EXPORT AND “BROADER MUSLIM WORLD” FOR “END POVERTY”

Ismail Yurdakok

ismailyurdakok@gmail.com

The Prophet Muhammad (Pbuh) frequently used to say : “O my God ! I seek (take)
refuge in You from sedition of wickedness of richness and wickedness of poverty.”
(Bukhari, K. Daawaat)

“End Poverty In California (EPIC)” was Upton Sinclair’s socialist reformer

movement in 1930s. Communism and Capitalism could not solve the problem of poverty
in 20th century. The problem is still the most important problem of humanity. In
their long brilliant centuries muslims had solved this problem. But in last two
hundred years the good economic structure of Muslims was destroyed by external
(and sometimes internal) powers. Islamic economy was a dynamic economy that the
Prophet Muhammad Pbuh used to say every day: “O my God ! I seek (take) refuge in
You from laziness” (Bukhari, K. Daawat); there was not a monastic life in Islam
(Bukhari, K, Nikah); companions of the Prophet Muhammad as Muslim immigrants were
in the market place of Madina to do trading even in the next day; famous
companions Abubaker RA was a tradesman,Umar RA was busy with animal husbandry,
Uthman RA was a big boss that he used to import and export, Abdurrahman RA was
busy with diary products. A companion asked a question to the Prophet Muhammad
(Pbuh) and the Prophet had replied: “To be busy with worldly
affairs/trading/business is not hypocracy” (Muslim, K. Tawbah)

From a different aspect: Muslims take the knowledge from every sources, in a
statement of the Prophet: “al-Hikmatu (every kind of knowledge) is the lost
property of a muslim that’s why a muslim takes it (immediately) when he/she finds
it .” Muslims have not avoided to take the knowledge from non-muslim sources in
their long history. From this point:

There are lessons for us in the two famous developments of the 20th century:
Ludwig Erhard, the father of Germany development had said: “To do export at
whatever costs; if we do not go in this path (as if) we would be sentenced to
death.” Japanese were saying in 1950s “export, more export”, “export for healthy
life of society”. With a good effort, Turkey’s exports in last 12 months reached $
billion (increased 32 % in last year). Turkish exporters,now (in the year of
2005), do not avoid to invest the export projects because they have seen “export
brings money”.

Broader Muslim World For More Export: In 1950s, U. States was proud of her
economic system with these sentences: “In many parts of Europe a traveler is
annoyed every few hundred miles at a national boundary. But he can travel
throughout the fifty states of U.S without delay, without a passport, and without
inspection or taxation of his luggage. If an American wants to sell automobiles or
other items in Europe, he must pay a high duty in each of several countries. In
our United States, the American dealer finds a public with a purchasing power far
superior to that of all of Europe, without a cent of tariff to pay, and free of
other discriminatory regulations. In short, the Commerce Clause has made for the
citizens of U.States the greatest unrestricted market in the world.” (1)

After 50 years, European countries established a similar system like USA (1-May-
2004, twenty-five states of EU). And “Broader Muslim World” also is a solution for
development of muslim countries. To abolish customs duties and trade barriers
among Islamic countries, muslim companies (and even small scale firms) will have a
huge (and greatest) market of a vast world (approximately a population of 1,5
billion).

In the especially first five centuries of Islamic history, muslims had been very
interested in foreign trade. ‘Large boats of Scandinavian traders’ were noted in
the books of IXth century muslim historians. On the other hand, Muslim traders had
been named as ‘musurman’ by Scandinavian peoples that they were visiting North
Europe cities in Xth century. Scandinavia-India highway of Medieval Ages was
crossing on the muslim lands. There were a lot of tradesmen from Scandinavia and
Baltic Sea in the Bulghar city of Idil. Muslim (traders of Central Asia and Iran)
and Northern Europe businessmen were meeting in the active business life of this
city, in XIth century. Fishbone, glue, armor and swords were presenting by
Scandinavian businessmen to the market in Bulghar city (today in the Tataristan
Republic of Russian Federation). Maurice Lombard had noted also Scandinavian
businessmen even had come to Baghdad in 9th century. Georg Jacop (1862-1937)
German orientalist had put Welche Handelsartikel bezogen die Araber Mittelalters
aus den nordisch-baltischen Landern ? 1886, 1891 that this study was about
commodity goods that Arabs had bought from north Baltic countries. And his
doctorate dissertation Der nordisch-baltische Handel der Araber im Mittelalter
(Leipzig 1887) he had investigated the trade relations of Arabs with northern
Baltic countries in medieval ages.

