THE ADVANTAGES OF ECONOMY SYARIAH

DESIGNED TO MEET THE GROUP ASSIGNMENTS

COURSES : ENGLISH 1 (GENERALE)

LECTURER : MILASARI OKTAPIANTI, M.Pd

AUTHOR : FANNY FADILAH RAHAYU (19461079)

FITRI (19461026)

HERDIANSYAH WAHYU SAPUTRA (19461028)

SEKOLAH TINGGI ILMU EKONOMI SYARIAH

INDONESIA PURWAKARTA

PURWAKARTA

2019
 Preface
Praise and gratitude let us pray to the presence of Allah SWT who has given his
grace and guidance so that our group can complete the assignment of this paper
entitled "THE ADVANTAGES of ECONOMY SYARIAH" on time.

The purpose of accepting this paper is to fulfill the assignment given by Mrs.
Milasari Oktapianti, M.Pd in an English course in the Sharia Economics study
program. and to add insight into the advantages of economy syariah for us as
writers as well as readers.

We would like to thank Milasari Oktapianti, M.Pd as a lecturer in English

courses in the Sharia Economics study program for providing this assignment so
that we can get useful new insights.

We would also like to thank all those who helped us in completing the
preparation of this paper.

We apologize if there are still errors in this paper because we are still in the
process of learning. We hope the criticism and suggestions from the readers so that
we can be better in the preparation of further papers.

Purwakarta, 2019 september 26

Author : 1. Fanny fadilah rahayu

2. Fitri

3. Herdiansyah wahyu saputra

 TABLE OF CONTENTS
Preface.........................................................................................................................

Table of contents.........................................................................................................

CHAPTER 1 : Introduction

A. Background
B. Formulation of the problem
C. Purpose

CHAPTER 2 : Discussion

A. Definition of economy syariah

B. History of economy syariah
C. Basic Principles islamic economic system
D. Characteristic of economic syariah
E. What is an Islamic bank?
F. The difference between Islamic banks and conventional banks

CHAPTER 3 : Closing

A. Conclusion
B. References

http://afifulikhwan.blogspot.com/2011/12/makalah-ekonomi-syariah.html\

https://www.kompasiana.com/qomatul/58b17ef8e9afbd891a4e57fa/ekonomi-
syariah-sistem-dan-sejarah-perkembangannya?page=all
CHAPTER 1 : INTRODUCTION
1.Background
Islamic Economics is a branch of science that seeks to view, analyze, and
finally solve economic problems in Islamic ways, that is based on the
teachings of Islam, namely the Qur'an and the Sunnah of the Prophet.
Sharia economics has two main things that become the legal basis of the
sharia economic system, namely the Qur'an and the Sunnah of the Prophet,
the laws taken from the two basic foundations in concept and principle are
fixed (cannot be changed at any time and anywhere).

2. Formulation of the problem

As has been explained in the background, then we take the formulation of
the problem as follows:
a. How is the Islamic economy
b. How is the capitalist economic system
c. Comparison between Islamic and capitalist economics

3.purpose
The purpose of writing a paper entitled "Sharia Economics" is as follows:
1. Knowing what is the meaning of economics and education
2. Knowing the history of the Islamic economic system
3. Knowing the basic principles of Islamic economics
4. Knowing the characteristics of Islamic economics
5. Giving new knowledge about banks sharia and why it must be a sharia
bank
6. Give knowledge to the wider community about sharia economics
CHAPTER 2 : DISCUSSION
A. Definition of economy syariah
Islamic Economics is a branch of science that seeks to view, analyze, and
finally solve economic problems in Islamic ways, that is based on the teachings
of Islam, namely the Qur'an and the Sunnah of the Prophet
Sharia economics has two main things that become the legal basis of the sharia
economic system, namely the Qur'an and the Sunnah of the Prophet, the laws
taken from the two basic foundations in concept and principle are fixed (cannot
be changed at any time and anywhere).
Here are some definitions of Islamic Economics from several book sources:
According to Monzer Kahf in his book The Islamic Economy explains that
Islamic economics is an interdisciplinary part of economics in the sense that
the study of sharia economics cannot stand alone, but it requires good and deep
mastery of the sharia sciences and their supporting sciences as well as the
sciences knowledge that functions as a tool of analysis such as mathematics,
statistics, logic and usul fiqh (Rianto and Amalia, 2010: 7).
M.A. Mannan defines Islamic economics as a social science that studies
people's economic problems that are inspired by Islamic values (Mannan, 1992:
15).
The definition of Islamic economics is based on the opinion of Muhammad
Abdullah Al-Arabi (1980: 11), Islamic Economics is a set of general economic
fundamentals that we conclude from the Qur'an and Sunnah, and is an
economic building that we established on the foundation of the basis is in
accordance with each environment and period.

