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Who are the Caliph Umar bin Abdul Aziz?

Caliph Umar bin Abdul Aziz was my role model in Islamic Economy .  I’m very admired with his principle in life and because of him, I'm keep believe that one day our world can became a better place by implement Islamic Economy as our core economy system.
Caliph Umar bin Abdul Aziz was in reign for a period of only two years and five or six months, but the caliph has been successful in revolutionising almost all the systems within the field of power that he holds as a caliph. Those fields were political, economic, education and social[1].
People lived peacefully under his reign [2]. As a proof, the citizens of Basra were very happy whenever the messenger from the caliph came to their area as they know, they will be awarded with good news from the caliph. Once, the messenger comes in tears. The tears also bring tears to the whole citizens of Basra. The messenger went inside the Basra Mosque and read aloud the letters which told the news of the death of the Caliph Umar bin Abdul Aziz.
The event showed that Caliph Umar bin Abdul Aziz was a caliph who really performed his duties to such extend that makes people love his reign so much, unlike the previous caliphs who were guilty of fraud particularly when handling treasury assets.
Umar Abdul Aziz was well-known as a ruler who implemented a system of government based on Islam. His implementation was considered a success compared with his predecessors or successors (Mohd Saufee, 2015). This involved the implementation of economic and political approaches based on the uswah hasanah of Khalifah Umar Abdul Aziz itself. He established that the government should be managed based on the Quran and Sunnah (Al-Shallabi, 2010). His personality and character as a Muslim formed the guideline in selecting his workforces as well as implementing all affairs and other matters (Muhammad Tahir, 2013). During his tenure as the Caliph, he had set two conditions in his office. First, he worked based on truth and applied aspects of justice in his governance, he would not oppress and persecute anyone in managing the Bayt al-Mal; second, he divided the national wealth to his subjects in Madinah. These conditions were accepted by Khalifah al-Walid. Khalifah Umar Abdul Aziz then performed his duty well. The people of Madinah welcomed him with joy (Al-Shallabi, 2010: 35). This event had proven that Khalifah Umar Abdul Aziz used his political power in managing economic matters and the welfare of his subjects, so that they may live peacefully and prosperously.
Based on a research paper of  Radieah Mohd Nor Department of Management
University Sains Malaysia, Malaysia . She discussed about the factor that determined the successful treasury management by the caliph. It was a preliminary discussion, but she was able to put the factor in a nice way and can be understood easily.
The success factors that will be discussed in this paper are, firstly, the creation of a healthy climate for economic growth. Secondly, strengthening of treasury funds. Thirdly, stimulating and boosting the business sector. Forth, creating new rules for agricultural sectors. Fifth, focus on the general fund stored in the treasury. Sixth, vigilant toward the use the national treasury. These six factors will be discussed in the following sub-topic.

1. Creation of a Healthy Climate for Economic Growth
The attitude of predecessor of Caliph Umar bin Abdul Aziz was a burden to the people. The rich keep getting richer and the poor became poorer. The situation was recognized by Caliph Umar bin Abdul Aziz when he expressed his dissatisfaction over the way Caliph Suleiman bin Abdul Malik rules. The way Caliph Suleiman bin Abdul Malik rules has made the people lives in economic systems which unfavourable to them [3]. When Caliph Umar bin Abdul Malik was appointed as caliph to replace Caliph Suleiman bin Abdul Malik, he has created a healthy climate for economic growth for the people and their country as well. The system has profited the people and eventually has increased treasury funds [4].
Among the enhancements that were implemented was prohibiting the governors and government employees to do monopolies of national assets and wealth. In addition, the caliph also forbade the governors and government officials to confiscate and seize the people’s assets unjustly [5]. Properties that were confiscated unjustly before he enforces the law were reinstated to the original owners. He investigated and makes it public so that people who were oppressed before will come forward to reclaim their properties. However, if the identity of the owners remained unknown, the properties are to be owned and used properly for the people [6].
Moreover, the Caliph Umar bin Abdul Aziz also build infrastructure such as bridges, public transportation, dig a few wells, build roads and drainage system (dig the land to build river). In developing these infrastructures, Caliph Umar bin Abdul Aziz ordered it without collecting funds from the people. The instructions were issued so that the governors and civil servants will not taking advantages of the people by charging taxes for the construction [7].
The caliph effort has indirectly made his people getting involved in business and trade. The increase in revenue of the trading has increased the treasury fund too, especially funds that come from zakat and ‘usyur. These have resulted in many zimmi to embrace Islam.
The creation of a healthy climate for economic growth has impacted by increasing the treasury funds. The wisdom of providing this enhance system was due to the acquisition of knowledge by the caliph. The caliph also was a scholar who has issued fatwas. Thus, his status as a caliph has made it easier for him to enforce the fatwas in his ruling system. Such situation has made it easier to strengthen the treasury management during his reign.
Making a positive authoritative atmosphere is not another thought, but rather it has turn into a corporate basic presently. As development moderates and benefits slack, organizations are examining key measurements of their atmosphere and applying their insight to the whole business atmosphere change.