Before Mongol invasion on Central Asia and (Upper) Middle East, there were an
active economic activities from China-India to Northern Europe and to Middle East.
That is from Pasific and Indian Ocean to Baltic: Peace brought wealth to all
nations. Discrimination and clash of civilizations were absent a millennium ago.
Men were busy with their business.
Also for Ottoman period; distance was not a handicap for very good relations of
Sweden and Ottomans. The rulers and the peoples of two countries was looking a
great sympathy to each other.

From another viewpoint: in medieval ages, the basic principal of traditional

middle east economy was to supply (food and other demands). This principle
(provision) looks at economic actions from the viewpoint of consumer. Hence,the
aim of the economic action is to provide the needs of the community. For this
reason, produced goods/foods and services have to be -as far as possible- much,
plenty, qualified and cheap. In this economic policy that was established on the
principle of provision, the aim of the production was not export. Imports had to
be free as far as possible; because the plenty of imports used to supply
goods/foods abundantly. Importers/foreign tradesmen were entering to Arab/Islamic
cities easily with paying a low custom duties. These foreign tradesmen were
returning their countries after taking gold and silver coins or some products of
Middle East peoples.(2) (But) these long golden centuries lasted to the second
part of 19th century. This economic policy that Muslim countries followed in long
centuries, was an exact “anti-protectionist” policy and “laissez-faire theorists”
of the future centuries were not born at that centuries.

With the industry revolution, while some cities in the western world were becoming
“the Black Country” from the smoky air, on the other hand, the black days were
beginning in the Middle East.

Egyptian pioneer Islamic economist Ahmad Najjar says “when we look at the
history of developed countries, we see that these countries also in backwardness
(backward countries) like today’s underdeveloped countries. Per capita was highly
low and capital was weak. But they developed and progressed without foreign
investment though
some of them used foreign debts but these debts were grants (3). W.W.Rostow gives
details that: “in some countries, foreign capital was not imported: for example
United Kingdom and Japan in the process of “to start action”. But countries
like United States, Russia and Canada imported foreign capital in long years and
foreign capital played an essential role in this process(4). Rostow adds: “It is
necessary to realise these three conditions in the process of “start action”;

(1) the rate of production: investments should reach at least 10 % of national

income (GDP)

(2)“to establish one (or more) sector of manufactured goods”, this means
working/operating of agricultural productions or raw materials with modern
methods: timber in Sweden, meat in Australia, milk and cheese in Denmark. This
(one) sector makes start action for the other needings in modern sector, on the
other hand with this sector’s development supplies savings for taking industrial
products in foreign trade;

(3) “an administrative staff” that will use these savings, give continuity to this
development.

In the British economic development (1750-83) and in Russia (1861-90), Canada

(1868-90);

(1) with the development of transport (network inside) and foreign trade
(especially exports also developed
(2) a revolution in agricultural production began.(mentality changing in
agriculture is necessary in this period)
(3) new institutions was established that they gave proceeding to savings.
(4) new (type) tradesman and enterprising-industrialist class was born.

Ahmad Najjar gives three examples (three different kinds) for industrialisation
and development;

(1) there was not any state owned enterprises in western Europe countries in
the process of industrialisation (in G.Britain,Netherland,Germany and U.States and
Canada on the other side of Atlantic). Development and industrialisation were on
the shoulders of productive enterprisings.There was not also a (state’s) central
planning.

(2) (Communist) Soviet Unions prohibited the private sector, consumption was un-
der the control of the state, confiscated the means of production. In a short
time, great development was seen. Soviet Unions realised the industrialisation in
twenty years that
some European countries did these developments in a hundred years but at the end
this system was collapsed with murdered innocent of 50 millions.

