The Role of state during Caliph Era and Ottoman Empire

PRESENTED BY: NOR HAFIZAH BINTI SAMANALMASTER OF ISLAMIC BANKING AND FINANCE

Understanding the role of state in public economy

Understand the development of public finance.

Realize the history of public finance during Caliph Era and Ottoman Empire

Learning Outcome

Introduction

Role of state

Caliph Time

Ottoman Empire

History of Baitul Mal

Conclusion

The Role of State

Role of State

Managing the

Finance

Maintain Justice

Distribute equally to

poor

Improving welfare

History of Public Finance

Abu Bakar As-

siddiq(632-634 C)

Umar Al-Khattab(634-644

A.C)

Uthman Bin Affan

(644-645 A.C)

Ali bin Abi Talib

(656-661 A.C)

Abu Bakar As-siddiq (632-634c)

• Abu Bakar is Abdullah Ibn Abu Quhafah al-Tamimi• His management is just for two year• Source of revenue which are zakat, ushr,

kharaj, jiziyyah and fay’• Other revenue include gold, silver, metal.• He is the greatest people in managing

economy organization in Islamic state.

Umar Al-Khattab (634-644 A.C)

• Second Caliph in Islamic state• He instituted two taxes, the kharaj and jizyah.• He conquered Damascus in 635 and Jerusalem in

637, both from Syria in the Byzantine Empire.• Umar bin Al- Khattab decided to establish Baitul

Mal as Central of Treasury • He appointed Abdullah bin Arqam as the officer

of Treasury and Abdur Rahman as assistant

Uthman bin Affan (644-645 A.C)

• Longest period in management during his management.• There are some resources of the state which are

Zakat, Ushr’, Kharaj, Jizyah, Fay’ and Ghanimah. • He said that zakat are only able to pay after the

payer deducted all their debt.• He also divided soil of the state to individual until

the income received is from 5 million up to 41 million dirham

Ali bin Abi Talib

• Manages the administration of baitul-mal in the state with smooth management• Caliph Ali used the principle of fairness. • The fund from baitul-mal should distributed to

all Muslim without see their background.• Implementation taxation which the system

where must be able and willing to pay the taxes based on their ability. • He always care and aware about people who is

in need like widow and orphans.

Ottoman Empire

Flow of Financial during Ottoman

1854

• First foreign loan borrowing from British bankers

1854-1875

• Sublime Porte (central government) financed without being careful with the balance of state

1876• Stopped payment the debt

1878

• Decided to create an International Commission• Established Ottoman Public Debt Administration (OPDA)

1903-1904

• The gross receipts up around 13%

1911

• Reached 17%• Continued to borrow from abroad

Conclusion

Managing sources and

expense

Public development

Eradication of poor