The Islamic economic policy: some historical accounts on economic policies in the moslem world

Throughout history, Islamic civilization has witnessed several important events in economic progress. One of the problems faced by Islamic leaders in fostering the people was related to improving people's welfare. In the classical period, some Muslim figures became pioneers in economic policies. In a specific way, the paper tries to analyze economic policies promoted by prominent Muslim figures such as 'Umar bin Khattab, Umar bin' Abdul Aziz, Ghazan Khan, and Alauddin Khalji. By using descriptive analysis, this brief article discusses the economic policies applied by some of the mentioned figures through historical analysis. The data were gathered from books and journals. Throughout critical historical analysis, the paper concluded that some Muslim figures succeeded in bringing Muslims into economic advancement along with some of the policies they came up with.


Introduction
When Prophet Muhammad was born as the messenger of God, two greatest empires dominated the world's monopoly of power: the Byzantine (Romans) in the West and Sasanid (Persia) in the East.Both are constantly at loggerheads, resulting in a political, economic, social, and religious downturn.Muhammad was then present amid the condition with the mission of bringing the equality of life, raising human degrees, and humanity, carrying a torch of struggle that brought man to a place of bright, honorable, praiseworthy, and returning to the fitra of human being as a civilized living being in the shade of God.Muhammad brought improvements in all fields, mainly in beliefs, society, politics, and economy (Afandi, 2023).The economic development of the Muslims is furthered by prominent Islamic caliphs and leaders in economic policies such as Umar bin Khattab, Umar bin 'Abdul Aziz, 'Abdur Rahman bin Rustam, Abdur Rahman III, Ghazan Khan, Alaudin Khalji, and the like.It is important to note that Islamic economic policy is not something that comes from the sky but is a "concoction" derived mainly from the Roman and Persian civilizations and various other civilizations that are, of course, vernacularized following the IJISH (International Journal of Islamic Studies and Humanities) E-ISSN 2615-7403 Vol 6, No. 2, pp. 87-99 88 Muhammad Abdul Karim (The Islamic economic policy…) doctrine and teachings of Islam.When the Prophet Muhammad arrived in Medina, he immediately took advantage of commercial opportunities in the Arabian Peninsula and empowered local potential to develop local businesses.It is also narrated that he invited the Christian immigrants to participate in the business.One of the earliest Muslim businesspeople in Medina was Said bin Harithah.Fiscally, along with the rate of dynamics of the people of Madinah under the command of the Prophet with the guidance of revelation, the source of income was increasing and became more organized.In general, the source of state income at that time was divided into primary and secondary sources (Piliyanti, 2018).In Husaini's account, among these primary sources are ghanimah, zakat, jizyah, kharaj, and fai' (Husaini, 1949).
Sources of income are also derived from secondary revenues: (1) Ransom for prisoners of war (only at Badr war, whereas others are not mentioned as captive ransoms); (2) Loans (after the conquest of Makkah) for payment of Muslim liberation; (3) The rikaz is a treasure from the period before Islam; (4) al-Amwal al-Fadilah is the property of the Muslims who died without the heirs; (5) Waqf is a treasure dedicated to Muslims practiced solely for the sake of Allah; (6) The Nawaib is a considerable amount of taxes imposed on a wealthy Muslim to cover state expenses in an emergency.This had happened in the days of the Tabuk War; (7) Zakat Fitrah; (8) Other forms of sadaqah, such as qurban, kaffarat, and the like (Aziz & Nurhasibah, 2020).In the early days of the presence of Islam, the state of society at that time, as described by Hamka when the Islamic army during the Caliph Umar ibn Khattab conquered Persia, witnessed the people of the land themselves who had become bored of being depressed under the kings and heads of the Byzantine and Sasanid, who have been very wrongful to the people.Moreover, it is indeed the custom of the human soul to hate the existing one and longing for the coming, although the next is not necessarily profitable.At that time, the Jews were also in conflict with the Romans.Their possessions have been used up to avenge the Romans.They are also half the great helpers who open the enemy's secret doors to the subsequent mighty conquerors (the Arabs) (Hamka, 1961).
Islamic economic policy has witnessed some historical figures, such as the Rustamid.The financial situation was so bad when the Rustamid government was established in Maghrib.The government was then forced to seek help from the elders of the Ibāḍiyya Kharijites in Basra.
Nevertheless, the Rustamiyah dynasty implemented several economic policies that, in turn, led to success.As a result, they rejected the second voluntary assistance of the Kharijite elders in Basrah, which amounts to six times that of the first aid, feeling that the people were prosperous enough.
Caliph Abdurrahman III (912-961 AD) was the ruler of the wealthiest and most successful economic and prosperous people.At that time, he dared to make the policy of kharaj reduction from 50% to 20%.During the dry season or when agricultural production is inadequate (Imamuddin, 1969), the farmers were released from several agricultural taxes and allowed to pay them whenever possible.Similarly, when Ghazan Khan of Ilkhan seized power, the possessions that were stolen from Baghdad by the Ilkhanid Mongol were exhausted, and nothing was left behind (Spuler, 1972).The public fund was empty and unable to pay the salaries of civil servants and soldiers.But before his death, the country became exceedingly prosperous, and it was challenging to find the poor there.At that time, Tabriz became the capital of the Mongol-Ilkhan dynasty.It turned into a highly developed metropolitan city, and the Mongols, for the first time, became exporters of essential foods.In contrast, before, this nation always experienced deficits and was even the importer of crucial foods.In another place, when Alaudin Khalji ascended the throne in India, the state of the bad economy coupled with a vulnerable security factor.The foreign and domestic merchants didn't dare to go to Delhi because the situation was very unsafe.Sultan 'Alauddin applied one of the famous policies in the Islamic economic field, namely "the price control system," until finally, the country recovered and became prosperous again.In addition to these figures, several leading Islamic leaders made significant contributions in the course of Islamic economic policy (Sulaeman & Ninglasari, 2020).This paper describes some of the Islamic economic policies adopted by some influential figures, including 'Umar bin Khattab, 'Umar bin Abdul Aziz, Ghazan Khan, and Alauddin Khalji, which will be described in more detail until they can remarkably transform the economic situation from a terrible and problematic situation into a prosperous financial condition.