(3) In Japan, the development policy was on the shoulders of the State that the
State
encouraged the tradesmen and farmers for industrialisation. And Japan State did
not assumed industrial actions, but with a proper tax policy and easy credits for
long and short term investments, encouraged competition and export. Najjar adds:
“we see two characteristics in developed countries: in widest meaning “savings”
and in widest meaning “production”(investment).

Najjar also puts a part in his study (38 years ago) about “savings ethics” and
ana-
lyses savings ethics (savings behaviours) he says “a person is not born with this
ethics, but he/she gains “savings ethics” with education and learning. Sometimes
later “Savings ethics” becomes a stimulus for this person and he/she gains
responsibility, dynamism, increase of will of work with this stimulus. Najjar
gives the example of the people of Mitgamr (in Egypt) that great changes occured
in the behaviours of this group after gaining of “savings ethics”.(6)

Umar Chapra (also a leading Islamist economist in last 40 years) mentiones the
subjects of “foreign capital”, “production for needings”, “supporting of small
scale and medium-scale enterprises” in last 20 pages of his book “Islam and
Economic Development”. Chapra says: “If there is a compulsary position and
absolute necessity and in the position of no alternativity, it is permitted to pay
interest to foreign investments.(Chapra gives as an example of eating pork of a
muslim if he/she can not find foods, if he is in the position of heavy hungry
(verse of Quran;Chapter of Baqara,v,173). But Chapra also indicates that muslim
countries should find out the inventory of their needs and sources and they should
put a real document of all of their human and physical sources. (7) My opinion is
(also) on the parallel of Chapra’s last sentences that Muslim countries can find
necessary money/funds for their investments without paying interest.

Chapra also points the importance of small and medium scale enterprises in the
industrial and economic life of underdeveloped countries that he says these
countries are in need of like a this small industry. In the countryside, small
scale industry is the most appropriate for job capacity of idle, inactive labor
power. This industry is also source of heavy industry and a complementary
instrument for it. Small scale industry also a secure sector against economic
crisis. There is a World Bank report indicates that in South America small scale
agricultural family enterprises are more productive 3-14 times than big farms.

Human Brain as the Most Valuable Natural Source. In this point we have to remember
Schumacher’s studies. He used to say: “the most valuable natural source is human
brain. We should protect it and develop it...but we take always material factors
and neglect sources like zeal of enterprise, imagination and brain power. (8)
Schumacher (died in 1977) worked (studied) with the engineering department of
Reading University of UK on the projects of small factories. He established
Intermediate Technology
Development Group Ltd. And they produced the projects of mini paper factory, mini
brick
factory. They built a small scale (flour) mill and with this kind of mill the
villagers earned
double. And they sold flour instead of selling wheat. Mini board of pressed chips
factory and in Sri Lanka they built a mini sugar factory. Schumacher worked in
Nigeria, India, Burma, Ghana, Zambia on this kind of projects. I think Islamic
Development Bank and Arab Academy for Sciences and Technology and other
institutions may demand/receive these studies from ITDG Ltd. for working/studying
on this (cheap) kind of investment. In Schumacher’s projects the cost (price) of
the investments had decreased even to 1 %.

In the early years of 1980s, M.Abdulmannan was pointing the capital surplus of
petroleum in the exporter of Arab countries and was saying: “this capital surplus
should be transformed to useful investments”(9).But today these rich countries
also have the problem of unemployment. Adam Smith was saying: “the wealth of a
nation depends on the degree of productivity of the country and productive labour.
Porter, as a child of “post-industrial” society, his analyses more purified and
more refined that he says the wealth (superiority) depends on the power of
competition and this power depends on “the ability of to innovate and upgrade” of
men of this country. Productivity is a fact that preponderates with the social
characteristics than individual. Porter says: “we have to give action (movement)
to local sources of competitive predominance to be ready/to resist to
international competition. Hirschmeier that he studied on “Japan experience” for
years, he points: “the most important mainstay for industrialisation is ‘will of
achievement’ and if we bring into action this “will”,necessary capital may been
gained from hidden sources and planner enterprisings with dense working of
energetic population the capital may been collected again (10).