2. Strengthening of Treasury (Baitulmal) Fund
Islamic funds deposited in the treasury during his time were zakat, ufti, khaaraj, usyur, a fifth of ghanimah, and fa’ie. However, overall the funds from zakat was increased due to the increased of revenue from the business, trades and agricultural sectors. Increased of zimmi who converted to Islam also contributing in increasing the zakat’s fund as there were more Muslim who can contribute zakat. A new fatwas issued by the caliph regarding the expansion of the law to pay zakat for the trades of fish and honey also lead to an increase in zakat funds.
Zakat overflow occurred during the reign of Caliph Umar bin Abdul Aziz as it was said that almost all of the people were not eligible to be the recipient of zakat. It has been narrated by Yahya bin Said, who was governor at the time. He said:
“Saya pernah diutus Umar bin Abdul Aziz untuk memungut zakat ke Afrika. Setelah memungutnya, saya berniat untuk memberikannya kepada orang-orang fakir. Namun, saya tidak menjumpai seorang pun. Umar bin Abdul Aziz telah menjadikan semua rakyat pada waktu itu kaya. Akhirnya, zakat tersebut saya putuskan untuk membeli hamba sahaya lalu memerdekakannya”. (I was sent by Umar bin Abdul Aziz to collect zakat from Africa. After collecting it, I intended to give it to the poor people. However, I did not find one. Umar bin Abdul Aziz has made all the people rich during that time. Finally, I decided to use the zakat fund to buy and emancipate slaves) [8].
Ufti imposed on the zimmi living in Muslim countries also were based on Islamic law. Prior to the reign of Caliph Umar bin Abdul Aziz, ufti was imposed on the converted Muslim. During his reign, the caliph removed the rules as it was conflicting with Islamic law. His fair decision has resulted in more zimmi convert to Islam. However, the situation is causing complained from the governor as they said it will reduced the number of people who pay ufti. To deny the allegations, Caliph Umar bin Abdul Aziz has answered with a letter as follows:
“Amma Ba’d. Sesungguhnya Allah SWT telah mengutus Nabi Muhammad SAW untuk menyerukan agama ini kepada seluruh manusia, bukan sebagai pemungut cukai dan ufti”. (Amma ba’d Almighty Allah sent the Prophet Muhammad to call for the religion of all mankind, not as a tax of ufti collector) [9]. For zimmi living in poverty, the caliph did not imposed ufti on them. He did as was done by Hadrat Umar bin Khattab RA who issued funds from baitulmal to help them [10]. His decision has strengthened the ties between the people and governor. Moreover, people’s trust toward the governor also increased. The defamation against underfunded treasury when governor was instructed not to collect ufti from the converted non-Muslim was also eliminated by then [11].
The increased of zimmi who embraced Islam during the caliph time has resulted in increased of zakat’s payer. This occurs because the converted zimmi was rich, so they were able to pay zakat from the revenue of their enterprise in commercialize business and trades [12].
Prohibition of the sales of land bounded by land tax also resulted in increased of kharaaj. Prohibition of the sales of the land was an ordered from the caliph which was in alignment to the sharia. Apart from the ban, Caliph Umar bin Abdul Aziz also has been building drainage systems for irrigation purposes and roads to facilitate the process of exporting out the crops [13].
Elimination of several taxes in business also made many zimmi have desire to expand their business. These have resulted in increased of ‘usyur, thus further increase the baitulmal funds during the caliph reign compared to other caliph before him.
However, the funds in form of a fifth of ghanimah and fa’ie were not much during his reign. It happens because the caliph focused more on the paramount matter at that time, which was improving the people and the country’s condition. His short period in reign also did not gave him chance to carry out war but only to correspond via letters to kings and governors to embrace Islam.