Discussion
The Caliphate of Umar bin Khattab (634-644 AD) One of the most outstanding leaders in Islam, a caliph who can be said to be most successful in expanding the influence of Islam worldwide, is Umar bin Khattab (Umar I).During his rule, the Romans and the Persians (two great empires of the universe at that time) were subordinate to the banner of Islam.Even Egypt and some parts of Africa and Asia have also recognized Islam's greatness, which is still relatively young at that time.Politically and economically, Islamic regions were developing very rapidly.Umar divided the Islamic state into some territories at that time.In every area, he appointed a governor and an amil, who was responsible for the bait al-mal (public treasury) and kharaj (tax for non-Muslims).This is the principle of the political and economic foundations of his government.

Economic Life
The economic activity of the Arabs before Islam was elementary and limited.The population's economic activity, mainly outside the Arabian Peninsula, is farming, shepherding, and raising.
People engaged in agriculture and trade must be kept from farms because the farmers need animals to work on their farms.In addition, traders also use animals to transport merchandise and the commodity.In general, Umar's economic policy can be broken down into three things: the state takes wealth properly and does not take the results of the kharaj or the treasures of the fa'i, except in the right way.The State grants the right to public property, and there is no expense except in accordance with its rights.The state provides subsidies to cover debts and does not accept the assets of the gross proceeds.A ruler treats state assets such as an orphan's property.If the country is well off, it is not entitled to the orphan's property, and if it needs property, it uses these properties correctly (Chamid, 2010).

Fiscal Policy
Umar's fiscal policy generally includes bait al-maal (public treasures), land ownership, zakat, ushr, kharaj, jizyah, and alms (zakat, sadaqah).Nur Chamid explains that in the year 16 CE, Abu Hurairah, an amil in Bahrain, visited Madinah and brought 500,000 dirhams of kharaj, a massive number at that time, so the caliph held a meeting with the Syuro Council, and decided that the treasure would be saved as an emergency fund to finance the army and the ummah as a whole.
In the time of the prophet, kharaj was not very much, but from one conquest to another at the time of Umar, it caused several new problems related to land and conquered areas.What should they do next to the conquered lands?Fighters and clerical leaders wanted the lands distributed to the soldiers, but some refused.Through such a lengthy debate, Umar finally established that the grounds were considered fa'i.Umar sets the zakat for trading horses, rubber, and marine products.The proceeds are distributed to people experiencing poverty.He also applied ushr to the owner of the honey resulting from honeycombs, either from fields or forests of the mountains.
While trading in general, the application of ushur was 2,5% for the Muslims, 5% for dhimmi, and 10% for harbi (Husaini, 1949).The various combinations of economic policy, coupled with a firm and firm stance in upholding honesty and truth, caused the financial situation under the Umar caliphate very prosperous.The population lives in security, comfort, justice, and prosperity.The politi-economic-social-religious state of Umar was highly developed and remembered all the time as one of the best Caliphate eras on earth.