Mustapha Ozel mentiones the early years of Japan’s development in the late 19th
century. “Target” and “Strong slogan” (motivation for investment). Japans began to
investigate the
mysteries of Western development, they went to Western countries to watch and
some of the trading journeys lasted two years to Europa and America. There were
200 notable men in the Iwakura Mission (1871-73) that they “explored” that the
power of western civilisation was in economics, industry and trading. The
superiority of westerners was in technology and was depending on trading and
organisation. Japon scholars put a slogan for development that “today’s
enterprising is yesterday’s samurai” (and then this changed to “modern businessman
is real warrior” after World War II). In long years after WWII, schools are open
on Saturdays in Japan (weekend was one day), summer holidays of schools was only
one month. Development (after war) was state-supported and between 1945-85 Japan
State designed the industry (and export) and supported in 40 years. (World
Conditions of the period were also appropriate for this support).

In the same period, the father of Germany development, Ludwig Erhard had declared
(an opposite development model that):

“No planning economy”. He was saying “to administrate the economic actions gives
harm to the organisation (state) that plans the free enterprise. All of the
harmful tests like planning are a sin that was committed to the life. Because
‘life’ means movement, action, vitality and development.” “We abolished all of the
decrees and regulations about economy that this action gave a possibility to
officers of economic departments of the state “throw the roll of decrees to
dustbin.” A lot of men were thinking to change these decrees but not wholly
abolishing; but we did this. We lifted all of the obstacles, bureaucracy on the
economics. And we decided) To do export at whatever costs, if we do not go in this
path we would be sentenced to death. We decreased the rate of taxes that’s why
buying power of the citizens increased. “State is like a referee” that the referee
does not participate the match and also the State has not got any place in the
economic actions. There was not any authority for the ministry of economy to
command to the owners of free enterprise. The ministry is free from now, a lot of
unnecessary/uselessly deeds like to give privelege, to stamp on the papers,
confirmation on the documents. In this new development period, we have to collect
all of (our) the great possibilities, and we should leave the interest of some
special groups. We should do cooperation and we should forget egoism. The aim of
the trading is to supply the needs of consumers”. “I do not believe that these
achievements is not a miracle. There is not any “German Miracle”. Achievements in
last ten years is not from a witchcraft of my policy that I followed but mere is
from the understanding and conduct of the individuals. The works that Germany did,
is uninterested with a miracle but this is the result of an effort that a nation
wanted to respect to principles of freedom, free enterprise and personal
energy(11).

Without forgetting the sentence of Erhard: “ to do export at whatever costs, if

we do not go in this path we would be sentenced to death”, now, we have to look at
the export policy in Japan’s development: The first government after the war began
to work in 1946. Weekends and holidays were absent. They were working seven days.
Working hours were very long. The finish-hour was not known.15 years; everybody
worked seven days every week.Furniture was absent in wooden houses. Per capita was
$ 162 in 1952, and it reached $ 694 in 1965. GDP reached $ 84 billion in 1965 and
they passed in 20 years (1945-65) Italy ($ 56 billion GDP in 1965) and Canada($ 48
billion),(France’s GDP in 1965 $ 94 billion, UK 98, West Germany 112, USA 676).
There was a big industrial production and a weak consumption. Simplicity of
Japans and tendency to savings: Japan family savings was 20% of their incomes.(12)

