Economic uncertainties rather than lessening after October 10 elections have deepened further as more Pakistanis seem to have voted against rather than for ‘continuity’.

Though the MMA which has swept one whole province, attained the majority in another and emerged as the third largest group in the National Assembly has taken great care so far not to do or say anything that would rock the economic boat of the country immediately, its leadership is likely to find it increasingly difficult in the coming weeks and months, especially after power is transferred finally to the parliament to resist voicing rather more stridently its 55 year-old demand to Islamise the economy.

At best perhaps it would concede to send all economic laws in the country to the Council of Islamic Ideology and at the same time it is also likely to insist on getting from the government a time-table for implementing the recommendations of the CII. But if anybody believes that they could be taken for a ride once again like in the past and get the matter consigned for ever to commissions, committees and courts, they are sadly mistaken.

During the Zia period, the then economic wizard in attendance, Mr. Ghulam Ishaq Khan, had dissuaded his President from bringing the economy as well under the purview of the CII and Shariat Court— a handiwork of General Zia, was also kept out of the debate on Riba. In order to appease the strong Islamic constituency of President Zia which was demanding immediate discontinuation of Riba, GIK removed the nomenclature of ‘interest’ from the banking system and replaced it with the term ‘profit and loss’ and then he also introduced a number of so- called Islamic financial instruments which were in fact secular instruments carrying Arabic titles.

However, the international investors remained rather wary of the whole debate on Riba during this period and forced Pakistan to agree to sign the Hubco Power Plant agreement, the biggest foreign investment agreement till then under the British law. Things began to ease up after the 1988 elections and as the clout of the religious elements started disappearing because of the very insignificant representation of these elements in the Parliament, the Riba debate lost its voice. But in the second Nawaz Sharif government during which the Shariat Bill was all but passed, the religious elements found themselves back in an influential position through Abaji and the Supreme Court understandably upheld the Shariat Court verdict on Riba and gave a short time-table for the implementation of the latter’s ruling in full.

By the time the given time-table was half way through Musharraf had walked in and for at least a year or so his financial wizards kept re-assuring the nation that the military government would keep to the deadline allowed by the Supreme Court for the introduction of Riba-free economy. The Supreme Court’s Shariat Appellate Bench on June 24, 2002 reviewed its earlier judgment in which it had directed the government to eliminate Riba from the economy by July 30, 2002, and remanded the case back to Federal Shariat Court for fresh decision. And the government thought that was that.

But since October 10, things have taken a turn again in favour of forces which believe that Riba should be eliminated at the earliest and that this would not make Pakistan a financial pariah in the world. Thanks to the muddle-headed political strategies and tactics put together (to keep the PML(N) and the PPP from sweeping the polls), by Musharraf’s Principal Secretary Tariq Aziz and Musharraf’s political man in the ISI Major General Ihtasham Jaffery, the religious elements have found it easy to enter the Parliament in more than adequate strength.

Leaders like Qazi Hussain Ahmad and Liaqat Baloch of the Jamat-i-Islami, Maulana Fazlur Rehman and Hafiz Hussain Ahmad of the JUI (F), Maulana Samiul Haq of JUI(S) and even Shah Ahmad Noorani of JUP have all worked with the so-called moderate Muslims all these years in and out of the assemblies and some of these religious stalwarts have also been part of previous governments at one time or the other. The parties of all these leaders i.e, JI, JUP and JUI, have put their signatures on the original 1973 constitution which in most part was not to their liking but they went with it because the late Mr Bhutto succumbing to their pressure and as a trade-off for getting their endorsement for the Constitution had introduced a constitutional body, namely the CII which was given the task of Islamizing all laws within ten years.

In 1992,the Federal Shariat Court had declared that about four dozens laws, allowing interest based banking, were un-Islamic.

The Shariat Appellate Bench of the Supreme Court on December 23,1999, had upheld the FSC verdict after keeping the government appeals pending for seven years.The court had set the deadline of June 30,2001 for the implementation of the judgment.

