PAS: SHARIA ECONOMICS UNDER AN ISLAMIC STATE

The chapter opened with the words of Tuan Guru Nik Abdul Aziz, chief minister of the state of Kelantan and spiritual leader of PAS, at an event commemorating the twenty years PAS has controlled the state government.¹⁴ A national opposition party, PAS previously administered the state from 1959 to 1978, after which UMNO took control.

PAS combines Islamic ethics with several related religious notions and a political activist Islamic ideology, producing a “pious worldly consciousness” that brings Islamic ideas and feelings into economic processes as materially transformative forces, a “celestialization” that seeks to provide fulfillment in this world and the world hereafter.

Following the electoral victory in 1990, PAS elected a popular religious scholar, Nik Abdul Aziz, to be the new chief minister of Kelantan. Deploying the slogan “Developing with Islam” chief minister Nik Aziz set out to transform the state into a model Islamic polity. At the gathering celebrating twenty years of “Developing with Islam,” he stated that this slogan means “we develop in accordance to a foundation determined by Allah, the Glorified and Exalted.” However, development should not be “spiritually empty,” but rather mindful that this world is connected to the hereafter (Nik Abdul 2010). Using the metaphor of an airplane, he explained that a person who focuses only on the material world is like an airplane with one wing, whereas a person who thinks of both the material and the spiritual is like a plane properly equipped with two wings. The chief minister’s formulation expresses a pious worldly consciousness that promotes a “sharia-compliant” form of economic development.

PAS set out to distinguish itself from UMNO, which had already initiated its own dakwah (proselytizing) campaigns, by demonstrating its commitment to implementing sharia and establishing an Islamic state.

Soon after regaining control of Kelantan, PAS leaders also implemented policies aimed at cleaning up “sinful” activities (maksiat) in the entertainment service sector, which they argued were allowed to continue under the UMNO-BN state. Although there were many Islamic schools and institutions, there were also many centers of “sinful” behavior.¹⁷ Many of my local interlocutors informed me that before PAS came to power, there was an area in the middle of town with numerous nightclubs, billiard halls, movie theaters, gambling dens, and prostitution lairs.

In addition, state government officials promoted the reduction of “wasteful” consumption and tried to embody this in their practices. Government officials accepted lower salaries and avoided extravagant events. In contrast to the forms of “proper” Malay middle-class consumption promoted by the UMNO-led federal government, PAS leaders advocated more modest and restrained consumption. These moderate values appear to resonate with both middle-class residents in Kuala Lumpur and corporate sharia elites of the Islamic resurgence (see Fischer 2008, 90; Sloane-White 2017). From this pious Muslim perspective, “wasteful” consumption and use of God-given resources is associated with Shaitan (Satan) and is therefore unethical behavior. In addition, in 1991 Kelantan state leaders banned performances of mak yong and wayang (traditional dance drama and shadow puppet arts)—which they interpreted as entailing elements of “superstition” and “un-Islamic beliefs”—as well as inappropriate attire and mixing of genders. With the official 1998 Enactment Controlling Entertainment and Places of Entertainment, they codified restrictions on traditional arts and entertainment venues deemed to be flouting Islamic values and norms.

Friday morning religious instruction, Kota Bharu, Kelantan

My local interlocutors often referred to the widely adored Kelantan chief minister Tuan Guru Nik Aziz as an example of “proper” Islamic consumption (cf. Fischer 2008). Despite having been chief minister for twenty years, he still lived in the same kampong house he did before taking office. His long-term residence in a kampong house, a popular symbol evoking continuity with the Malay rural past, casts him as a common man rather than part of the “New Malay” elite (see Thompson 2007, 177, 183). They also proudly note that he still wears baju melayu (traditional Malay Muslim attire) with a turban like he did years ago, in stark contrast to the exquisite business suits and dress shirts of UMNO leaders. The Kelantan state government’s “Developing with Islam” project, “anti-sinful-activities” campaign, and exemplary consumption practices remind and motivate people to live according to the straight path predicated on sharia rules and principles. Furthermore, the public absence of maksiat, such as alcohol consumption, prostitution, and gambling, and the simple, corruption-free lifestyle of the Kelantan chief minister, are embodied practices and symbols of the Islamic path to salvation.¹⁸

Interest-free banking was a national Muslim concern prior to the PAS electoral victory in 1990. Malaysian Muslim scholars shared a consensus that paying or receiving interest was prohibited according to sharia. The UMNO-led federal government had already embraced interest-free banking as part of its Islamization program establishing Malaysia’s first Islamic bank, the Bank Islam Malaysia Berhad, in 1983.