B. History of economy syariah

Islamic economic thought has long existed in this world, namely during
the existence of the religion of Islam itself starting from the time of the
prophet Muhammad SAW sent to bring the teachings of Islam to earth until
now. This is proven that in the time of the Prophet there was also a market.
In the time of the Prophet Muhammad, the economy was still relatively
simple, but he demonstrated the basic principles for economic management.
The general character of the economy at that time was its high commitment
to ethics and norms, as well as its great concern for justice and equitable
 distribution of wealth. Economic efforts must be carried out ethically within
the framework of Islamic sharia, while economic resources must not
accumulate in a handful of people but must be circulated for the welfare of
the Ummah.
At the time of the Prophet Muhammad SAW relatively prominent market
economy where to keep the market mechanism within the framework of
Islamic ethics and morality, the Prophet established Al-Hisab which is an
institution whose job is to oversee the market. After the time of the
Messenger of Allah, Islamic economics in its development never had
thinkers who were very important in the field of Islamic economics where
among these figures were also friends of the prophet Muhammad SAW
called Khulafaurrasyidin who were very well known in their respective
times, among them Abu Bakar As- SidiqUmar bin Khattab Ustman Bin
Affan and was the last Ali bin Abi Talib.

C. Basic Principles islamic economic system

The basis of Islamic Economics is Islamic values. Islamic values are
sourced from the Qur'an, Sunnah, and the behavior of the family and friends
of the Prophet Muhammad. The goal is to achieve "Fallah" which is to
achieve prosperity for the people. The basic principles of Islamic economics
according to Umer Chapra are:
1. Principle of Monotheism.
Monotheism is the foundation of the Islamic faith. This means that
everything in the universe was designed and created intentionally by Allah
SWT, not by accident, and everything must have a purpose. It is this purpose
which gives significance and meaning to the existence of the universe,
including human beings who are one of the occupants in it.
2. The principle of khilafah.
Humans are the caliph of Allah SWT on earth. He is equipped with both
physical and spiritual devices to be able to play an effective role as His
Khalifah. The implications of this principle are: (1) universal brotherhood,
(2)resources are mandate, (3), simple lifestyle, (4) human freedom.
 3. The principle of justice.
Justice is one of the main missions of Islamic teachings. The implications of
this principle are: (1) fulfillment of basic human needs, (2) halal and tayyib
sources of income, 3) equitable distribution of income and wealth, (4)
growth and stability.

D. Characteristic of economic syariah

Characteristics of Islamic economics are as follows:
1. Rabbani Economy
Rabbani economy is taken from the word rabb which means God. These
characteristics include the source of Islamic economic foundation derived from
God and also the role of God can not be separated from market conditions, and
the purpose of this system is to get the pleasure of God.
The basis of Islamic economic law originating from the god in question is
from the word of God which was collected in the Koran manuscripts that were
taught to humans through the Prophet Muhammad. This is different and even
contrary to conventional economic systems which are based on the ratio of
human logic that is limited and not universal.
Then the purpose of this system is falah or the success of the world and the
hereafter which expects the approval of the almighty God.