All of the investments begin with small steps. Citroén was the first in production
and trading in front-wheel cars in France; 2Cv was a modest model at the
beginning; 60 kilometres in an hour and it was designed to carry only two persons
and a parcel of potato. This model sold very much (per capita was very low in
France after the second world war). Renault 4cv (for four persons) was also a
small car and its selling was also successful. Japans began to produce Renault
under the licence of 4cv; but at the beginning they were not successful, some
parts of the cars were breakdown on the roads. They could not catch the quality.
But in 1970 they reached western countries in automotive industry. And they saw
there was an empty in small and medium size car market in U. States. The US
industry was not producing that kind of cars. After Japans produced that cars,
American costumers was very interested in new Japan cars because these cars were
running with fewer gasoline than majestic Dodge, Cadillac, Pontiac. There was
fixed thought in minds of Japans after the war: “export”; in the offices of MITI
(State Department for Encourageing of Industrialisation and Export),
administrative corridors of big companies, workshops, in everywhere: the same
word: “export” again “export” “more export” “export for wealthy life of the
society” “No imports,Yes exports”.(13)

Taiwan’s area was as much as Belgium and with 20 million population a small
country. But qualified labor power, management intelligence and competition
transformed Taiwan as a welfare state.(14)

In “The Process of Economic Growth” Rostow says: “Import of capital,doubtless, is

usefull but at the end,paying of (external) debts is necessary and this depends on
increasing
of exports. Increasing of agricultural production is necessary for the population
of growing cities and not to give the country’s foreign currency for the
foods”.Rostow adds: “Foreign trade was the important anad fresh source of
investment in the development process of developed countries.Growing economies
created “big export industries” from their natural sources.And rapid development
in exports was used for importing of capital equipment and for external debts in
the process of start action.(15)

History of Turkey’s Exports in Last Six Years. Turkey’s exports reached $ 132
billion in 2008. And in last 10 months of 2009 we see $ 78 billion (from economic
crisis of the world). But How Turkey became an exporter country that export power
of Turkey was very weak. The rising point began in 2002. The following sentences
that we had written in fall of 2004:
In this point we may look at a new good example from the region that Turkey’s
exports in last 12 months reached $ 51,5 billion dollars. From March 2003 to March
2004 Turkey’s exports increased 32 %. The new aim is to become all of the 81
provinces of Turkey as “exporter province”. From the 1984, in last 20 years
Turkey gave importance to export. Benefits of exports were explained to the
tradesmen and industrialists. ‘Export Companies’ : Encouraging helps were done to
the companies that they had got an export amount of $ 50 million at the early
years. Some taxes were given back to the exporters. Philosopy of export were
described in a lot of trading meetings in last 20 years. Aegean (Sea)exporters (in
western part of Turkey) did exports to 175 countries in 2002 and 187 countries in
2003. They said (last february in a press conference “there are 23 countries (from
210 countries of the world) in the world that we could not export any product that
we investigate to export to these countries and we hope our exports will reach to
200 countries in 2004”(16). Exports of jewellery products reached $ 800 million in
2003 and the target for the end of 2004 is $ 1 billion and the target of future
ten years is $ 10 billion. The minister of State (interested in exports) Kursad
Tuzman said “our aim is: ‘one person in every three (in the world) should wear
Turkish jewellery products’. Exports of traditional handwork carpets brought $ 500
million to the country (Iran is the first in this sector in the world with 36% of
World trade and Arab and African countries also may give importance to this sector
because of cheap investment). Zorlu Group took championship of Turkey in export
last year and Vestel Company (of this group) produced 20% of television imports of
Europe. This firm sold its televisions to 108 countries.

Everybody knows in Turkey that every product imported -in the value of $ 6500- is
the reason of “one person’s jobless”. That’s why export means “job”.A Turkish firm
began to produce ice cream in Japan, the other Turkish firm built a ready-made
clothes factory in Ozbakistan that this factory will make exports of $ 24 million
every year and this factory also gave job to 1500 persons. The famous Germany firm
“Grundig” (television) was bought by a Turkish firm and with a new design they
want to reach 9.6 % of European market in 2008. Kombassan Company opened a hyper
market in Sudan with an investment of $ 25,000,000 and other 70 Turkish firms now
are working in Sudan. Turkish Undersecratery of Foreign Trade is working now like
MITI of Japan for encouraging of export. This department determined a new market
for exporters: (even) Djibouti. The director of the dipartment said: “we are
encouraging small scale firms to enter Africa especially to east Africa.
Djibouti’s economy depends on transit trade wholly and Seaport Administration of
Dubai hired Djibouti Seaport for 20 years we want to use the benefits of this free
zone for entering east Africa and Comesa economic region that Comesa as a great
market with population of 300 million and 20 member countries.”