Caliph Umar bin 'Abdul Aziz (717-720 AD)
Umar bin Abdul Aziz bin Marwan (Umar II) was a caliph who had a pious personality; he was nicknamed Abu Hafs.Several Islamic scholars believe he is the fifth of al-Khulafa al-Rashidun.
Sufyan ats-Tsauri said, "The Caliphs are five: Abu Bakr, Umar, Utsman, Ali, and Umar bin Abdul Aziz."Umar II was appointed in Safar 99 CE as Umayyad Caliph based on the will of Caliph Sulayman ibn Abdul Malik.For two years and five months, he ruled with full justice and returned all the treasures and rights of the people taken previously unjustly.When his name was crowned as caliph and Sulaiman's successor, he drooped: "By Allah, I never asked God to be a Caliph" (As-Suyuthi, 2010).He previously objected to taking office as a caliph, but people continued to urge him to accept the position, so he finally accepted that.Unlike the case with humans in general, who are very happy when given such a high position, he just said inna lillahi wa inna ilaihi raji'un (Karim, 2006).After becoming Caliph, Umar II decided to give all his wealth to the state treasury, including the wealth owned by his wife named, Fatimah bint Abdul Malik which was a gift from his father in the form of a gold necklace with a value of 10,000 gold dinars.Before ascending the throne, his life was initially very luxurious.He was often late for prayer because his maid had yet to comb his hair, and he also only wanted to wear a shirt once.The situation is inversely proportionate after he became a caliph.Once, when Umar was late to arrive at the mosque for Friday prayers, it was because his only cloak was still wet.The clothing has a fill of 100 pieces.When Umar II took office, the condition of state administration and finance suffered a severe problem caused by the existence of the Arab rules on mawali and dhimmi, which was the principal policy of the Umayyad government in the form of tax policy, kharaj, jizya, and other unsuitable taxes.To overcome this problem, he made many changes to the government's performance and the enactment of policies concerning the people's goods.Karim stated that some changes in policies made by Umar II during his reign can be described as follows (Karim, 2006): a) Slowly eroding feudalism that occurred among the Umayyad families.b) In the appointment of the regional heads, Umar II asked for his people's opinion, not necessarily appointing the governor by his decision but also involving his people.c) Unlike the previous caliph, who was inclined to enrich themselves, Umar II always tried to avoid the things religion forbade by doing a simple lifestyle, zuhud, and wara.Almost all of his wealth was donated to the bait al-mal for the benefit of the people.Before becoming a caliph, he owned estate lands in Hijaz, Sham, Egypt, and Bahrain.The land could produce about 40,000 dinars a year, but at the time of his death, he had only 17 dinars, which were then used for the shroud (5 dinars), 2 dinars for his burial ground, while the remaining 10 dinars were distributed to his eleven children.d) Umar II issued a decree instructing the wealth generated from the suffering and torture of the people to be returned to the country.e) Beforehand, jizyah and kharaj were picked up from Mawali.Umar II then abolished it by freeing the tax because the prophet was sent not to levy the taxes and seek wealth from these people but only to Islamize them.The previously implemented expansion, including inhumane taxes, is also discontinued.
f) The fact that Arabs buy rice fields from dhimmi was causing a side effect; farmers left their fields and went to the towns.Many people embraced Islam to avoid kharaj, which resulted from severe economic pressure in the country.Umar II issued a new decree whose contents began in 100 CE. (719 AD), prohibiting the practice of buying and selling the land so that if a non-Muslim converts to Islam and he must leave his rice field, then the rice field is cultivated by his non-Muslim neighbors, he will be given a monthly pension from the state or allowed to work on his rice fields with the obligation to pay kharja tax.
g) The new decree also stated that kharaj land should not be converted into ushri land.If a Muslim buys land without government permission, the transaction is deemed void, and the land ownership is lost.If a Muslim wants to work on a rice field from the bait al-mal, he must pay the kharaj tax.

The Economic Achievements of Ghazan Khan (1295-1304 AD)
Six hundred years after the Caliph Umar II era, a Mongol-Muslim leader emerged as a new exponent of historical achievement in Islamic civilization, whose policies could change the state's condition better than ever.One of these figures was Ghazan Khan, the fifth generation of Chengis Khan, the famous ruler of the Ilkhanid Dynasty founded by Hulagu Khan in 1256 AD in Persia.
Unlike his non-Muslim predecessors (except Tagudar), he made Islam the state's official religion.
By the time Ghazan Khan ascended the throne (1295-1204 AD), the country was in a bad condition.
The land was filled with corrupt, arbitrary, and fraudulent officials to enrich themselves.Another problem is the excessive tax rates imposed on farmers.When the country is underfunded, taxes levied on the people increase, making farmers suffer more and more and unable to meet their daily needs.This situation led to the paralysis of the economic wheels in Persia.In such a situation, Ghazan Khan made several improvements in economic policy, namely agricultural, fiscal, and monetary policies.Through the combination of Ghazan Khan's economic policy, the Ilkhan Dynasty achieved remarkable progress.