3. Stimulating and Boosting the Business Sector
When the unreasonable taxes imposed previously has been removed by the Caliph Umar bin Abdul Aziz, the price of agricultural products declined. This situation makes the increased demand for goods which ultimately make business more brisk than ever compared to the time before the unreasonable taxes were eliminated.
Caliph Umar bin Abdul Aziz also urged the governors to build facilities along the merchant’s routes. Homes for transits were available and merchants were allowed to stay for one day and one night there. However, those who were sick were allowed to stay beyond the one day one night period. Muslim traders who lost, or whom having their merchandise stolen or were inflicting by other disaster were given helped too. All their losses will be guaranteed by the baitulmal. Those security and convenience indirectly has motivated traders and thus boost the business sector [14].
Apart from that, any provision for the traders is prohibited so that the traders will focused more on their trades rather than on the gift. Any merchants who were bankrupt, his debt will be settled by the baitulmal. Caliph Umar bin Abdul Aziz done that as an encouragement for the traders to not gave up especially for those who are still new in business and trades sector. Standardization of weights and measurement were carried out earnestly by the caliph [15]. It was also a part of national law during his reign [16].
Caliph Umar bin Abdul Aziz also prohibits the governors and close relatives to the royals from involved in business. He forbade it to provide healthy competition between businesses and to avoid changes of market price in their favou [17].
Stimulating development can fortify growth and competitiveness while all the helping nations propel their potential at the innovation. This accomplishment, then again, requires both an approach domain and ventures that are multi-pronged considering replication of achievements from around the world, and in addition adjustment to particular nation connection.

4. Creating New Rules for the Agricultural Sector
Caliph Umar bin Abdul Aziz also implemented new regulations in the agricultural sectors. Amongst them was to prohibit the sale and purchase of land bound by lease. This prohibition was issued by the caliph because he said it was not in Islamic law, unless the land was acquired through war. However, if the lease were to happen before the new rules were implemented, the owner can give alms in lieu of the lease instead [18].
Attention was also given to the farmers by eliminating the tax imposed on them. Various taxes imposed on the land’s owner causing more of them to just leave their land unattended. Some of them have to sell their lands in order to avoid penalties and taxes. Moreover, people also avoid from having lands in order to escape the burdensome taxes [19]. As a solution, the caliph eliminates the taxes to stimulate the growth of agricultural sector back.
Recovery of abandoned land was also made by Caliph Umar bin Abdul Aziz by encouraging the people to open up new land to be developed or used for agricultural purposes. Furthermore, land tax was only imposed on land that produces revenue. Loans were also provided to encourage more agricultural production [20].
Himaa lands were not allowed to be solely owned by only a person or party only. Instead, the caliph ordered the land to be used wisely by the Muslims. Such land was more likely to have waqf status. However, the himaa land in the Naqii district was more dedicated for camels that come from alms or charity as the specialization has been determined by the Prophet [21].
Caliph Umar bin Abdul Aziz also encourages his people to explore new land that has no owner. Moreover, the land taken from the previous governor which was left unattended and having unknown owners or heirs, were utilised accordingly by the caliph. The revenue from the lands was handed over to the baitulmal [22].


