Critical Perspectives on Sustainable Development Goals: An Alluring Benchmark for Islamic Finance Objectives in Post-Development Era

Yılmaz İ.

II. INTERNATIONAL SYMPOSIUM ON ECONOMIC THOUGHT, Kocaeli, Turkey, 22 - 24 May 2021, pp.62-65

  • Publication Type: Conference Paper / Summary Text
  • City: Kocaeli
  • Country: Turkey
  • Page Numbers: pp.62-65


As a multifaceted concept embodying micro to macro dimensions of social, political, cultural and economic spheres, development has become a global objective to achieve in contemporary societies. No matter a serious evaluation of its rise, connotations and implications upon a socially constructed environment, both national and international economic policies are invariably designed for maximising development. However, beyond assuming it as a universal fact, shedding light on development discourse evidences that the prevailing notion of development is in fact a strong hegemonic power of Western ideology. Development as the ideological apparatus is characterised as Eurocentric, universalist, market-oriented understanding, which is built upon Western industrialisation experience that ignores cultural and historical contexts of societies. Despite objections towards the idea of development, 21st century is celebrated as the age of development. Together with its significant rise in the aftermath of the Second World War, some international institutions maintain the role of exalting development as the prerequisite for prosperity and welfare in social level. In that manner, basic needs strategy in the 1970s, Millenium Development Goals (MDGs) between 2000 and 2015, and Sustainable Development Goals (SDGs) in the post-2015 development agenda are all envisaged to guide developing nations on their path to development. Today, let alone it as a contested concept and even as an oxymoron, mainstream economics consider the socially constructed idea of development as the ultimate purpose for each nation, or the end of history. In the eyes of developing nations, the ideology of development seems convincing enough to adopt and apply over social and economic policies. Once the decolonisation period is considered, development gains special importance as the old legacies of colonised societies need to be replaced with an authentic developmentalist agenda. This is explicitly pointed out in President Harry Truman’s declaration in 1949, wherein old imperialism gives way to a program of development in disguise of democratisation. While the Western ideology of development is strong enough to rule the entire socioeconomic system, alternative approaches towards development emerged in the last century. Amongst them, approached with a paradigmatic distinction, development is considered by Islamic economic understanding as an issue of worldview shaped by ontological premises. This study, hence, aims to introduce an Islamic economic development model that requires paradigmatic shift in the prevailing conceptions of Western development. Islamic economics and finance emerged as a post-colonial counterhegemonic attempt to develop a new economic paradigm based on Islamic normative principles and substantive morality, which could address the observed developmentalist failures of Muslim societies in a period where old colonial legacies had remained overwhelmingly shaping socioeconomic institutions in decolonized Muslim lands. It, hence, aimed at redefining the meaning and function of human agency, land, labour and capital as well as the extended stakeholders in the Islamic social framework to generate a participatory and sharing economy. In doing so, Islamic economics is envisaged to eliminate the dependence upon capitalist formation of economic life and help to construct a new social formation of Muslim societies, beyond only economics and finance as single projects, in the light of Islamic ontology and epistemology. In parallel with the normative aspects, Islamic finance and banking institutions were established as a peculiar mode of finance which is motivated by a religious concern of facilitating an alternative financial system that is constructed by Islamic principles, values and norms. According to such a construct, Islamic financial institutions (IFIs), therefore, are envisaged to circumvent social imbalance triggered by interest issue and generate particular modes of production by positing ‘profit and loss sharing’ and ‘risk-sharing’ operations of financing within the umbrella of ‘sharing and participative’ nature of Islamic moral economy paradigm through redefining capital through the Islamic financial prohibitions and screenings. As can be easily noticed, the aspirations of Islamic finance are strongly developmentalist in its authentic sense beyond connotations of established understanding of Western development. However, once the practical applications are reckoned, Islamic finance aspires to diverge from the authentic approach of Islamic economics towards development, but rather it converges towards the Western model of development. This is evident in the accumulating academic studies of Islamic finance that gives much weight on sustainability issues in economic and financial area. There is an ever-increasing literature on the nexus between Islamic finance and its compatibility to the SGDs. These studies implicitly assert that the recently discovered goals of the United Nations Development Program (UNDP), especially those on environment, gender equality and education, are already embedded in the Islamic ethical principles. Therefore, what UNDP announced is, indirectly, the confirmation of the universality of Islamic ethical principles, which can be applicable to every society regardless of race and ethnicity. Once this argument is taken for granted, SGDs become the ultimate benchmark for Islamic financial institutions. However, if degrowth and post-developmentalist discourse is taken into account, the unquestioned coupling of SGDs and Islamic finance becomes a contested issue. This study aims to develop a critical discourse analysis on the nexus between Islamic finance and sustainable development literature from a post-developmentalist approach. In particular, it aims to explore the existing understanding of Western development, and critically approach on the attempts of coupling Islamic financial principles with SGDs. Based on a discursive approach, this study evaluates sustainable development from the lens of post-development. By doing so, it introduces a comparative analysis on Islamic ethical principles and the inherent ethics behind sustainable development goals so that the convergence of Islamic finance towards neoliberal economic thought and the social failure of Islamic banking and finance can be explored from a broader perspective.