DefinePK

Abstract

This study critically examines the contemporary relevance of the Islamic economic system in Pakistan, highlighting its foundational principles, historical development and potential role in addressing current socio-economic challenges. The Islamic economic framework is rooted in justice, equity and the prohibition of interest (ribā), while emphasizing zakāt, ṣadaqāt and ethical trade as essential mechanisms for wealth distribution and social welfare. In Pakistan, the idea of structuring the economy on Islamic lines has been embedded in the Objectives Resolution (1949) and further reinforced in the 1973 Constitution, which obligates the state to eliminate interest and promote socio-economic justice. Despite significant reforms during different political regimes, particularly in the 1980s, the practical implementation of a fully Shariah-compliant economy remains incomplete, with interest-based structures still dominating financial institutions. The paper argues that in the modern era, the Islamic economic system offers viable alternatives to the exploitative practices of conventional economies, especially in addressing poverty, wealth concentration and systemic instability. The rise of Islamic banking, takāful and sukūk instruments demonstrates both the adaptability and growing acceptance of Islamic finance in Pakistan and beyond. Moreover, global financial crises have amplified the demand for ethical and sustainable economic models, thereby strengthening the contemporary significance of Islamic principles. This research concludes that for Pakistan to achieve economic justice and stability, a collaborative effort between policymakers, economists, religious scholars and civil society is essential. The Islamic economic system is not merely a religious ideal but a pragmatic framework with profound modern applicability.