Agricultural Policy
Agriculture, which became the main occupation of the Persian population at that time, is one of the primary sources of state income.Once dominated by the Mongols, emphasis was placed on the military aspect to create stability and security.This causes the agricultural field to decline.
Political forces The Mongols were developed by providing vast grasslands in the tribal units that formed their military supporters (Karim, 2006).Ghazan Khan addressed high taxes by improving agriculture, reducing taxes on agricultural products, and providing support, encouraging people to return to farming.He also enhanced the irrigation system.Another policy in agriculture is to revive dead land.The death ground is divided into three; (1) Land with water supply only requires a few workers.In the first year, the land is not taxable; in the second year, 1/3 diwan tax must be paid, and in the third year, ¾ diwan tax must be paid; (2) Land that requires water and workers in small quantities.Nothing is spent in the first year.In the second year, the diwan tax is paid 1/3; in the third year, it is paid 2/3; (3) Land that needs repair in its underground water tunnel.Nothing is delivered in the first year; in the second year, 1/3 of the diwan tax will be paid, and in the third year, it will be paid 1/2.However, the dead soil must be registered and renewed annually by Diwan-e Khalsha to supervise the land.

Fiscal Policy
Ghazan Khan prohibits tax collection by the governors, who often commit fraud.He chose the rich people to become tax collectors.According to him, the rich man was quite satisfied with what they already had, so they would not commit corruption.Ghazan also prohibits the malik (young prince) and basqaq (tax collector) from recording public assets.He sent several bitikchi (state secretaries) to each province to register the community's property.The bitikchi must submit their results to Diwan.Ghazan also designates the bitikchi from each region to write a draft in the central government at the beginning of the year according to the population data collection.
Furthermore, Ghazan appointed Sahib-e-Jam (tax collector) in every province.In each city, he set up a post as a place to pay taxes from the date of stipulation of payment of tax until maturity.Tax payments are made in 2 installments, with a 10.5% surcharge and a state cash contribution.If they are late paying taxes, they are charged a fine of 1% of the total tax (Karim, 2012).

Resident Tax
Taxes levied on the population generally consist of several kinds.First, a family tax for Muslims is called zakat.Second, the family tax for non-Muslims, called jizya, is a guarantee of self-security.
According to Jews and Christians, it is inhumane because they are not Muslims but must bear the taxes imposed on them every year (Lambton, 1988).

Land Tax
During the Ilkhan Dynasty, the land tax came from farmland, and Ghazan established a threeyear agricultural contract.Agricultural income tax payments are charged to residents, traders, landowners, bureaucratic members, and emirs.The payment system can be done in two installments: summer (garmsir) and winter (nardsir).In the time of Ghazan, the Ilkhan Dynasty was the only dynasty in the history of the Mongols who could export rice to foreign countries (Lambton, 1988).

Animal Taxes
Taxes originating from livestock are called qubchur.These taxes burden the citizens of Persia.
Before Ghazan came to power, qubchur was often billed more than once a year.After Ghazan came to power, the qubchur tax was regularly withdrawn in two installments in spring and autumn.This tax is imposed on local and nomadic people.The local tax system is twice the installment in spring and autumn, and the tax must be paid within twenty days, while the mobile population is one installment in the spring, and the tax is also paid within twenty days (Lambton, 1988).

Customs Tax on Goods and Services
The state imposes taxes on goods and services upon its people, withdrawn from city activities, such as trade, stores, and public baths (Alam et al., 2021).In the Islamic Mongol era, the custom tax was called tamgha, a gift of payment in cash for a person's services (Karim, 2012).

Monetary Policy
By the time Ghazan Khan took office, the state treasury was empty.Hulagu Khan had gathered the treasure from the conquest of Baghdad, the Assassins, Syrians, and others stolen by the guards.This happened because the Mongols did not have a well-organized state treasury board, so their employees quickly picked up and used many treasures (gold, jewelry, etc.) arbitrarily (Spuler, 1972).Seeing the problem, Ghazan built tents for the heavily guarded state money storage, and he also created "Guard Books," a particular book on the recording of state money.Ghazan also sorts through the treasures he has received from other provinces (Karim, 2012).