The export of ready-made clothes of Turkey reached $ 9.2 billion in 2002 and
$ 11.5 billion in 2003 and their target $ 34.8 billion in 2010. In the Cairo
International Textile Machines Fair (Feb.,2004) there were 58 Turkish firms. Some
Turkish firms want to be a megabrand in global export markets. Gentes company has
been setting up a fast food chain in Russia. Under the name of “Floraburger” they
have opened 7 fast food station in last 6 years in Russia. This firm is also
building Moscow State University, a shopping center ( a project of $ 42 million)
and 2500 Turkish workers are working in these yards. There are 5500 apiarists in
Mugla province (on the Mediterranian Sea) and they exported honey and earned $ 32
million. Goldas Jewellery will produce small gifts for British Chelsea Sports
Clup. Osse company is preparing 200,000 shirts (every shirt 8 euro) for United
Kingdom. Akdulger company is exporting armchairs for buses and small trucks, Has
Kalip exports door-hinges for luxury cars to U.States, Germany, Belgium. Kray
Furniture exports furnitures for offices and houses to European countries...export
products in different kinds. Turkish exporters have been accustomed to export and
loved this job. Turkish tradesmen and industrialists, now, do not avoid to invest
the export projects because they have seen “export brings money”.

Chief director of Al Baraka Turk (non-interest finance house) (late) Adnan

Buyukdeniz had said:
“It is said that (in 2003) there is a capital of $ 150 billion in the Arabian Gulf
that this capital is looking for a direction for going.”(17). “Investment for
Export” has to be pioneer opinion/aim to attract the Arab savings for investment
in (especially poor) muslim countries. “Philosophy of Export” should been
explained to the muslim peoples as ‘a solution for the problems of immigration and
unemployment’ and ‘unique way for development.’

(1)Magruder’s American Government(1961). p , 128. Allyn and Bacon, Inc. US.

(2)Genc Mehmet(1988-89). The Principles of the Opinions of Ottoman Economic World
(in the Sociology Review of Istanbul University , p, 175) Istanbul

(3) Najjar Ahmad(2003). Non-Interest Banks in Economy, Bank and Insurance in

Islamic Thought (in Turkish) (ed. and trs. Hayreddin Karaman), p, 82. Istanbul: İz
Yayincilik (İz Publications)

(4)Rostow W. W.(1999). The Process of Economic Growth (trs. into Turkish Erol
Gumgor) ,p, 60-72. Istanbul: Otuken Yayincilik

(5)Rostow,p,59

(6)Najjar,p,161

(7)Chapra Umar(2002). Islam and Economic Development(trs. into Turkish Adem Esen).
p, 167-87. Istanbul: Cantas Yayıncılık

(8)Schumacher E. F.(1999). Good Work(trs. into Turkish Murat Ciftkaya). p,14.

Istanbul: Iz Yayincilik

(9)Abdulmannan M.(1984). Necessary Seven Reasons for Believing in the Importance

of Islamic Economy.(trs into Turkish Ali Zengin). p, 20. Istanbul: Fikir yayınları

(10) Ozel Mustafa(1995). Iktisat, Siyaset ve Din (Economics, Politics and

Religion) p, 34. Istanbul: Yeni Safak

(11) Erhard Ludwig(1967). Welfare Share for Everybody (trs. into Turkish Vedad
Dicleli). p, 33, 69, 74, 79. Istanbul: Durum Yayınları

(12)Donnet, Pierre-Antoine(1992).Le Japon Achéte Le Monde (Japan Buys the World,

trs into Turkish Filiz Nayır Deniztekin). p, 43. Istanbul : Varlık Yayınları

(13)ibid, p, 59-61-71

(14)ibid, p, 78
(15)Rostow, p, 71

(16)(Daily) Dunya, Feb., 27, 2004

(17)(Daily) Dunya, July, 15, 2003