Furthermore, PAS, unlike UMNO-BN, established the principle of separating state funds into halal (permitted) and non-halal accounts based on their sources. If funds originated from interest, gambling, or alcohol, for instance, they were separated from funds made via “morally clean” sources (halal), such as agriculture and trade in permitted products. In 1991 the state government established an innovative fund called Tabung Serambi Mekah (TSM), which included money from halal and haram (forbidden) sources held in separate accounts and used for different purposes. PAS ulama explained that this fund provides an opportunity for people with money from haram sources to put it to good use in support of public works. According to the deputy chief minister’s records, only halal funds were distributed to needy segments of the population—the poor and victims of natural disasters—whereas funds from haram sources were used for infrastructural projects or building non-Muslim religious institutions. These policies not only relieved pious Muslim fears that their halal money was being mixed with haram money but reaffirmed that untarnished good was being done with it through distribution to poor and needy Muslims. Arguing that this was the proper separation and allocation of these funds, PAS leaders enacted their ethical cultural schema and its extension through UMI. That is, state officials and civil servants were embodying pious Islamic ethics through their moral and responsible handling of funds. During the 2010 fiscal year through October, more than RM 2.5 million was spent from the TSM fund on fixing houses, medical care, help for fire and flood victims, and other forms of assistance.

In a fashion similar to that witnessed with the popular TSM fund, the state government has collected and centralized revenues, sometimes within the Kelantan Chief Minister’s Corporation (Perbadanan Menteri Besar Kelantan; PMBK), and redistributed them to particular segments of the population. The state government collects funds from land, water, and forest concession taxes; leases; permits; service payments; low-cost housing rents; business profits; repayment of loans; and so forth. Officials and civil servants also encourage people who can afford it to donate money to the state. Cik Wan Azhar, a manager of a state agency, said that one of their main ideas in Kelantan is “to make money to help others.” The ideas of ubudiah and mas’uliah come in, he stated, “when Tuan Guru agreed to pay people higher wages, but these people must pay zakat and must distribute the money, and these people with high pay brackets must remember that not all the money belongs to you. Some of it belongs to others.”¹⁹ PAS state leaders and officials not only try to embody the ethical cultural schema in their own policies and programs, but also call on individuals to do the same. The government emphasizes redistributing funds to the needy, including the elderly, disabled, women, and the poor, and to religious institutions, such as Islamic schools and colleges. One popular program is the Skim Takaful Kifaalah, which distributes money to the elderly population, aged sixty and above, from all ethnic and religious backgrounds. Thus, the state leaders integrate and embody pious Islamic ethics—mindful of the hereafter and performing good works—motivating responsible acts of justice for the needy and weak into redistribution processes. This serves to make Kelantan into a sort of Islamic social welfare state. Moreover, this “friendly and helpful style” of PAS leaders endears them with the rural poor and strengthens them against the constant attempts by UMNO to regain control of the state government.²⁰

The Islamic social welfare character of the Kelantan state is also evident in the framing, discursive presentation, and pattern of redistribution of its 2011 state budget. Wan Nik, political secretary of the chief minister, explained that the budget is called “compassionate” and “friendly” because it focuses on improving the living conditions of the needy, a group that comprises the majority of people in Kelantan. He added that their use of the Kelantanese term cakna means “that the government and people as permanent friends work together to develop.” Likewise, Wan Nik writes that the “compassionate budget implements the act of sharing and giving which will raise the future effectiveness of distribution efforts” (Harakah 2010a).