5. Focus on General Funds Stored in the Baitulmal
Caliph Umar bin Abdul Aziz was very concerned regarding the public funds held in the baitulmal. He distributes the funds for the benefit of social protection. Among the efforts was to pay attention to the poor and needy. He always tried to solve problems and complained that was bring upon him. For example, the caliph received a letter from Fartunah as-Sauda’ who was a slave to Dhi Ashbah. She wrote complained about the wall of her house that was low which make it prone to attack from bad guys and having her chicken stolen so often. Caliph Umar bin Abdul Aziz immediately replied her letter and having a letter sent to Ayyub bin Syurahbil, who was his officials at Egypt, to raise the walls of Fartunah as-Sauda’s house [23].
The caliph also pays off the debt of his people unless it was used for vices or sinful purposes [24]. The debts of citizens who have died are also were pay off using the baitulmal’s fund [25]. The funds were also used to settle any fine that has been imposed on his people. As has been reported, the accumulated funds of baitulmal were so much that the governor of Kufah wrote to the caliph regarding the matter. The caliph then replied ad follows:
“Engkau telah memberitahuku tentang Baitul Mal yang banyak menyimpan dana. Dana tersebut boleh engkau gunakan untuk melunaskan hutang pasukan perangmu yang tidak digunakan untuk kemaksiatan atau juga untuk mereka menikah namun tidak memiliki apa-apa sebagai mahar untuk pengantin wanita. Wassalam”. (You have told me about the abundance of funds in the Baitulmal. You can use the funds to pay off debt of your war team which wasn’t used for vices purposes or even for those who wanted to get married but did not have anything as dowry for the brides wassalam) [26].
Similar deals have been read at Kufah Mosque, which offering to pay the people’s debt [27] and wedding dowry for those who don’t have the ability to provide dowry to the bride. All of the payment was to be taken from Baitulmal funds.
Large attention also was given to those who are paralyzed or suffered any illness. The caliph has given each of the paralyzed and ill people a slave to attend to their necessity. It was reported that during that time, each of sick people have slaves attending to their needs and each blind person have slave to help them move around [28].
Muslim’s prisoner of wars and slaves also were giving attention by the caliph. Using the Baitulmal funds, the caliph tried to free the captured Muslims and freeing any slaves. Moreover, those who have involved in criminal cases and qisas also were protected by the caliph. The caliph once, has wrote letter his governors to not to bind Muslims prisoner in way that will make it more difficult for the prisoner to stand up for solat (pray). The prisoners were also given good care in terms of suitable food and clothes either during summer or winter [29].
High salaries were given to the governor while the caliph has eliminated specific compensation and wages that was practiced by the caliph before him. His own salaries otherwise has been reduced. He did it so that the governor and officials became richer to prevent them from involved in fraud [30].


6. Vigilant with the Use of National Treasury
Caliph Umar bin Abdul Aziz was very frugal in the use of national treasury. He has different lamp when he was attending to the national and personal affairs. He has sent letter to Abu Bakr bin Muhammad bin Amru bin Hazm, the governor of Medina, to not using the same candles which was provided to use to manage national affairs to light up the road if he was to be out at night for personal affairs. In addition, Caliph Umar bin Abdul Aziz also has written to Suleiman, which also a governor of Medina, to prohibit wasteful use of paper. Those prohibitions were issued by the caliph to avoid waste and extravagance used of the baitulmal funds [31].
Conclusion
The wisdom of Umar bin Abdul Aziz in managing the national treasury has made abundance of baitulmal funds was available. Despite the overflowing of treasury funds, the caliph however did not use it arbitrarily for himself or his family. Although the caliph and his family live in a poor condition, people under his reign live a prosperous life. As narrated by a male descendent of Zaib bin Khattab:
“Umar bin Abdul Aziz memerintah selama dua tahun setengah, iaitu 30 bulan. Dia tidak meninggal dunia kecuali selepas membuatkan kita kaya dengan membawa harta yang melimpah-limpah, lalu dia berkata, ‘Bahagikan ini kepada orang yang kamu anggap fakir’. Umar terus melakukan itu sampai dia pulang dengan membawa harta yang tersisa. Saat itu, tidak ditemukan lagi orang yang berhak menerima zakat dan santunan negara, sehingga harta itu dibawa kembali ke baitulmal. Umar bin Abdul Aziz telah membuat seluruh rakyatnya menjadi kaya.” (Umar bin Abdul Aziz ruled for two years and a half, i.e. 30 months. He did not die but after making us rich with riches galore, and he said, “divide this to anyone you think is poor”. Umar continued to do that until he returned with the leftover funds. At that time, he no longer found a person entitled to receive zakat or states compensation that the fund has to be brought back to Baitulmal. Umar bin Abdul Aziz has made all his people become rich) [32].
Successful baitulmal management during the period was not only depended on the strategies undertaken by Caliph Umar bin Abdul Aziz. The success was also influenced by four main factors which the caliph regards as the pillar of power. The pillars were the caliph, the governor or district’s ruler, the judges, and the officials of Baitulmal [33]. The caliph has described that all the four factors were essential to create a prosperous country. Through a competent caliph, governor or district rulers, judges, and baitulmal’s officer only the successful management of baitulmal funds could be done.
Any financial institution such as baitulmal, state bank, world bank and so on, if were managed through solid strategies by competent and honest person can bring substantial benefits to the people and the country. It was proven by history as was prevailed during the reign of Caliph Umar bin Abdul Aziz.



