It would have helped a great deal if the Federal Shariat Court (FSC) had also presented the case studies it had based its verdict about an interest-free economy on, as it was required to, because simply demanding an outright shift to no interest in all matters, including domestic and foreign loans owed by the sovereign, amounts to putting the cart before the horse even if you accept that such a thing can be possible in the first place.
There are, after all, many, many Muslim countries that continue to look very seriously into what really comprises exploitative usury while accepting that simple interest does not fall within its domain.
That’s because despite the research that has gone into this subject, there is still no consensus on whether charging simple interest on regular loans amounts to unacceptable riba that the Quran clearly forbids.
It is, therefore, still an ongoing debate partly because the world of international finance has undergone numerous rounds of frantic evolution over the last few decades and its many new complexities, and their contradictions with the Islamic system, are still being worked out.
Plus, this decision requires a complete shift to an interest-free economy by 2027, and the way things are going the country would be lucky not to find itself tumbling into default just around that time.
It’s also open to debate whether such a drastic transformation would be possible in this time at all.
Banks are sure to appeal this decision and just as likely is the government itself. So far the finance ministry is treading very cautiously.
No doubt, it doesn’t want to step on a land mine and ignite the extreme right for no reason at all. Yet it needs to make it very clear that such a path would require extensive debate and deliberation first.
There’s no doubt that religious injunctions must be followed. But it’s equally important to make sure that they are interpreted correctly in the letter as well as spirit. We must not allow any kind of exploitation, whether it is erring on the side of conservatism or liberalism. *