(Series of Answers by the Eminent Scholar Ata Bin Khalil Abu Al-Rashtah, Ameer of Hizb ut-Tahrir, to the Questions of Visitors to His Facebook Page "Economic")
To: Ahmad Sa Saad
Question:
Assalamu Alaikum our Sheikh, may Allah honor you with Islam and honor Islam through you. I pray to Allah that I be among those who give you the Bay'ah for the Khilafah (Caliphate) upon the method of the Prophethood; indeed, He is capable of all things... I have a question regarding the issue of borrowing from foreign countries and international financial institutions. It is stated in the book Funds in the Khilafah State that it is not permissible according to Sharia because loans from them are only granted with usurious interest (riba) and under certain conditions. The question is: When is borrowing permissible, and what are the conditions under which borrowing is prohibited? Is there a difference if the state is one with a treaty (Mu'ahid) or a warring state (Harbi)?? May Allah assist you in what is good for Islam and the Muslims in this world and the Hereafter. Wassalamu Alaikum wa Rahmatullah wa Barakatuh.
Answer:
Walaikum Assalam wa Rahmatullah wa Barakatuh.
It seems you have misunderstood what was mentioned in Funds in the Khilafah State: "As for borrowing from foreign states and international financial institutions, it is not permissible according to Sharia because loans from them are only granted with usurious interest (riba) and under certain conditions." You thought this phrase implies there are conditions under which borrowing from foreign states and international financial institutions would be permissible, and thus you asked about those conditions. This is not the case; rather, it signifies that borrowing from foreign states and international financial institutions is prohibited for two reasons: (it involves usurious interest, and it involves conditions). Because borrowing is conducted this way, it is prohibited. The book clarified this matter in the rest of the paragraph, stating:
"Usurious interest is prohibited by Sharia, whether for individuals or states. The conditions grant the lending states and institutions authority over the Muslims, and make the will and actions of the Muslims dependent on the will of the lending states and institutions, which is not permissible by Sharia. International loans have been among the most dangerous calamities for Islamic lands and one of the reasons for imposing the control of the kuffar over the lands of the Muslims; the Ummah has long suffered from their woes. Therefore, it is not permissible for the Khalifah to resort to international loans to cover expenditures in these areas."
Accordingly, borrowing from foreign countries as explained above is not permissible. As for the rest of your question regarding whether the foreign state is in a state of war or has a treaty, the matter is as follows:
According to current international borrowing rules, borrowing does not occur without Sharia violations ("riba and conditions contrary to Sharia"). Consequently, it is not permissible to borrow from foreign countries, whether the state is a warring state (Harbi) or one with a treaty (Mu'ahid) according to current international treaties.
Your brother, Ata Bin Khalil Abu Al-Rashtah
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