Invigorating The Human Factor (1/3)

Human beings constitute the living and indispensable element of any development programme. They constitute the end as well as the means of development, and unless they are reformed suitably to enable them to make a positive contribution to development and to keep their self-interest within the constraints of social well-being, nothing else can succeed in actualizing the basic objectives of Islam.

Hence, the most challenging task before Muslim countries is to motivate the human factor to do all that is necessary in the interest of development with justice. Individuals must be willing to render their best by working hard and efficiently with integrity, conscientiousness and discipline, and to make the sacrifices necessary to overcome obstacles in the path of development.

They must also be willing to change their consumption; saving and investment behaviour in conformity with what is required to raise the rate of growth with greater equity and lower imbalances.

Motivation alone is, however, not sufficient to get the best out of human beings. They must also have the ability to use better technology and management methods. This requires proper training and access to finance.

Unless an adequate arrangement is made for both, motivation alone may not be able to take the economic system far in realizing the optimum potential of the human factor.

Motivation

To motivate individuals to render their best and to utilize the scarce resources with maximum efficiency, it is necessary that their self-interest be served by doing so. Socialism was naive and unrealistic when it expected individuals to work efficiently even though it deprived them of the opportunity to serve their self-interest.

It therefore failed.

Capitalism is also unrealistic in its assumption that self-interest and social interest are always in harmony.

Its secularism and this-worldly perspective do not provide any mechanism for motivating individuals to serve the social interest when this is in conflict with their self-interest.

Experience has established beyond every shadow of doubt that it is not possible to motivate individuals to be both efficient and equitable unless a moral dimension is injected into their pursuit of self-interest so that social interest is not jeopardized even when it is in conflict with self-interest.

However, there is a two-way link between moral strength and socioeconomic justice; it is not possible to realize one without simultaneous progress in the realization of the other. In Muslim countries where the moral strength of the society is being sapped by socio-economic injustice, it would be unrealistic to depend primarily on sermons to raise moral consciousness; it is necessary to remove the inequities and to establish justice by a thorough restructuring of the economy and the society. Hence, the question of realizing justice needs to be addressed even before the imperative of moral transformation is discussed.

Socio-Economic Justice

Material rewards have become so inequitable that most people are unable to get a due reward for their hard work, creativity, and contribution to output. They have consequently become apathetic and their initiative, drive and efficiency have all suffered considerably. There are two factors responsible for this: firstly, the lack of realism in official policies, and secondly, concentration of wealth and power in a few hands in both rural and urban areas. The lack of realism in official policies has led to distortion of key prices which unconsciously result in lowering the incomes of tenant farmers, small and micro enterprises (SMEs), and workers, reducing their demand for needs and creating a misallocation of resources against need-fulfillment. The concentration of wealth and power, also due partly to official policies and partly to the exploitative economic system that has prevailed for centuries, has restricted competition and created a climate conducive to the misery of the rural and urban poor. This has reduced their willingness and ability to do their best.

Rural Uplift

The unrealism of official policies is fully reflected in the lack of emphasis on rural development. While a preponderant proportion of the population of Muslim countries lives in rural areas, official policies have placed undue emphasis on urban development and on the establishment of large-scale enterprises in urban areas, and neglected the development of human, physical and financial infrastructure in rural areas.

This has not only reduced the rewards for the effort of tenant-farmers and rural workers but also lowered their ability to invest in better seeds, fertilizers and equipment and in SMEs to supplement their incomes from agriculture. It has also led to an influx of labour to urban areas, thereby depressing wages and living conditions there.

In contrast with this, the heavy protection, concessionary financing and subsidized inputs given to large-scale urban businesses and industries has raised the comparative advantage of such urban enterprises, reduced the competitiveness of rural and urban SMEs, and enhanced the concentration of wealth and power.

While high tax evasion prevents the governments from reaping the benefit of urban development, the urban congestion lowers the wages and salaries of urban employees, prevents them from being appropriately rewarded for their contribution to urban prosperity, and lowers their ability to save and invest.

It is, therefore, necessary to introduce realism in official policies by removing the bias against the development of agriculture and SMEs. This is, however, not enough. It is also necessary to introduce a number of socioeconomic reforms that would help raise the real incomes of all workers, savers, investors and exporters, and particularly so if they are poor.

(Continued)