2. Sharia economics is related to the creed, sharia, and morality

Islamic economics is a unity of the teachings of Islam so that the economic
system can not be separated from the creed, sharia, and morality. So that the
three elements become the foundation of the Islamic economic system.
This has been adopted by a number of Islamic financial institutions such as
BMT (Baitulmal wa Tamwil or Islamic cooperatives) which give up
receivables that really cannot be paid off by debtors who have limited abilities
that actually need help. So that debtors like this will be the object of alms and
given guidance to be independent.
It is not uncommon for debtors who have been given guidance and
empowerment to return as creditors who make use of their excess assets to the
BMT and then play in the interest of the people.

3. Human economics (Humanist economics) or khilafah

Islamic economy is one of the characteristics of Sharia Economics. In the
economic system with naturalist understanding, one will focus on the natural
resources. So consider the most important thing in the economic system is the
ownership of abundant natural resources.
4. Economic scrutiny (moderate or balanced)
Balance or the ideal value is a priority in the Islamic economy, there is no
known favor to the capitalists or workers, all have rights and obligations in a
fair share.
The purpose of Islamic economics is to reach the success of life in the world
and in the hereafter gives birth to understand where the balance or balance
becomes important to note. Islam requires a balance in the pursuit of the world
and the hereafter, Islam does not allow someone to pursue the world alone
without fulfilling the obligations of his property, and vice versa, Islam does not
allow someone to let poverty and encourage someone to be independent in the
economy.

5. Economic cooperation and justice

Islam encourages a person to be in association or to work together so that the
goal of prosperity can be achieved more likely. There are a number of
muamalah agreements that deliberately regulate this cooperation where the
Sharia law guarantees that there are no injured parties.

6. Double vision economy

In conventional economic activities the course of the economy is overseen by
regulations and the state apparatus, as well as the Islamic economy. However,
man cannot escape from Divine supervision so that if someone can escape from
the snares of the law in the world but he will not be able to escape punishment
in the hereafter. These values make Islamic economics a double-minded
economic system.

7. Economic results of a combination of patent and changeable laws

The basic law of Islamic economics comes from the word of God and this
cannot be changed, but along with the development of many types of
transactions that were not found in the time of Rasullullah so that there is
ijtihad or the thought of the scholars to answer the world's questions so that
they can continue to dynamically follow the era , but still refers to the Qur'an
and Al-Hadith.
E. What is an Islamic bank?
The meaning of a Shari'ah Bank is a commercial Bank that conducts business
activities based on sharia principles which in its activities provide services in
payment traffic. (Periodic Legal and Justice Bulletin, p.64) and BSM (Bank
Syari'ah Mandiri) apply principles of justice, partnership, transparency and
universal.

F. The difference between Islamic banks and conventional banks

Following are the differences between Islamic Banks and Conventional Banks:
1. Legal Differences Used
At a Sharia Bank, all contracts or transactions must be in accordance with
Islamic sharia principles, based on the Koran and Hadith that have been
claimed by the Indonesian Ulema Council (MUI). Laws that apply to Islamic
banks include;
• Akad al-mudharabah (profit sharing)
• Al-musyarakah (partnership)
• Al-musaqat (farmer cooperation)
• Al-ba’i (revenue share)
• Al-ijarah (leasing)
• Al-wakalah (agency).
Whereas at Conventional Banks, all transactions and agreements are made on
the basis of positive laws that apply in Indonesia. The law used is Civil Law
and Criminal Law.

2. Differences from the Investment Side

The difference between Sharia Banks and Conventional Banks from the legal
side will further produce differences in the system used, one of which is in
terms of investment.
At a Sharia Bank, a person can borrow business funds from the Bank if the
type of business they run is halal from an Islamic perspective. Some of these
businesses include, trade, animal husbandry, agriculture, and so forth.
Whereas at a Conventional Bank, a person is permitted to borrow funds from a
bank for the type of business permitted by positive law in force in Indonesia.
Businesses that are considered not halal but if recognized as positive law in
Indonesia can still borrow funds from Conventional Banks.
3. Difference in Orientation
As mentioned in the table above, Islamic banks are oriented to profit,
prosperity, and happiness in the afterlife. Whereas Conventional Banks are
more inclined to prioritize getting profit or profit oriented.

