Progress and Challenges of Islamic Economics and Finance in the Contemporary Malay World

Abstract

This article describes the progress and challenges of Islamic economics and finance in Malaysia and Brunei Darussalam. Islamic economics can be defined as the system of economic knowledge that Islamic economics thinkers established based on Islamic teachings, while Islamic finance refers to financial services adhering to Shari'a (Islamic law). The Islamic financial industry has developed predominantly in Malaysia and Brunei Darussalam over the past four decades. There are some criticisms of Islamic financial services in terms of their Shari'a compliance. By tracing the development of Islamic finance in the contemporary Malay world, this article shows what the ideal method of Islamic financial services has been and why and how the practice has faced criticism.