The deadline, however, was extended till June 30, 2002 by the Supreme Court when it expired in 2001.

The Federal Shariat Court headed by Chief Justice (Retd) Tanzilur Rehman had shaken the banking system of the country in 1992 by declaring that interest-based banking system was un-Islamic. The FSC had ruled that interest was Riba and, according to Islamic injunctions, it was forbidden.

The then government headed by Mian Nawaz Sharif had gone into appeal against the FSC judgment despite the fact that it was under great pressure from the religious parties which were allied of the government.

The Shariat Appellate Bench of the Supreme Court on December 23,1999, had upheld the judgment of FST, and directed the government to transform the whole economy of the country to Shariah principles by eliminating all forms of interest-based banking.

The Shariat Appellate Bench of the Supreme Court in its judgment had held that “any amount big or small, over the principal, in a contract of loan or debt is Riba, prohibited by the Holy Quran, regardless of whether the loan is taken for the purpose of consumption or some productive activity.”

The present government had sought complete reversal of the judgment which was delivered by Federal Shariat Court in 1992, declaring all forms of interest-based banking as un-Islamic.

However, in the light of the October 10 election result we must go back to the proceedings of the case which started on June 6 and ended on June 24 this year and recount what the lawyers representing the religious elements had said while arguing their case against any reversal of the Shriat Court judgment of December 23, 1999.

But first let us see what happened on June 6 when the proceedings started.

Dawn reported on June 7 that on June 6 the Supreme Court started hearing of the UBL’s review petition seeking reversal of the Riba judgment amid unruly scenes in the court room by the religious elements, prompting the court to issue warning it might order for closed-door proceedings.

During the course of proceedings when the government counsel quoted from the Holy Quran, objections were raised that he was not able to recite the Holy Quran in proper accent, which was a crime and they would not permit it. Later, however, a method was evolved that the recitation from the Holy Quran would be made by a Maulana and he would only read translation.

When the court, reassembled after the break, Advocate Raja Akram and Raza Kazim, counsel for the federation, complained that threats were hurled to them during the break as the religious elements present in the court wanted to control their proceedings.

Advocate Ismail Qureshi, representing the Jamat-i-Islami, while arguing his party’s position on the matter had said: “Haq (Truth), and Batil, (Evil) cannot co-exist.” He said that the Supreme Court should not provide any more time or modify the earlier judgment.

He said that Pakistan was created as an ideological state and Islamisation process should not be impeded on any pretext. He said that all forms of Riba was haram and there was no such thing as makrooh riba. He also referred to OIC resolution, urging the member countries to introduce interest-free bank.

The government itself, the counsel stated, had asked the court to provide guidelines which it obliged, and now it was mandatory for the government to implement it. He said that the statement of the government, that implementation of the judgment was not possible, was “shameful and dangerous”.

The counsel claimed that the IMF was of the view that interest-free banking was a viable option. He said that two world wars were the results of interest-based capitalist system.

Advocate Ismail Qureshi said that views of Al-Azhar scholars, quoted by the government counsel Dr Riazul Hasan Gillani, should not be accepted as those were the scholars who had approved the use of contraceptives and held seminars on the use of condoms.

The counsel said all ulemas were unanimous in their views that any amount, big or small, over the principal, in a contract of loan or debt was Riba, prohibited by the Holy Quran, regardless of whether the loan was taken for the purpose of consumption or some productive activity.

He said that it was the decision of Tafseer-e-Masoora. When the court asked him who was the author of the Tafseer-e-Masoora and which printing house had published it, the counsel said that it was not the name of any book but an unspecified number of books on the subjects were called Tafseer-e-Masoora.

The counsel stated that the Supreme Court’s Shariat Appellate Bench had complete jurisdiction to decide the case. The counsel stated that modarba was true Islamic banking mode.

He stated that what was Makrooh (undesirable) was also prohibited in the Islamic state and quoted Imam Abu Hanifa that Makrooh also fell into the category of haram.

