Pandemic Crisis, Digitalization and Social Responsibility: An Emerging Role of Islamic Economics and Finance

Abstract

Islamic economics and finance is embedded with ethical and moral values as the lex loci applicable to it which is Shariah is an ethical and moral religion. Though the institutionalisation of Islamic economics and finance began recently, the axioms of Islamic economics and finance are derived since the inception of Islam. The issues in conventional economics and finance like the “bubble burst” are practically experienced every time a financial crisis is faced by humankind and the search and adoption of an alternative economics and finance system is assumed at these times more than ever. Covid-19 pandemic is a black swan event that began as a health crisis but eventually led to a human crisis that also brought an economic crisis to the world. There are numerous lessons learnt from this crisis in the way which the future economics and finance landscape need to be sculpted. Islamic economics and finance which is evolving around the notion of Shariah compliance also need to be redefined in the light of the pandemic. As such, this is an exploratory research which is conducted to find out the ways in which the scope of Islamic economics and finance could be redefined in the light of the pandemic considering the impact it has made on Islamic economics and finance. It is found that the impact of the pandemic on three main dimension needs to be assessed in this regard: that is from the perspective of the customers, institutions and economies including the society in which the Islamic economics and finance services and products are offered. This paper recommends that there is a need to redefine the scope of Islamic economics and finance in the light of the effects of pandemic by converging digitalization and social responsibility in the implementation of it. It is anticipated that the findings of this research will assist the key stakeholders of Islamic economics and finance such as policy makers, academicians, researchers and practitioners to shape the future of Islamic economics and finance that would be aligned more towards achieving maqasid al-Shariah (objectives of Islamic law), rather than merely rotating around the notion of Shariah compliance in isolation.