It should be noted that the infusion of Islamic notions and values into consumption and distribution processes is also used for proselytizing (dakwah) and political purposes, although we must be careful to avoid oversimplification (cf. Kessler 1978; Farish A. Noor 2003, 2004; Norani Othman 2005). For instance, PAS officials consider restrictions on “sinful” entertainment activities, avoidance of extravagant events, separation of non-halal and halal revenues, and redistribution of resources to lower social strata to be based in religious directives; however, they also use these practices to disseminate information about Islamic teachings and to point out the flaws in UMNO-BN practices. They severely attacked the federal government’s 2011 budget for its mega construction projects, plan to expand Selangor’s entertainment hub, and continued mixing of non-halal and halal revenues (Harakah 2010b). We can also note a similar, though variable, intertwining of pious, dakwah, and political motives concerning the launching of “sharia currency” and the Cheng Ho Expo. Moreover, state officials, PAS politicians, and their supporters consistently argue that the state government could accomplish much more for common people if it received the Petrolium Nasional Berhad royalties from offshore oil drilling that the federal government has denied them. They argue that Kelantan should receive 5 percent of the oil and gas revenues as required by legal agreements between the state, the federal government, and Petrolium Nasional Berhad. However, the federal government has interpreted the sites of drilling to be within the zones of other states, Sabah and Terengganu, rather than Kelantan. PAS officials’ pious ethical schema is pluripotent, productive in multiple discourses and contexts. They use it to express and embody their religious virtue, argue for the correctness of the Islamic way of “enjoining good and forbidding wrong,” and struggle for political and ideological victories over their Malay Muslim opponents in UMNO.

In August 2010 the Kelantan state government launched “sharia currency,” the dinar and dirham (gold and silver coins) of Kelantan. Four years earlier, in 2006, they had minted their first gold coins, but this time both gold and silver coins were minted, in several denominations, with new standards and institutions. PMBK and the Kelantan Golden Trade Sdn. Bhd., its subsidiary, organized the sharia currency inauguration event (Qiadah 2010, 16). They had the World Islamic Mint in Dubai mint gold dinar and silver dirham according to the standards of the World Islamic Trade Organization. State officials found a basis for the position of gold and silver currency within an Islamic way of life and used the launching for dakwah and political purposes.

State leaders and PAS activists also perform dakwah by contrasting the benefits of sharia currency with the problems wrought through the contemporary dominance of the paper currency system. Proselytizers present gold and silver coins as an interest-free method of storing value and wealth, immune to inflation, speculation, and commodity manipulation and trickery. This message appeals to the sensibilities of Kelantan’s large Malay peasant population, who are accustomed to storing wealth in their land. On the other hand, the paper money system is replete with defects and presented as at least partially culpable for the Asian economic crisis of the late 1990s and the US and European economic crisis of the mid-2000s. They viewed the commodity manipulation and financial investment scams, integral to these economic crises, as inherent shortcomings of a paper currency system. For these proselytizers, an Islamic monetary system offers the solution.

In addition, the launching of sharia currency was used for political and ideological ends. The state government presented itself as a leader of the Islamic revival and renewal, as an Islamic state led by an alim (religious scholar) picking up from where the fallen Uthmaniya Caliphate left off. Sharia currency is a symbol of the return to this tradition. It also indexes the failure of the secular-oriented UMNO-BN federal government to fully implement Islamic principles. The chief minister’s corporate magazine notes that even though Tun Mahathir called for gold coins in response to the monetary crisis, the federal government has failed to adopt the Islamic alternative. Furthermore, the currency is used discursively to express criticism of the effects of colonialism in Malaysia and opposition to dependence on pro-Israeli Western powers.

Given the practical difficulties with implementing gold and silver coins as an all-purpose currency—akin to problems with hudud—performing dakwah and the politics of sharia currency have taken on a greater significance. Initially, there appeared to be rather widespread uses promoted for gold and silver coins. Not only were they recommended for paying zakat (Islamic tithe) and marital exchanges, but hundreds of businesses were listed among those committed to accepting dinar and dirham for their transactions. However, after extensive criticism from the federal government, and perhaps from other opposition partners, chief minister Nik Aziz (2010, 41) clarified that the coins were only to be used as a matter of free choice by those engaging in “barter trade.” State officials and local supporters were able to claim that sharia currency could not be fully implemented because the federal government blocked the state government’s efforts.

Kelantan state officials organized the Cheng Ho Expo, which took place in the Kelantan Trade Centre and was opened by the sultan of Kelantan on November 21, 2010.²¹ Over one thousand people attended the international event, including mayors from several areas in China, Uzbekistan, Turkistan, Taiwan, and Thailand (Harakah 2010c). The event included official speeches, cultural arts, halal food festivities, Cheng Ho historical exhibits, and a Qur’anic recitation by a member of the Chinese delegation.

