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WHEN TECH MEETS FAITH NAMIRA SAMIR

The world is layered with different forms of inequalities. The rich and the poor,
the haves and the have-nots, the educated and uneducated, healthy and malnourished.
One can at least try to imagine a place where everybody can lead the lives that are
worth living according to their own definitions and just be content. But then the alarm
starts ringing, and that was but a dream.

Just three decades ago, welfare economist Amartya Sen juxtaposed deprivation with
freedom. He narrates a beautiful proposition about what it takes to be free to pursue
the life one desires. Since then, the efforts to fight global poverty has been shifted
slightly to a more nuanced understanding of wellbeing.

At the international level, the World Bank is using US$1.90 a day to measure progress
of poverty eradication. But can one really survive with US$1.90 a day? Yet the World
Data Lab shows that as of today, around 580 million people must survive with a
daily income below that threshold. According to United Nations’s Multidimensional
Poverty Index (MPI), over a billion people are living without enough income, nutrition,
education, and are consequently less healthy than the rest of the population. As of
2018, it is estimated that 1.3 billion people were living in multidimensional poverty. An
even scarier figure! Without meeting these basic needs, how can they live a meaningful,
purposeful live? How can everyone have the same power over what they can do with
their lives? And whose responsibility is it?

Revisiting the Oxfam figure in 2019 where 26 billionaires owned as much as the poorest
50%, it raises a query about the transferability of wealth and the limit of desires. What
is it that attracts people to wealth and what is holding them from gaining an even larger
control over wealth? If one understands that wealth should be shared and not to be
held in its entirety, then we would not be talking about ending poverty, because the problem would never have existed in the first place. So, what kind of stop signs do we need if we were to control desires?

The heart exists not solely as an organ pumping blood. It
carries a special function that is rarely used; to determine
what is right or wrong. Consider a hypothetical scenario. A
businesswoman is looking to expand her business outlet,
which is already making billions of dollars. Deep down, the
heart might tell her that it’s time to stop; and that she should
be focusing on sustaining the current outlet without further
expansion. But she still chooses the latter because the heart
is just a hollow existence if there’s no faith over what it says.

If faith is what we need to tackle the world’s biggest problem, shouldn’t it exist in our every activities?

In Muslim-majority countries, Islamic finance emerged as the
answer to the bad harvest of capitalism. In Islamic finance,
faith essentially underpines every transaction and economic
activities. Faith that all the things in this life have its limit
and that wealth should be shared, and justice should be
manifested into every economic activity.

Islamic finance consists of two branches; commercial
and social finance. Islamic social finance has made some
incredible contributions to human development and was
even acknowledged by the United Nations and The World
Bank as a potential solution to end poverty and tackle
inequality. Sadly, the same spirit and results are not visible
in the Islamic commercial finance, which consists of banking
and capital markets.

Faith in creating a just economy is suppressed by the lack of
understanding of the true values of Islamic finance. Likewise,
the complexity of contracts used in Islamic finance only
adds to the fees and consequently, made Islamic finance a
lavish mode of financing. The industry’s attractiveness also
encourages new entrance of players that are benefitting
from the fame without fully conforming to the Islamic
finance principles. For Islamic finance to serve its purpose
as a catalyst of faith-based impacts, it needs to find a way
to reform; and that might be through adding technology into
the bargain.

Digital disruption is happening in almost every industry,
including the business and financial sectors. The depth of
control that technology has and will continue to possess
over our lives is indescribable. If that’s already happening
and will persist for a very long time, shouldn’t Islamic finance
adapt to this changing world?

Still, the recurring reality surrounding the early stages of new
technologies is the tendency of making false inference. False
inference occurs when only a few people understand what it means, and the impact it could create, and when only a few are talking to each other and not to those who do not speak
the same language. Even worse, the rise of new technology
elevates conflict between those who want to stay in the
present and those who are preparing for the future.

It seems as if the lack of faith in new technology stems from
its high level of uncertainty. The popular invention known as
blockchain is no exception in this case. Although blockchain
guarantees transparency and efficiency of transactions, it
uses cryptocurrencies, which are unreasonably volatile and
makes blockchain a media of gamblers. Some may say it akins
to buying shares without guarantee of real assets.

The Matthew-effect can also be observed in both blockchain
and Fintech. Although both brings efficiency and gives the
unbankable access to finance, the largest shareholders of
the impact are those who already hold so much wealth. The
poor, for most part, remain in their old seats as an immortal
recipient of welfare or charities.

Technology is supposed to create a better future for all,
and not just for the privileged few. The flaw of blockchain
highlights that truth is not the only thing that matters. If the
truth does not bring any good, there is a need to find a positive,
better truth. Not that we need falseness, that’s just again,
a false inference. But we need a better truth. If blockchain
helps efficiency and transparency but uses a volatile, risky
mode of transaction; we need to integrate blockchain with an
instrument that ensures justice and promotes equality.

While Islamic finance is a sound financial mechanism that
lacks efficiency, blockchain is an emerging technology that
is inherently faithless. When Islamic finance and blockchain
converge, it becomes a beautiful firework of empowerment.
Businesses that are transacting through blockchain
technology can use Islamic finance to execute contracts or
transactions between parties that use Islamic cryptocurrency
backed with real assets or a digitalised state currency that are
secure and not volatile.

With the innate justice nature of Islamic finance, every
transaction aims for socio-economic justice. The marriage
between blockchain and Islamic finance creates promising
engineering of wealth redistribution with enhanced
efficiency, and thus allowing borderless solidarity between
people across the globe.

As Joseph Stiglitz pronounced, development of any kind is
about transforming the lives of people, not just transforming
economies. What would linking technology and faith bring to
this apparently unequal world we live in? Well, we better find
out, as it’s going to be phenomenal.

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