projects under the Economic Transformation Programme (ETP) sponsored by the government of Malaysia, Entry Point Project 7 (EPP7) focuses on Islamic Finance Education. The aim of the EPP7 ( ) is to assist in making Malaysia the centre for Islamic finance by focusing on Islamic finance education. Islamic finance and Islamic finance education are seen as potential income earners for Malaysia in addition to its efforts to promote Islamic finance globally. Being the pioneer university to offer Islamic economics and finance in the country, the International Islamic University Malaysia (IIUM) was given the trust to lead the academic programmes and human resource dimension of the project, together with Bank Negara Malaysia (focusing on the industry players). The EPP7 has two initiatives: a curriculum development initiative and a talent development initiative. This paper will focus on the latter. 5 When we talk about Talent in Islamic finance, there are at least threecategories one can discuss: educational institutions, the market/industry and the regulators/ government agencies. This paper focuses on educational institutions and goes even more specifically to the educators in those institutions. 6 Hence the logic is that in order to ensure the sustainable development of Islamic finance in Malaysia and globally, it is important to have programmes of international quality and to have reputable and qualified Islamic finance educators. 7 Hence, under the talent development initiative, there are three main activities: a. developing a baseline study i.e. a database of existing Islamic finance educators i.e. academics teaching in five related domains i. banking and finance ii. Economics iii. management and marketing iv. accounting and governance v. shari ah and law 5 Talent Development Initiative of the EPP7 team members consist of Professor Arif Hassan, Dr. Mustafa Omar Mohammed and Mohamed Aslam Haneef. 6 The other important sub-category under talent in educational institutions would be the students, who actually end up in all the categories. This paper does not discuss students directly but acknowledges that the quality of educators plays a major role in the quality of students/graduates. 7 The issues of curriculum and human resource in Islamic economics and finance is not a new one. As far back as the mid 1980s, there have been individual and collaborative efforts to improve curriculum as well as upgrade the quality of educators involved. One can cite early workshops organised by IRTI, the KENMS, IIUM and IIUI as examples of these early efforts. There has also been a relatively regular workshop on Teaching Islamic economics in many of the International Conferences on Islamic Economics (including the current series that started in 1976)

11 b. identifying gaps in education/knowledge of the educators and developing modules to fill those gaps c. conducting continuous education programmes to improve the competency and knowledge levels This paper will provide some of the findings in (a) above and while they represent the preliminary results of the Malaysian scene, one can make some extrapolations and generalizations for the global market place. In gathering and analyzing the data- in its present state- the study looks at the number of academics, their areas of specialization, the challenges facedand attempts to make some observations in relation to the Islamization of knowledge project. Base-line Study of Islamic Finance Educators The process of gathering data on the number of Islamic finance educators began seriously in mid-2013 with an attempt to gather this information from individual university websites. Despite Malaysian universities all having relatively well organized websites and online information, the first lesson learnttowards the end of 2013 was that the information required was not so easily and readily available. Different Faculties in universities had their own system of reporting and even when a uniform system was in place, the required information was very often not available, either due to the shortcomings of the university data gathering process or the lack of cooperation from the individual staff. The team thenused a Ministry of Education Malaysia database that conducted a more general survey of academic staff and their qualifications. While this database increased the number of Islamic finance educators and also assisted in getting information from all public universities having Islamic finance programmes, there were also shortcomings related to the way the categories and sub-categories were designated. Hence the second lesson learnt by mid-2014 was that the team basically needed to conduct its own survey using a dedicated template to meet our own needs. We have currently completed the template and hope to begin the process of improving further the existing database by early What we present in this study is data as of mid-2014 and is not fully accurate.

12 Fig 1: Islamic Finance Educators in Malaysia* According to Institutions and Domains (as of July 2014) BF SH+LW EC ACC & G MM TOTAL % IIUM UUM USIM INCEIF UiTM UniSZA KUIS UM INSANIA UKM USM UPM UNIMAS UMK UMT UTM UMP UNIMAP TOTAL *Preliminary figures- based on on-going research; not to be quoted for official purposes