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KUALA LUMPUR • Malaysia's government spending could revive gains in the stock market that is South-east Asia's worst performer despite receiving the most foreign investment in the region. Next year's Budget, to be released on Oct 27, is likely to include an increase in cash handouts and infrastructure spending that will filter through to consumption stocks, builders and construction material suppliers, said Mr Rudie Chan, chief investment officer at East spring Investments in Kuala Lumpur.

Prime Minister Najib Razak has said the Budget will address the cost of living for citizens and also housing issues, according to the official Bernama news agency. Mr Chan noted: "The Budget is going to be expansionary, there's no question about it. It's going to be an election Budget essentially.

Datuk Seri Najib's spending plan, which will be the final one announced before a national election that must be called by mid-next year, could help spur gains beyond technology companies that have been the best stock performers this year.

While Malaysia has received RM9.5 billion (S$3 billion) in foreign investment since the start of January as its economy grew at the fastest pace since 2015, the FTSE Bursa Malaysia KLCI Index has only added 6.9 per cent, lagging behind the 23 per cent gain by the MSCI Asia Pacific Index. Even as gains on the KLCI index of 30 companies lagged behind regional peers, technology-related shares not tracked by the benchmark have fared better.

The Bursa Malaysia Technology Index, the best-performing industry gauge out of 10, has jumped 77 per cent this year and closed at a 12-year high last Friday, driven by the global demand for electronic products that are fed into the global technology supply chain from the country.

Property developers could benefit from the upcoming Budget, as Mr Najib is set to address the lack of affordable housing, according to a report by Ms Ivy Ng Lee Fang and Ms Michelle Chia from CIMB Group.

Mr Geoffrey Ng of Fortress Capital Asset Management said: "This would be an election Budget that would pull out all the stops, I suppose, in terms of ensuring that the rakyat is shielded to a certain extent from the higher cost of living." He was using the Malay term for the citizenry.

The budget would likely give a boost to lower-income-related consumption stocks and Fortress is trading selected construction and property-related companies, he added.

Yet, even with a potential boost from the Budget, Malaysia is less attractive than its peers, said Mr Ng, who is underweight on the nation. Hong Kong and, to a certain extent, Singapore are more liquid and have cheaper valuations, he said.

For Eastspring, trends in consumer spending will determine how the stock market performs.

Investors should watch out for any gains in expenditure on products ranging from cars to basic staples, as government initiatives become the market's next big driver for the following couple of quarters, Mr Chan said.

Malaysia's consumer spending surged 7.1 per cent in the second quarter from a year earlier, rising at the fastest pace in more than two years. Clothing retailer Padini Holdings has surged 88 per cent this year, as profit for the financial year ended June rose 15 per cent to RM157.4 million. "You really have to dive deep and research on companies that are still undervalued and underappreciated," Mr Chan said. "The market is basically a stock pickers' market."
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KUALA LUMPUR • Malaysia's economy expanded at the fastest pace in more than two years in the second quarter on the back of domestic demand and robust exports, defying expectations for a slight slowdown.

The strong performance is likely to add to speculation that Prime Minister Najib Razak will call early polls to take advantage of improving economic conditions and a fractured opposition.

