Esham, the Origin of Sukuk for Facing the Crisis: Historical Experience
Pandemic brings a crisis. This makes world leaders have to work hard and smartly in managing state budgets. During the heyday of Islam, Muslims also faced crises. Given that time the power of Islam mastered many areas of the world, it can be assumed that the crisis that occurred in the past was a global crisis as it is happening today. The difference is the crisis that occurred at the time because of losing the war. This paper tries to describe the historical experience of the esham, one of the fiscal instruments in the Islamic world that helped the Ottoman Empire overcome the crisis. Esham has mobilized low-cost funds from the public in a relatively concise time. Esham served as a better choice than looking for foreign debt. As the origin of sukuk, esham has simpler structure so that can be used as an alternative to sukuk with a lower cost. To deal with a crisis, esham may intervene in the economy. Esham funds to the real sector in turn will help the government drive the economy as well as control prices in the market for goods and services. Therefore, esham has the potential in facing the crisis.
Birdal, Murat. 2010. The Political Economy of Ottoman Public Debt, Insolvency and European Financial Control in the Late Nineteenth Century. London: Tauris Academic Studies.
Çizakça, Murat. 1996. A Comparative Evolution of Business Partnerships: The Islamic World and Europe, with Specific Reference to the Ottoman Archives. Leiden, New York, Koln: Brill.
Çizakça, Murat. 2000. A History of Philanthropic Foundations: Islamic World from the Seventh Century to the Present (Istanbul: Bogazici University Press).
Çizakça, