DON’T BLAME RELIGION FOR POOR ECONOMIC PERFORMANCE
SOME people believe that a religious country would not be able to enjoy economic prosperity. In other words, as a nation grows more religious, it may have lower economic growth, whereas a more secular country that has civil liberties and political rights may have better economic growth.
Traditional values emphasise the importance of religion, respect for authority and family values. African and South Asian countries, such as Zimbabwe, Morocco, Bangladesh and Malaysia, are considered to have high traditional values.
Secular-rational values are the opposite. Ex-communist countries (Russia, Bulgaria and Ukraine), European (Germany, France and Switzerland) and English-speaking countries (Britain, Canada and Australia) are those with high secular-rational values.
There are few notable observations on the relationship between religion and economic wealth.
First, studies show that people in richer countries tend to be less religious than those in poorer countries. For example, Canada, Australia and Germany are among the wealthiest countries in the world. In fact, it has been suggested that there is no example where a country is religious and highly successful socially at the same time.
Second, statistics indicate that religious beliefs and practices have been in decline in most developed countries, but remain important in developing countries. Countries that are more secular have better gross domestic product, higher productivity and are more innovative.
Should religion be blamed for poor economic indicators? Can religion really flourish in a prosperous society?
In the Islamic context, analyses of economic performance and religious beliefs found that Islam promotes economic growth. There are many passages in the Quran highlighting the importance of commercial and economic activity. In Islam, every man is required to seek material wealth as an act of worship: “But seek, with that (wealth) which Allah has bestowed on you, the home of the Hereafter, and forget not your portion of lawful enjoyment in this world, and do good as Allah has been good to you, and seek not mischief in the land.” (Quran 28:77)
Worship is a broad concept in Islam and recognises that mankind can be rewarded for performing both ritual acts and worldly activities. It has been suggested that the balance of responsibilities towards humanity, society and environment in Islam is, in fact, completely compatible with the United Nations Global Compact principles and may represent an ideal framework for socially responsible behaviour.
Thus it is inaccurate to denounce religion for poor economic performance in the Islamic view. Rather, what needs to be rectified is the proper context for economic prosperity. In Islam, economic wealth is defined on the basis of group solidarity, not solely as an individual pursuit. Hence, Islam emphasises sharing zakat, waqf sadaqah.
We need to understand that there are other problems that can hinder economic progress, such as religious myths, false ideologies, bad governance, corruption and so forth. Therefore, religion does not affect economic wealth directly. At the same time, economic wellbeing comes with other factors, such as job skills, educational attainment and female participation.
From a methodology point of view, there is no clear evidence whether religion affects economic behaviour or the other way around.
However, Muslims are encouraged to do business. Prophet Muhammad was involved in trading activities. Islamic laws have laid out the permissible (halal) and forbidden (haram) economic activities for Muslims.
Fellow, Centre for Economic and Social Studies, Institut Kefahaman Islam Malaysia