13 Issue 1: The Overall Numbers: Importance of Institutional Base Figure 1 above basically presents the overall number of academics involved in the teaching of Islamic Finance in various institutions of higher learning in Malaysia. The figures clearly indicate that the IIUM, that was established in 1983 (hence not the oldest University in Malaysia), leads the way in terms of numbers of academics actively working in various interrelated domains connected to Islamic economics and finance. Older Universities such as UM, UKM and UPM although being instrumental in providing the initial human resources in IIUM, have continued to focus on conventional economics. Hence, universities with an Islamization agenda like IIUM has the institutional base on which dedicated programs in Islamic economics and finance can be developed. This can be seen also from the figures in USIM (est. mid 1990s), with the idea of integrating aqliyy and naqliyy sciences. In many conventional universities, faculty steeped in western economic tradition even resist any attempt to place Islamic economics in the Faculty of Economics, saying that it should be placed in the Islamic studies faculty. This has happened in many Muslim countries. Hence the claim that Universities that have been promoting IOK have failed is certainly not reflected in the above figures. One may be dissatisfied with the quality of the discourse or content of Islamic economics, but one cannot call it a failure. Another observation that is clear from the figures is that newer institutions that have dedicated Islamic finance faculties play a bigger role as seen from the figures of UUM. Although established in 1984 with the idea of focusing on Business Studies, they were churning out mainly conventional business graduates and not a main institution for Islamic economics and finance. Only a few years ago when they established a dedicated Islamic Business School (IBS), did the numbers focusing in Islamic finance start to increase significantly. In addition, we also have specialized institutions like INCEIF that only has dedicated graduate programs in Islamic banking and finance. Issue 2: Who are the Islamic Finance Educators and Which Domain Dominates, if Any? It is very important to know who the IF educators are, their educational background and their areas of specialization as this will significantly colour the curriculum of Islamic Finance and also the way Islamic Finance is presented. This issue is also of great importance in relation to the IOK agenda, i.e. who is undertaking Islamization and what are the gaps that need to be filled. The team initially thought that since we were discussing Islamic financeprogrammes and educators, the biggest number of educators should be in the domain of Banking and Finance. This would make sense since the programmes should be pre-dominantly banking and finance, requiring those in this domain to provide Islamic finance. The results obtained told us a different story.

14 Clearly, while BF did give a relatively high figure (101), the figures indicate that it is the Shariah and Law domain (108) that has the biggest number of IF educators. Figures are obtained based on how the educators themselves list their areas of specialization. Hence, what seems to have happened is that shariah/fiqh lecturers seem to be choosing Islamic banking and finance as their area of specialization. This then raises the issue of what is taught in Islamic Finance programmes. Do Islamic finance programmes have sufficient finance components? As far as the EPP7 Curriculum Initiative came up with, the Fiqh/Law component of an Islamic Finance programme should have between 10-15% of the curriculum in the area as a required component. Hence, what seems to be one major finding from the survey is that we seem to be misallocating resources as far as educators are concerned. Just to get a little more details of the educators who put themselves in the banking and finance domain, we also randomly looked up the basic qualifications of those in this domain. Again to our surprise, we found that about 3-4 out of the 10 we looked at also had shari ah/fiqh as their first degree. These academics then did their Ph.Ds in thesis only programs (either in the UK or in some Malaysian universities) where no course work in banking, finance and economics is needed. Topics of their theses would most likely be in a legal/fiqh issue in Islamic banking and finance or in some cases, dealing with fiqh issues in instrument development. Hence this means that the figure given in the BF domain is actually smaller than 101 and the figure for SH&L is bigger than 108. We could then have a situation of where almost half the total number of IF educators are actually shari ah/fiqh qualified, without necessarily understanding conventional banking, finance and economics. More analyses is required but these preliminary figures indicate that there is a major gap in the qualifications of a huge number of our IF educators. This gap must be filled and that is why a dedicated continuous education progarmme is proposed as part of the EPP7 agenda. However, there are also a very exceptions of those from the shari ah/fiqh domain who have taken extra qualification in banking/finance, but these are too few to mention. What this means is maybe another possible challenge of the ability and willingness of one group of IF educators, in this case those in shari ah/fiqh, to undertake courses in economics and finance. It is also very common to hear from those who conventionally trained to take courses in shari ah/fiqh, despite knowing the gaps and shortcomings of their current knowledge. The other side of this picture is the remaining IF educators in the domains of BF, Economics, Accounting/Governance and Management/Marketing. From a random look at their qualifications, a majority of them have conventional mainstream education right up to the Ph.D level. At least 50% of this group may not have had any exposure to the Islamic turath, especially those areas discussed in the IOK agenda. Whatever this group may know about Islam and its civilizational heritage as well as contemporary Islamic scholarship may be very basic. Often, this group would also get their information on Islam and Islamic economics, banking and finance from scholars who write in mainstream journals, some of who may not be very sympathetic to Islamic discourse. Hence there is a serious gap that has to be filled.