The main goal of the Cheng Ho Expo was to facilitate trade between China and Kelantan and to make the state into a distribution hub in the region. Cheng Ho City, a new trade center, is planned for Rantau Panjang in Pasir Mas. It will be built in a Chinese architectural style and include premises for halal Chinese food to be served to local Muslims. Indeed, Datuk Husam Musa, the state secretary of development, maintained that while the trade they are trying to develop with China will include several products, the most important are halal food products, since that industry is important for Malaysia’s Muslim community (Sinarharian 2010b). Similarly, chief minister Nik Aziz (2010, 38) stated that it is hoped that following the Cheng Ho Expo Kelantan, given its geographical proximity to China, “will become a doorway for all sorts of products, especially halal products, which possess a high marketing potential in Malaysia these days.”

Similar to spoken and written language pertaining to other forms of distribution, the discourse surrounding the Cheng Ho Expo and the development of Kelantan as a trade hub refers to core Muslim values, dakwah, and politics. Chief minister Tuan Guru Nik Aziz refers to Surah al-Quraish stressing the value of conducting trade and business enterprises and the significance of opening the door to trade on an international level. Kelantan state officials also performed dakwah, especially to Malays and Chinese, as they discussed the history of Cheng Ho, a Chinese Muslim, and the large population of Chinese Muslims in China. Through this discourse they lowered the “racial wages” or symbolic benefits often connected to Malay Muslim identity, making Chinese Malaysians feel more comfortable with Islam and motivating Malays to stress their Muslim rather than their ethnic identity. This mode of proselytizing directly feeds into ideological contests with UMNO, whom they often target as struggling over race more than they do for Islam.

Nevertheless, most important for our present discussion is the continued emphasis on instilling Islamic notions and values into distribution processes. In this case, the policy initiative behind the Cheng Ho Expo is the plan for turning Kelantan into a distribution hub for products made in China.

Unlike the extensive circulation of pious Islamic notions in distributive processes, I note quite a limited inoculation of such ideas into productive processes. However, chief minister Nik Aziz (2010, 37), has feinted at infusing Islamic notions into production processes. He refers to Ibn Khaldun’s discussion of economic philosophy, noting the principles of justice, hard work, cooperation, and moderation, and immediately turns to criticize the federal government for unjustly denying Kelantan’s rights to receiving oil royalties. He never returned to apply more fully these concepts to economic production. Here, this political tactic of blaming the UMNO-BN national government for partisan discrimination against Kelantan and its negative impact on economic development obscures the PAS-led state government’s unpreparedness for instilling pious Islamic notions into production processes. Several political-economic and cultural factors impede them in this regard.

First, the federal government–linked agricultural, telecommunications, and energy monopolies dominate the local economy. They provide many local jobs and revenues for the state budget in the form of rents, fees, and taxes. In addition to facilitating the local operation of these monopolies, state agencies operate several smaller businesses both in these sectors and in other sectors where there is less competition with large, powerful corporations. None of these state enterprises is framed as part of an “Islamic economy.” Thus, rather than trying to transform capitalist production processes, the state government actively participates in them.

The PAS-led state government’s position is similar to what Ong (1987, 149–50) describes as the UMNO-led federal government’s participation in global capitalist production in the early 1980s. UMNO ulama urged Muslims to emulate the work ethic of successful Asian “races”—namely, Japanese and Koreans—as part of the “Look East” policy validating transnational capital and new labor relations. Likewise, PAS state leaders relinquish internal corporate organization to the interests of capital while briefly citing Ibn Khaldun, a fourteenth-century Arab historian, to validate their potentially new economic model if only they were given the capital to manifest it. In contrast, Darul Arqam and later Global Ikhwan, and Muslim corporate leaders in some government-linked companies, instill sharia economic models into workplaces and production activities. Kelantan state leaders do not produce any cultural schema comparable to either of these. Instead, they leave internal corporate labor relations and organization to managers and evoke Muslim rather than non-Muslim cultural values. However, unlike these two cases, they have control of a state government that provides them with an opportunity to at least influence micro- and macro-economic principles impinging on the mode of industrial production.

