Dr JAA Note on Dr Asad zaman Paper on Monetary policy.

Note by Dr Javed Akbar Ansari on Dr. Asad Zaman’s Paper On Monetary Arrangment for IEA DAIMG has now proposed two different schemes for the introduction of a Tamveeli scheme to replace capitalist finance in the IEA. Our document “Development of a Planning System in IEA” suggested the nationalization of the financial system and the setting up of a single national commercial institute under Da Bank Afghanistan (DBA) which should be the sole issuer of money and the Awami Islamic Tamveeli Institute of Afghanistan (AITIA) be the principle agency for money and credit distribution in the country. Dr. Asad Zaman has proposed the establishment of a Tamveeli System based on community banking. Dr. Asad Zaman also proposes an excellent method of community organization on the basis of the experiences of the Tablighi Jama’at. We believe that learning from the Tablighi Jama’at and introducing it in the process of community organization can be immensely beneficial for the Islamic government. Both proposals agree that: The purpose of economic policy is the institutionalization of wealth creation as a means for the promotion of the Islamic virtues – sabr, tawakul, qana’at and infaq – at the mass level. (Dr. Asad Zaman terms this as “the public interest”) Monetary policy should be designed to achieve the purpose. To achieve this objective the Islamic government should have the exclusive authority for the issue of money. It is also necessary to abolish the existing banking and financial institutions. It is also essential that the Islamic government exclusively controls the inflow and outflow of all foreign currencies. No foreign currency should be allowed to circulate in the economy. The domestic monetary system should be completely de-Dollarized. The value and circulation of the domestic economy – the Islamic Dinar should be linked to an index of production (GDP) and not to gold or foreign exchange reserves. Money should be de-commodified i.e. it should not be an instrument of trade for the creation of profit. It should be regarded as a public good to serve the “public interest” – i.e. the promotion of wealth creation as a means for the nurturing of Islamic values – Sabr, Tawakul, infaq – at the mass level. The two proposals differ with regard to the proposed channels of distribution of currency and credit. Dr. Asad Zaman proposes that while the Da Bank Afghanistan be the sole issuer of the sole legal tender currency its distribution (and also the distribution of credit) be the responsibility of “community banks” – set up at the mosque level which should determine community needs for money and credit to serve the “public interest” i.e. wealth creation as a means for the promotion of the Islamic virtues of Sabr, Tawakul, Infaq at the mass level. The proposal presented in the DAIMG’s Planning paper suggested the need for abolishing the existing banking system (there were no banks in Islamic history prior to imperialist subjugation) as a necessary condition for the abolition of the money and credit markets which trade money for capital accumulation. A single Awami tamveeli institution – the Islami Tamveeli Institute – was proposed for organizing the circulation of money and the distribution of credit throughout the economy. This was considered necessary for the avoidance of competition (leading to the emergence and functioning of a money market) among money/credit allocators. It was also argued that since the Afghan economy is not yet complex so it would be relatively simple for the Islamic government to approximately asses currency and credit needs at the district and local levels.

Organizing at the community level is absolutely essential for enhancing the popular support of the Islamic government. The imperialists know this and the “bottom up” strategy they have crafted for exercising imperialism’s soft power is based on community penetration – the Humanitarian Group and the United Nations have set up a network of community based organizations (CBOs) and NGOs which are functional in at least 34 provinces (in mid 2021) to erode the mass support of the Islamic government and to secularize community life. To dismantle the community base of the imperialist forces (the HRC, UN agencies, the World Bank etc.) is an urgent necessity and we should aim to complete this process by 2027/28 by which time we should aim at achieving elimination of the need for imperialist assistance (especially in the food and health sectors). Due to the organization of the harbi jihad of 2002-22 the Islamic government has a strong footing in Afghan community life (especially in the rural areas). Now that the Jihad has entered a non-harbi phase and Allah has given us state authority we must use this authority to consolidate our community entrenchment and to rout out imperialist presence at the mass level. Therefore Dr. Asad Zaman’s proposal of setting up mosque based community centers is an excellent idea about which the Tablighi Jama’at can give us in this context is very welcome. The Tablighi Jama’at is the most widespread, most popular and most effective non-political Islamic mass movement in Pakistan and India. As far as monetary policy is concerned these two proposals should not be regarded as exclusive. The Islamic government can both centralize the distribution of currency and credit by setting up an Awami Islamic Tamveeli Institute (AITI) and also seek to establish mosque based network of community institutions for the purpose of assessing and meeting local currency and credit needs. The Awami islamic Tamveeli Institute (AITI) should serve as a coordination and centralizing agency to reconcile local demands and assess the extent to which the provision of currency and credit serves the public interest (i.e. the enhancement of wealth for the promotion of Islamic virtues of Sabr, Tawakul and Infaq). The mosque based community branch network of AITI can also serve the proposed national supply organization (described in the Plan document) for assessment of basic goods needs at district level and then distribution of (especially grain) from assessed surplus to assessed deficit regions. The process of Islamizing monetary policy implementation is a medium term project. We suggest the following temporal phasing: 10.1. Establishment of total state control over foreign currency inflows and outflows – September 2023. 10.2. Nationalization of all financial institutions and termination of all money and capital market transactions and establishment of Awami Islami Tamveeli institute – January 2024 10.3. Start of issuance of national currency by DBA (September 2023) and its establishment as sole legal tender circulating in the economy – March 2025.

10.4. Issuance of currency plan and credit plan (June 2024) and the restructuring of all Awami Islami Tamveeli Institute operating according to the currency and credit Plans– December 2024. (Note that currency and credit planning should be undertaken on the basis of a medium term national production and investment economic plan for 2024-2027) 10.5. Establishment of mosque based community centers to serve as branches of the Awami Islami Tamveeli Institute to start immediately with the aim of covering the whole country by such branches by June 2027. There may be many practical difficulties in operationalizing these activities and timelines suggested are only tentative. DAIMG stands ready to participate in the process of addressing these practical difficulties. We recognize that our proposals are خلاف اولیٰand the Islamic ideal is the minimum involvement of the state in the free market. But the free market has been abolished by capitalist transaction forms and Afghanistan (like Iran) is an exceptional Islamic state existing in a global dar-al-harb. The state must be a key instrumentality for constructing and operating a Jihadi (not welfare) economy as a means for the flourishing of Islamic individuality and society at the mass level. Nevertheless, as Islamic individuality flourishes at the mass level – as the behavior of individuals reflects the realization that ma’ash is merely a means for achieving falah in ma\ad – and as the imperialist grip of global markets relaxes on the Afghan national economy, we recognize the need for moving towards the Islamic ideal. The Plan documents envisages both the preservation of a non- planned segment of the economy as well as the gradual withdrawal of planned intervention (in non- monopolizable economic sectors) as Islamic individuality takes roots at the mass level and as imperialist market dominance over the Afghan economy is reduced.