Distribution of State Finances a) State Revenue
At the time of Hulagu Khan, the most critical source of state income came from the conquests (ghanimah).However, when Ghazan ascended the throne, the country's primary income came from agricultural taxes.Apart from agricultural taxes, the payment of the Ilkhan Dynasty during Ghazan Khan also came from animal tax (qubchur) livestock and customs tax on goods and services (tamgha), zakat, jizya, state land, iqta, and waqf (Lambton, 1988).

b) State Expenditures
The state budget of the Ilkhan Dynasty at the time of Ghazan Khan was partly absorbed by the need for infrastructure development.He built trade centers such as Tabriz, which became the capital and a trade center between East and West.Subsequent state expenditures are for physical development (Nelson, 2013).Ghazan built a musolium, housing, bridges, fountains, monasteries or khanqah (Sufi huts), colleges for Hanafi and Shafii schools, accommodation for the sayyids, hospitals, and other public buildings (Wahyudi et al., 2020).

The Leadership of Sultan Alauddin Khalji (1296-1316 AD)
At the beginning of the reign of Sultan Alauddin Khalji, the country was in a chaotic state with social, political, and economic issues.The working pattern of the operational administration could have been more effective, and the government he was supposed to lead was full of rebellions (Kallio & Kouva, 2015).The brutal attacks of the Mongols and the state coffers were vacant.People suffer from starvation because of scarce and expensive commodities, officials, including jagirdars or governors, are disloyal and disobedient, state employees work inefficiently and tend to corruption, and the central government has no power and influence (Chapman, 2018).How did the leadership of Sultan Alauddin Khalji overcome all the turmoil?What policies are applied, and what are the implications of policies implemented by Sultan Alauddin Khalji?

Price Control System
After completing the post-defense problems at the country's border to withstand the Mongol attack, Sultan Alauddin thought to improve the welfare of his troops.After consultation with the ministers, it was found that the necessities of life would not be cheap if the price of essential commodities (wheat and all grains consumed by the people) were not set in the cost of a rule and tariff (Elliot, 2021).K. Ali noted several reasons for Sultan Alauddin taking the price control policy in his economic policy.It was previously motivated by his ambition to widen the region of power and face the Mongol attack by creating and maintaining a large and powerful army.To carry out the revamping of its policies into and out through administrative reform requires substantial funds, including for the salaries of employees (Berger, 2006).Although he previously had conquered Deogir, with the price fixing policy (part of the price control policy), the current price became invalid.The Mongol Attack that severed the trade route from and into its territory made the goods scarce and prices rise.The entry of money from the Deccan, who conquered the region of Alauddin Khalji, also caused the fall of the currency's value and ultimately raised the price of essential goods.The main reason for this price-control policy is to overcome the hunger of the people because the food supply is very scarce, and the prices soared due to the actions of the 'naughty traders' who do the stockpiling in addition to the factor of the breaking trade path (Chapman, 2018).In detail, the policies in controlling prices taken by Sultan Alauddin Khalji are as follows: a) Determine the price of necessities such as wheat, barley, Dhan (grain), ghur (sugar from palm trees), butter, salt, brown sugar, sesamum oil, etc., and other urgent needs, at meager prices, including for the price of all the goods used for the necessities of life (eg vegetables, fruits, caps, shoes, weapons, needles, the best horses, dairy cows, dairy buffalo, etc.) (Karim, 2003).b) Appoint Malik Kabul Ulugh Khan, a wise practitioner, to monitor the market.Ulugh Khan performs his duties assisted by intelligence that provides information on every trader's practices (Elliot, 2021).c) Build a wheat barn to accommodate necessities, especially wheat (Garner, 2015).Sultan Alauddin tried to eliminate the scarcity of goods and control the increase in the price of grain (staple food).d) Elliot found transporters stationed throughout their domains under market control orders (Elliot, 2021), namely Diwan-e-Riyasat and Shahana-e-Mandi.Their job is to transport wheat from one country's county to another, collectively or to a market called Sara-e-Adl (Chapman, 2018).Their names were written in a book called Daftar and placed in warehouses on the banks of the Jamuna.If they are negligent, they will also be punished collectively (Niazi, 1992).
Various actions by traders, such as hoarding wheat, are forbidden, and the perpetrators will IJISH(International Journal of Islamic Studies and Humanities) 90Muhammad AbdulKarim (The Islamic economic policy…) IJISH(International Journal of Islamic Studies and Humanities) Muhammad Abdul Karim (The Islamic economic policy…) 91