4. Difference in Profit Sharing

Furthermore, the difference between Sharia Banks and Commercial Banks is in
the profit sharing system.
Sharia Bank applies a profit sharing system in accordance with the agreement
that was agreed from the beginning by both parties. Of course, the Sharia Bank
annulled the possibility of profit and loss from the business to be provided
financing. If the business is deemed unprofitable then the Sharia Bank will
refuse the customer's loan application.
At the conventional bank, a fixed interest or floating interest system is applied
to all loans to customers. In other words, the Conventional Bank considers that
the business that will be given a loan of funds will always be profitable.

5. Customer Relationship with the Bank

The next thing that is the difference between Sharia Banks and Conventional
Banks is seen from the side of the bank's relationship with its customers.
Islamic banks treat their customers like partners with transparent agreements.
That is the reason why many Bank Syariah customers claim to have an
emotional relationship with the bank providing financing facilities.
Unlike the case with Conventional Banks that treat their relationships with
customers as creditors and debtors. If the credit payments by the debtor are
current, the bank will provide current information. However, if the loan
repayment is bad, the bank will collect, and can even lead to the confiscation of
the assets that are pledged.
During its development, the Conventional Bank has also endeavored to build
emotional relationships with their customers.

6. Differences from the Supervision Side

At Sharia Bank, all transactions are under the supervision of the Supervisory
Board which includes some Ulama and Economists who understand muamalah
fiqh.
Whereas in Conventional Banks there is no Board of Trustees. However, every
transaction made at a Conventional Bank must be based on positive laws in
force in Indonesia.

7. Differences in Installments and Promotions

The last thing that is the difference between Islamic Banks and Conventional
Banks is in terms of installments and promotions.
Sharia Bank applies a fixed-installment payment system based on bank profits
that have been agreed by both parties. In addition, the contents of the
promotion of Islamic Banks must be delivered clearly and transparently. For
example travel promos from Islamic Banks for customers using Islamic credit
cards. In the promotion explained about the costs that must and should not be
paid by credit card customers.
In contrast to Conventional Banks that have many promotional programs
whose purpose is to lure their customers. For example the promotion of a fixed
interest rate or fixed rate for a certain period, until finally applying a
fluctuating interest rate or floating rate to customers
CHAPTER 3 : CLOSING
A. Conclusion

Based on the above data it can be concluded that the comparison of Shari'ah
economics and capitalist economics is very clear the differences and almost
understandings of the two Shari'ah and capitalist economic streams are very
different, namely:

1. Shari'ah economics recognizes private ownership within certain limits, whereas

the capitalist places the individual's personal interests above all things

2. The spirit of freedom in the capitalist economy includes almost everything in the
Shari'ah economy that freedom has its limits when it harms the interests of others

3. Outside him is a dangerous competitor and must be defeated strategically

however according to its form in capitalist economics in Islam the main driving
force of Islamic economics is cooperation.

References
http://afifulikhwan.blogspot.com/2011/12/makalah-ekonomi-syariah.html\

https://www.kompasiana.com/qomatul/58b17ef8e9afbd891a4e57fa/ekonomi-syariah-sistem-dan-
sejarah-perkembangannya?page=all

https://www.maxmanroe.com/perbedaan-bank-syariah-dan-bank-konvensional.html

https://medium.com/@indotesis/pengertian-tujuan-prinsip-dan-manfaat-ekonomi-syariah-
d7412ace57a2

https://onlineservices.id/pengertian-ekonomi-konvensional-menurut-artikel-ekonomi-
konvensional-dan-ekonomi-islam/amp/

https://qazwa.id/blog/perbedaan-sistem-ekonomi-islam-dan-ekonomi-konvensional/

https://www.kompasiana.com/amp/indahwiinarsih/5c7e44d4ab12ae54614cf772/prinsip-dan-
titik-perbedaan-mengenai-ekonomi-syariah-dengan-ekonomi-konvensional