This article has been reproduced from Prophetic Economics Regarding the Current Economic Situation in Pakistan, it is vital to appreciate that the Global Economy is going through a challenging time; this is not specific to Pakistan. However, Pakistan indeed has systemic issues with its Economy, and that is linked to the inherited Colonial Capitalist Economic System that it follows. The GDP in Pakistan is 347.75 Billion USD; however, Countries with similar populations like Brazil and Indonesia have done significantly better in terms of Economic Development compared to Pakistan. In Pakistan’s case, the problem of interest-based debt traps that Pakistan is stuck in and combined with inefficient Economic policies have led to an Economic Failure. The root for all these problems lies in reliance on Capitalist Economic Policies instead of the Islamic Economic Policies based on Divine Guidance – Quran and Sunnah. A Radical shift in the Economic Policies with a key reset of the system can help free Pakistan from the clutches of the global loan sharks and their interest-based debts and help it develop its …

The Federal Shariat Court (FSC) of Pakistan announced on April 28th 2022 that the current interest-based banking system is against sharia, and directed the government to implement an interest (riba)-free banking system by December 2027.[1] In fact, the first petition for the abolition of the interest-based banking system was filed in the FSC on June 30, 1990 and it has taken 32 years for a final verdict to be issued![2] It is well-established in Islam that riba is against sharia because of the numerous clear-cut verses of the Holy Quran such as, “O believers! Fear Allah, and give up outstanding interest if you are ˹true˺ believers. If you do not, then beware of a war with Allah and His Messenger!”[3] and “But Allah has permitted trading and forbidden interest.”[4] While most Muslims support a ban on riba, very few understand the alternatives to the existing economic system of banking and monetary transactions. The alternatives that emerge focus on offering interest-free loans through complex financial products, where the recipient still pays more than the capital. Those …