Religion and economic development<\/p>\n
Muhamad Ali, Lecturer, The State Islamic University
\n(UIN) Sharif Hidayatullah, Jakarta<\/p>\n
The New York Times recently reported about two Harvard
\nscholars who found that religion is not an impediment to economic
\ndevelopment, after analyzing data collected in 59 countries
\nbetween 1981 and 1999.<\/p>\n
\"Our central perspective is that religion affects outcomes
\nmainly by fostering religious beliefs and individual traits such
\nas honesty, work ethic, thrift and openness to strangers,\" the
\ntwo researchers, Robert J. Barro and Rachel M.McCleary, said.
\n\"For example, beliefs in heaven and hell might affect those
\ntraits by creating perceived rewards and punishments that relate
\nto 'good' and 'bad' lifetime behavior.\"<\/p>\n
The data included attendance at places of worship and
\nreligious beliefs and measures of economic development, including
\nper capita gross domestic product, educational attainment by
\nadults, the urbanization rate and life expectancy.<\/p>\n
The finding are not very surprising because scholars like Max
\nWeber and Maxime Rodinson, in their books The Protestant Ethic
\nand the Spirit of Capitalism and Islam and Capitalism,
\nrespectively, have argued for the connection between religion and
\neconomic development. But this most recent study by Barro and
\nMcCleary is based on a sophisticated analysis of a huge set of
\ndata and seems more convincing.<\/p>\n
My own library research on Islam and economic development
\nduring the New Order era also suggests such a connection. Then
\npresident Soeharto attempted to accommodate Muslims in his
\ndevelopment ideology through Pancasila, instead of capitalism and
\nsocialism, and interestingly Muslim intellectuals and
\ninstitutions did not resist such appropriation.<\/p>\n
Government officials used religious festivals as a forum for
\nconveying their development messages and the Muslim society at
\nlarge showed its support in speeches and publications that linked
\nIslam and development.<\/p>\n
Muhammadiyah and Nahdlatul Ulama (NU), the two largest Muslim
\norganizations, for example, have long had their own economic
\ninitiatives, even if they were not very sophisticated, such as
\nalms giving, endowments and setting up local cooperatives to
\nprevent economic exploitation. More recently both organizations
\nestablished People's Credit Banks and have supported local
\nexport-import activities.<\/p>\n
Interestingly, religious differences have not prevented
\nMuslims from doing business with non-Muslims such as the ethnic
\nChinese and foreign companies. For example, Muhammadiyah has
\ncooperated with Bank Central Asia (BCA) and a life insurance
\ncompany, while the NU has created a joint venture with other
\ncompanies.<\/p>\n
Why have Muslims encouraged themselves to do business? For
\nMuslims, economic activities are part of human social
\ninteractions (muamalat). As the Prophet Muhammad and his wife
\nwere traders, Islamic doctrines are interpreted as motivating
\nhard work and honesty.<\/p>\n
Muslims also believe that God created the earth and everything
\non it not to be destroyed but to be managed properly for the best
\nbenefits of humankind. Yet development and modernization have
\ncarried with them environmental destruction and moral decadence,
\nsuch as individualism and excessive materialism. Islam serves as
\na controlling and balancing power.<\/p>\n
While agreeing on values, Muslims differ in systems and
\nstrategies. Only recently (i.e. the 1970s) did Muslims disagree
\non the issue of an interest-based banking system. Some interpret
\nthe Koranic riba as not merely usury but also interest. Some are
\nestablishing what they call Islamic economics, deriving from
\nWestern economic principles plus Islamic values.<\/p>\n
Many still believe that interest is not un-Islamic because it
\nsimply represents a transaction fee and is used for productive
\npurposes. In any case, both \"Islamized\" and conventional banking
\nsystems coexist and engage in healthy competition.<\/p>\n
Do the above research findings represent a criticism of the
\nsecularization thesis -- the idea that a country becomes more
\nsecular as it becomes richer and more industrialized? This is a
\ncontroversial issue and has different answers from different
\nperspectives. What makes sense to me might be the following.<\/p>\n
First, in any period of history, religion has never been
\nmerely a private matter, although many have attempted to push
\nreligion into such a direction.<\/p>\n
It is hard to make a generalization about whether or not
\nreligion becomes more and more privatized or religion becomes
\nincreasingly public. It depends on the perspective. My own view
\nis that if religion should turn to the public across religious
\nboundaries, it is not its exclusive characteristics but its
\ninclusive, tolerant and more universalized values such as justice
\nand peace that come to be emphasized.<\/p>\n
Second, religion is often if not always connected with other
\naspects of life. It is difficult for many to create clear
\nboundaries between what is religious and what is not religious.
\nIt is thus quite plausible to consider what Prof. Paola Sapienza
\nsaid, \"are you picking up religion or something that correlates
\nwith it, like certain laws or social and economic institutions\".
\nIn other words, social and cultural circumstances may have
\naffected economic behavior the same as religious belief may have.<\/p>\n
Third, doctrinally, religion (including Islam) and capitalism
\nare not incompatible. However, if Islam and capitalism are not
\nincompatible, would that logic also mean that Islam and socialism
\nare not incompatible?<\/p>\n
In my view, the relationship between religion and ideologies
\ncannot be regarded in an idealist ahistorical way. The connection
\ncan only be made in relation to a particular agency in a
\nparticular time and space. Whether or not religion and economic
\ndevelopment are actually related, there are many who wish to
\nassert that they are in fact related, but there are also others
\nwho do not wish to assert such a connection.<\/p>\n
Therefore, the connection that exists, or is believed to exist
\nbetween religion and economic development is mediated by cultural
\nprinciples. It should also be recognized that the nature of the
\ncausal process linking religion and economic development is
\ncomplex, multifaceted and varies from situation to situation. It
\ninvolves more general questions of ideology, political
\norganization and the structural properties of the social system
\nwithin which religion is embedded.<\/p>\n
The last point demands particular attention as the
\nMuhammadiyah, the NU and other religious organizations have been
\npromoting an \"anti-bad\" political movement. Why can't religion
\nprevent its adherents from bad economic practices such as
\ncorruption and collusion? This question should be primarily
\nanswered by the people themselves who claim to be religious but
\ncommit social sins. But one thing seems to be indisputable: no
\nreligion justifies activities that are harmful to others, both
\nhumankind or the environment.<\/p>\n
The writer is a PhD candidate at the University of Hawaii at
\nManoa and a fellow at the East-West Center in Hawaii.<\/p>",
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