The counsel further stated that the Shariat Appellate bench had invited prominent jurists, bankers of international repute before delivering the judgment, and it should not be reviewed on the filing of affidavits by two bureaucrats, the secretary finance, government of Pakistan and the deputy governor, State Bank of Pakistan.

The counsel stated that government lawyers, relied heavily on the writing of Sir Syed Ahmad Khan in support of their contentions. The counsel said that he would establish that ulemas of the time did not recognise Sir Syed Ahmad as religious scholar and his interpretation of Quran and Sunnah were defective.

He said the government counsels were unable to fathom the sublimity of the Holy Quran and were attempting to interpret with their worldly knowledge.

The court asked him to explain whether the increase charged on the principal amount was riba or not, the counsel said it was riba. He further stated that it could not be believed that money was only borrowed in Arabia for consumption purposes before the advent of Islam. He said that Mecca was trade centre from where the traders were going from Syria to China.

The counsel stated that people of Mecca and Madina were affluent and they did not need loans for consumption purposes. All the loans extended were for commercial purposes, he stated.

The counsel argued that it was not correct that increase on the principal was prohibited in the cases of needy persons. He said it was not correct that only that increase which contained the element of exploitation was riba.

Advocate Khizar Hayat, another counsel of Jamma-i-Islami stated that Riba judgment was not covered by Muslim personal law and the court had the jurisdiction to decide it. The counsel stated that SC judgment had covered all the aspects and it must not be reviewed.

Engineer Saleemullah, member of Jamit-e-Ulam-e-Pakistan (Niazi), stated that the petition was incompetently filed and needed immediate dismissal. He said that he was not aware who authorised them to file the petition, as President Pervez Musharraf had promised to implement the judgment when he had given him presentation of over three hours. He said an implementation committee was formed of which he was member.

Engineer Saleemullah said it was wrong that the Holy Quran did not provide any definition of Riba. He said Riba was “haram” and “bai” was “halal”. He said there was no difference of opinion among different schools of thought and it was the established principle if there was any difference of opinion, the juristic opinion of Imam Abu Hanifa would prevail. He further stated that parliament was not competent to do Ijmah as it was the domain of muftis of Ummah.

Dealing with practical aspects of Riba, he said that the statement of the government that if present system was transformed to Islamic mode of banking, the economy would collapse, was misplaced. He said the present situation of Pakistan’s economy was the direct result of interest-based borrowing.He said that from 1947 to 1971 Pakistan never borrowed and there was no deficit financing. He said that Pakistan’s five rupees were equivalent to one US dollar in that period. He said that the rupee-dollar parity of 5:1 was sustained for 25 years.

Engineer Saleemullah argued that Western economies were running on two per cent interest rate. He said that lower interest rate helped the western countries to control ever rising inflation.

He said that the United Stated operated its economy on two percent interest from 1942 to 1958. He said that Jews of the world, through international lending agencies, earn US $ 2000 billion from the third world countries..

He said that Pakistan’s total capital volume was only Rs 3000 billion out of which 1000 billion constituted interest. He said that if the economy was transformed to Shariat-compliant instrument suggested by the court, the government would save Rs 1000 billion. He said the government was paying Rs 2.5 billion in the form of interest.

The present government has sought complete reversal of the judgment which was delivered by the Federal Shariat Court in 1992, declaring all forms of interest-based banking as un-Islamic.

The Shariat Appellate Bench of the Supreme Court on December 23,1999, upheld the judgment of FST, and directed the government to transform the whole economy of the country to Shariah principles by eliminating all forms of interest-based banking.

All this is likely to be reopened immediately following the transfer of power to the Parliament. And once the Riba debate is resumed, it is more likely than not that foreign investor would go back into a wait-and-watch mood and the trickle of foreign investment which had begun in the last six months or so would once again dry up. And perhaps even the flows of foreign remittances would slow down.