Second, a large base of the PAS-led government’s support consists of Malay peasants whose interests are opposed to widespread industrialization and mega projects usurping large tracts of land. The Kelantan State Economic Planning Unit (2009) finds agricultural, forestry, livestock, and fishery to be the main sectors of annual GDP growth. Add to this the fact that in Kelantan over 70 percent of the population is rural and that even in most towns, other than Kota Bharu, over 30 percent of the land is used for agricultural production, highlights the significance of the peasant population. When I asked state officials why they do not focus on bringing more industrial development to the state, other than citing problems related to the gender division, family disruption, and federal discrimination they also explain that the agricultural base of their economy is more stable and a hedge against economic crises. Nik Wan stated that it is better for the state and the country for local youth to leave Kelantan to work in industries in other states: the remittances they send back to families help the state, while their labor helps national economic development. Moreover, Dato’ Dr. Zainuddin, the deputy state secretary of development, told me that although Kelantan has consistently been one of the poorest states, the residents hold lots of wealth in terms of land and property.²²

Maintaining local Malay land ownership appears to be one of the mainstays of state government policy. Cik Hong, a local non-Muslim Chinese PAS supporter, stated that it is difficult even for Malays from other states to buy land in Kelantan. He also said that several economic development projects funded by outside investors were stalled at the state level when they were made to wait several years for permits. They eventually decided to invest elsewhere. For Cik Hong, it is not so much the federal government that blocks industrial and commercial development in the state, but rather the state government itself and the widespread orientation toward keeping land and property in the hands of local Kelantanese.²³ I think the official discourse and land policies reflect the importance of the Malay peasant political base.

Third, the PAS ulama appear unprepared in their social theory and economic-oriented religious interpretations to instill ethical cultural schema and pious Islamic notions into production processes.²⁴ They have applied the concept itqan to the work of civil servants, emphasizing the value of high-quality work. However, UMI is rarely applied to the relations between workers, managers, and plant owners. How should a sharia-based notion of justice play into salaries, benefits, and profits? Should private companies be allowed to concentrate control over natural resources? Rather than bringing sharia to bear on the mode of production through answering such questions, PAS leaders tend to target the UMNO-BN elites’ bias and inclination toward corruption or point away from these worldly matters to the hereafter. The ethical cultural schema and pious Islamic notions here forestall and temper the pace of industrial growth rather than driving people to use it to accumulate divine merit for the cosmic long term.

For instance, Cik Wan Azhar, an employee of a state agency, recalled Nik Aziz speaking at a dinner sponsored by a successful Chinese gold-mining company. He reported being especially struck when Nik Aziz said, “I’m not that worried if my people are hungry, if my people are poor. But what I am worried about most is if they are rich and they tend to forget about religion.” This made Cik Wan wonder, he said, how Kelantan would be able to develop economically and still be mindful of Islamic principles. It remains for PAS ulama to explain how Muslims can apply pious Islamic ethics, ever mindful of accruing amalan soleh for the afterlife, to their participation in economic production, including labor, management, and ownership in industrial and agricultural enterprises. Islamic scholars in the Middle East and South Asia have expressed a broad range of ideas on matters of economic production. Several have proposed forms of socialist production, while others posit Islamic forms of production as distinct from both socialism and capitalism (see Donohue and Esposito 2007, 78–113, 228–60). Operating with Screpanti’s (1999) institutional definition of forms of capitalism, concentrating on private property regimes and accumulation governance structures, it is unclear whether sharia-oriented Islamic revival movements such as PAS, the Justice and Prosperity Party in Indonesia, and the Islamic Brotherhood in Egypt would establish a form of capitalism if given the opportunity to implement a full-fledged Islamic economic system. Although they embrace the concept of private property, they also propose significant limitations to accumulation governance structures, as does Sayyid Abul A‘lā Mawdūdī (2011, 61–78), an influential figure for these movements. In terms of this Kelantan case, not only is there very limited implantation of Islamic notions and principles into productive processes in the broader society, including non-Muslim-owned corporations; there are also no state government-linked economic corporations framed as “Islamic corporations.” PAS ulama, many trained in the Middle East and Pakistan, have not provided much help thinking through these matters within an Islamic worldview. Perhaps this is also partially due to the broader unpreparedness of contemporary Muslim scholars to address implementing sharia in modes of production that are not explicitly framed as part of an “Islamic economy” (see Muhammad Syukri 1994; Sloane-White 2011).