South-east Asia's third-largest economy grew 5.8 per cent in the April-to-June period compared with a year earlier, data showed yesterday, well above a Reuters poll forecast of 5.4 per cent. Growth accelerated from 5.6 per cent in the January-to-March period, which had also been better than expected.

Following the data, Malaysia's central bank raised its 2017 growth forecast to above 4.8 per cent, from a prediction of 4.3 per cent to 4.8 per cent. "Based on the numbers from Q1 and Q2, we expect (full-year) growth will go beyond our earlier forecast," said Bank Negara governor Muhammad Ibrahim.

Construction, services and manufacturing grew at a faster pace in the quarter, offsetting weakness in mining and agriculture. The governor expected domestic consumption and exports to improve further in the second half, but warned of risks related to global factors.

Exports grew 10 per cent in June from a year earlier, well below May's 32.5 per cent. But analysts believe the slide may be due to seasonal factors, noting that global demand still seems strong.

Fitch Ratings affirmed Malaysia's A- credit rating with a stable outlook on Thursday, citing its strong economic growth and the government's ability to contain the impact of falling oil prices on its budget deficit. "It is another recognition for the country's economic management," Datuk Seri Najib tweeted earlier yesterday about Fitch.

The current account surplus grew to RM9.6 billion (S$3.05 billion) over the second quarter from RM5.3 billion in the first quarter, due to a larger goods surplus and smaller service and primary income deficits.

Investment in Malaysian stocks, bonds and other financial assets also improved sharply, with portfolio inflows rebounding to RM16 billion, compared with outflows of RM31.9 billion in the first quarter.

The turnaround may be partly due to improved confidence in the ringgit. It has firmed 4.5 per cent against the US dollar this year since hitting a 19-year low of RM4.988 on Jan 4. But foreign direct investment (FDI) fell to RM8.3 billion from RM17 billion in the first quarter. While FDI flows can be volatile, the weaker reading could point to loss of economic momentum in the months ahead.

The central bank also said inflation is expected to ease further after moderating to 4 per cent in the second quarter. It has kept interest rates unchanged since July last year.

Mr Najib may be facing his toughest election yet as he looks to counter bad press from a graft scandal involving state-owned fund 1Malaysia Development Berhad and a challenge from his former mentor Mahathir Mohamad.

On Wednesday, Mr Najib brandished more than US$3 billion (S$4 billion) in housing packages for the majority ethnic group. Last month, he gave cash handouts and offered debt waivers to oil palm farmers, a key voter base. The handouts have fuelled speculation he will call an election earlier than the scheduled deadline of the middle of next year.

"Although this is a cyclical upturn rather than a structural one, it certainly gives PM Najib some respite, given the clouds hanging over the administration's management of the economy," said Ms Trinh Nguyen, senior Asia economist of Natixis Asia in Hong Kong.

From: New Straits Time, AUG 19 2017
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Study Economics and learn about economic theory, develop your skills of logical thinking and pick up some great interpersonal skills along the way!

Choice is at the heart of all decision making. Individuals, businesses and governments are all faced with making choices in situations where resources are scarce. This is where a knowledge of economics is vital.

Economics applies to most aspects of everyday life. By studying economics you will examine topics of obvious importance to human well-being. Economics is applicable in a wide range of fields, including:
•                     Business
•                     Finance
•                     Administration
•                     Law
•                     Local and national government

Increasingly, policy debate in all areas is being cast in economic terms. Understanding most current issues requires knowledge of economics.

Economics provides a valuable set of intellectual skills

Economics is more than just a subject it’s a way of thinking. It provides a logical way of looking at a variety of issues.

Practise the analytical techniques employed in economics and learn to develop your:
•                     General literacy
•                     Communication and numeracy skills
•                     Skills of abstraction (balancing simplification against relevance)
•                     Skills of logical deduction
•                     Critical thinking

Studying Economics provides insights into:
•                     The general environment of resource allocation decisions
•                     Opportunity costs and trade-offs
•                     Project evaluation and government policy


These are crucially important in many areas. Often these insights are not obvious, and can be counter-intuitive to those who don't apply economic reasoning.
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