Islamic Financial and Socioeconomic Institutions in Malaysia: Examining Viability of the Interactive World View

Abstract

Malaysia has been driven by its national declaration (Rukunegara) towards simultaneously attaining a semblance of economic growth and distributive equity through its development plan. In this, two national programmes have played a key role. First, the New Economic Policy (1970–90) served to attain the principles of Rukunegara by combatting poverty and promoting economic restructuring. Second, the current New Development Policy (NDP) aims at instilling ethical values into the Malaysian development process. Here the targets of economic growth and distributive equity are found to complement each other in the sense that both can be achieved simultaneously and not by means of substitution, as in the neoclassical economic system. Such a complementarity of goals lies at the heart of the methodology of Islamic political economy.