15 However, there are also quite a sizeable variety of educational backgrounds in this group. For example, some would have done their first degree in the IIUM or USIM that have Islamization/integration as their base. Some would have later on continued overseas in the UK or US where in general, they would have studied mainstream economics or finance. Some may have continued in Islamic institutions where some level of Islamization/ integration is attempted, while a smaller number have tried to switch areas to Shari ah/fiqh or Islamic studies. The last group is a very interesting case and requires greater analysis. Issue 3: What is the IF Curriculum and Are We Producing the Desired IF Graduates? This issue is very central to all universities, especially to public universities where public funds are used to develop university programmes and pay salaries of the educators hired to teach in those universities. As mentioned earlier, the EPP7 Curriculum Initiative has discussed and come up with an IF Curriculum standard, i.e. a general standard that identifies broad domains required in any Islamic Finance programme and some general guidelines for the number of courses in different domains in the curriculum. The clear result of our survey is that we seem to have too many people with shari ah/fiqh background as IF educators. In an earlier study of the B.Economicsprogramme of IIUM (Haneef/Amin 1997), it was found that the breakdown of courses was 30% conventional (including quantitative subjects and other general university requirements), 30% Islamic heritage (covering a wider definition of our heritage, including fiqh etc.) and 40% attempts at Islamization/Integration where modern economics was taught in a comparative manner with Islamic inputs and perspectives given to allow critical appreciation of both inputs as well as possible Islamic alternatives to economic theory. In addition, about 15% of the staff in the Department have a shari ah/fiqh background, the rest come from the other domains. The results of employer surveys conducted in the mid- 2000s indicated that employers were satisfiedwith the knowledge and qualities of the graduates. If we contrast this result to the EPP7 Focus group sessions in 2013/2014 involving employers from the IBF industry, the feedback is quite different. Besides the usual soft-skills deficiency, there was concern that many graduates from Islamic Finance programmeswere not sufficiently capable in finance. Some even mentioned that they would give preference to a graduate in conventional finance (with either some exposure to Islamic heritage or was able to attend further education/training programmes in Islamic finance) over someone in Islamic finance. This was, and should be very worrying to us as IF educators. Even if IF curriculum standards state that the curriculum must be that of a finance programme, it will be the quality of the IF educators who deliver the curriculum. Courses may be having very high powered titles, course outlines may be very impressive on paper but at the end of the day, it will be the IF educators that are going to deliver the material. We need to have the right balance of IF educators that represents the breakdown of courses in the curriculum. In addition, these IF educators must also be exposed to knowledge from the other domains required in an Islamic

16 finance programme. In addition, according to the IOK agenda, IF educators must also be able to have mastery of both the turath and modern knowledge. For this to happen requires IF educators to undertake programmes that will expose them to methodological issues that allow them to successfully Islamize/integrate knowledge, an area that is almost non-existent in current formal graduate education. Issue 4: Is There a Future for the IOK Agenda in IF? Figure 2 below shows the breakdown of IF Educators in Malaysia according to academic position and domains. Looking at the figures, it is very clear that about 50% of the IF educators in Malaysia (lecturers and some senior lecturers) do not have Ph.Ds yet. In the Malaysian university system, this means that there are quite a large number of young academics who can still be part of a more effective human resource planning effort. 145 of the IF educators are yet to get their Ph.Ds. Most of them are from the BF domain, although quite a few of them may have shari ah/fiqh backgrounds. About 25% come from the Shariah/fiqh domain. This means that with more effective planning and better collaboration between institutions offering higher degrees in Banking and Finance, Economics etc, there could be a significant change in the quality of IF educators. a. One easy option is to insist that all Ph.D qualifications must involve coursework and if possible, in institutions where some attempt at Islamization/integration is provided. By insisting that everyone one of the 145 young minds take courses in areas that they have gaps, and to also expose them to the IOK agenda formally, the quality and composition of the domains will significantly improve within 5 years. b. A second option that may be needed is to give more focus on hiring new educators that come from domains that are needed in IF programmes. The numbers clearly indicate that those from the shari ah/fiqh domain are over represented. Hiring people from the BF domain is required, but must be supplemented with clear human resource development plans, such as the need to plan for continuous education programmes (CEPs). This could be offered in collaboration with existing leading institutions in Islamic banking and finance and the IOK agenda. c. For existing staff, especially the more senior IF educators, a comprehensive Continuous Education programme framework has to be designed where gaps are filled. In order to ensure that the programmes are attended, some institutional support in the form of incentives (and maybe penalties) can be introduced. One framework that come to mind is the Continuous Professional Development schemes already being introduced for those in the professional categories such as doctors, engineers etc. d. Looking at the strong imperative for there to be greater global collaboration in the area of Islamic economics and finance education, including a framework for CEPs, there is an urgent need to establish an International Federation of Islamic Economics and Finance Educators (I-FIEFE) made up of institutional members from higher learning /research institutions in Islamic economics and finance. In addition to developing CEPs, there is also a need to set-up some standards for Islamic economics and finance education. There is also a need to develop a global database of Islamic economics and finance programmes as well as a global database of IEF educators.

