Constitution of the Caliphate State / Economic System
- Category: Economic System §123-169
Article 165: Development and investment by foreign funds within the State are forbidden. It is also prohibited to grant franchises to foreigners.
The two words: “investment”and: “development” are Western terms. The term investment means that the money itself produces profit, which is by yielding interest. As for the term development, it means to use the money in industry, agriculture or trade, in order to produce profit.
Based upon this understanding, all investment is not allowed, since it is interest and interest is forbidden (Haram). Although the text regarding foreign investment is explained by the rule that it is prohibited to engage in interest with a Harbi, in the same way as a Dhimmiand a Muslim without any difference between them due to the generality of His (swt) words:
“And has forbidden interest (usury).” (TMQ 2:275), and since there is no authentic text which specifies it then it remains general. It cannot be said that the narration:
«لاَ رِبًا بَيْنَ الْمُسْلِمِينَ وَأَهْلُ الْحَرْبِ فِي دَارِ الْحَرْبِ»
“there is no interest (usury) between the Muslims and the enemy in Dar Al-Harb” specifies it since the narration is weak as it is Mursalfrom Makhul. Shafi’i said in Al-Umm that it is not confirmed and it is not an evidence, and Ibn Muflih said the report is unknown - so it is not suitable as an evidence to prove the permission of interest, and nor does it specify/restrict the verse, and so the verse remains general. Therefore, foreign investment is forbidden in the same way as investment from the subjects (Muslims and Dhimmis) because it is interest and thus it is forbidden.
As for the prohibition of development through foreign funds this is because it leads to Haram in agreement with the rule: “The means to something forbidden is also forbidden”, and the strongest possibility is enough to make something prohibited, so what about when foreign development leads to a confirmed Haram? It is confirmed by the senses and by information whose authenticity is trusted that the use of foreign funds for development in the country is the method to extend the influence of the disbelievers over them, and extending their influence in the land is Haram.
As for concessions, it is also a Western term, and has two meanings. Firstly, that a particular foreign State is given special rights with the consideration that they are an obligation for that state upon the Islamic State, such as the concessions that the Islamic State gave in the nineteenth century while it was weak, and such as the concessions that Britain and France used to have in Egypt, such as the foreign subjects being judged according to the laws of their country rather than the laws of Islam, and the example of the State having no authority over the foreigners. These concessions, with this meaning, are forbidden from two angles; firstly: they take away from the sovereignty of the Islamic State, and give the disbelieving States authority over the Islamic lands, which is something decisively forbidden (Haram Qat’an); secondly: they prevent the rule of Islam being applied upon the non-Muslims in the Islamic State and make the rule of disbelief (Kufr) applicable in its stead, which is also decisively forbidden. Due to this, concessions according to the meaning mentioned are prohibited.
As for the second meaning of concessions, it means to give a permit to carry out a permitted action, and those without the permit would be forbidden. This is all forbidden, irrespective of whether it was being applied to the foreigner or not, since any permitted issue is permitted for everyone, and so to restrict it to a particular individual while prohibiting others, is forbidding something which is permitted for the people. It is correct that the State can organise the permitted issues according to the styles which would enable it to benefit from them in the best manner; however it is not correct that this organisation would prohibit anyone from something that was permitted.
Accordingly, concessions according to this meaning are also prohibited for the foreigner and the one who was not a foreigner, and the text mentions foreigner since giving the concession to him is a cause of harm, since it gives him control over the country, as is the case with the oil concessions.