17 Figure 2: Islamic Finance Educators in Malaysia According to academic position and domain (as of July 2014) TITLE Professors Assoc. Prof Asst. Prof / Sen. Lecturer Lecturer Others TOTAL DOMAIN BF SH+ LAW ECON ACCT MGT TOTAL Concluding Remarks This paper has tried to argue that the IOK agenda is an important contributor in developing contemporary Islamic economics and finance. It presented a brief overview of why there is a need for IOK and what IOK represents. In a nutshell, IOK is a process in which critical interaction is made between Islamic heritage and modern knowledge by qualified people who understand both inputs and are able to develop genuine organized bodies of alternative approaches to understanding our economic and finance domains. It is a serious intellectual endeavor that has the capacity to provide indigenous solutions for the ummah. Weaknesses in developing Islamic economics and finance are multi-faceted. One major factor is due to the lack of understanding of what IOK is and what it entails in the process of developing Islamic economics and finance. Central to developing Islamic economics and finance via the IOK agenda is the human resource factor, i.e. the scholars/educators involved in developing the discipline. In this paper, we presented some preliminary findings of the case of Islamic Finance educators in Malaysia. We looked at the numbers of educators, their domains or areas of specialization and discussed some issues relating to the challenges faced in developing Islamic economics and finance via the IOK agenda. We found that institutional support, i.e. institutions that had a clear mission of Islamization/ integration were actually the main contributors to Islamic economics and finance. Hence, the IOK agenda has actually helped to promote Islamic economics and finance. While there were

18 many areas that needed improvement, this was partly to the human resource factor. In our case, we looked at the Islamic Finance educators in Malaysian universities. We found that those who were involved in IF education came from different educational backgrounds, but were dominated by those from shari ah/fiqh backgrounds, in many cases not having exposure to economics, banking, finance etc. On the other hand, many from those in the banking/finance, economics, management/marketing and accounting/governance domains had no exposure to the Islamic heritage. This could help explain why there is also criticism of current practice of Islamic finance and of the development of Islamic economics, i.e. we have a lack of genuine Islamization due to the still prevailing dichotomies in the qualifications of IF educators (and hence graduates). Hence a case was made for an urgent need to develop greater and more collaborative efforts along the lines of IOK so that existing and future educators can fill the gaps in their knowledge. There are already institutions available that can spearhead this effort such as IRTI (who used to coordinate teaching, research and training of educators in Islamic economics in the 1980s and 1990s), the International Association of Islamic Economics (the co-organisers of this conference series for almost three decades now) and the recently established International Council of Islamic Finance Educators (ICIFE) launched in August 2014 by the Right Honourable Deputy Prime Minister of Malaysia and Education Minister. The main role of ICIFE is to develop curriculum and talent in Islamic finance. The paper proposes that these three parties and any other association/institution that has similar goals form an International Federation of Islamic Economics and Finance Educators (I-FIEFE) with the express purpose of developing global standards for Islamic economics and finance education as well as ensuring the quality of the educators. References AbdulHamidAbūSulaymān. (1994). Islamization: Reforming Contemporary Knowledge. International Institute of Islamic Thought, Herndon. Asad Zaman. (2012), Crisis in Islamic Economics- Diagnosis and Prescriptions, JKAU: Islamic Economics,Vol 25 No. 1. Fazlur Rahman. (1988). Islamization of Knowledge: A Response, The American Journal of Islamic Social Sciences (AJISS), 5(1): Ibrahim A Ragab. (1995). On the Nature and Scope of the Islamization Process: Toward Conceptual Clarification, Intellectual Discourse, 3(2): Ismail Raji al Faruqi. (1981). Islamizing the Social Sciences, Islamika, 1: 1-8. Ismail Raji al Faruqi. (1982). Islamization of Knowledge: The Problem, Principle and the Workplan. International Institute of Islamic Thought, Herndon. Jaafar Sheik Idris. (1987). The Islamization of Science: Its Philosophy and Methodology, The American Journal of Islamic Social Sciences (AJISS), 4(2):

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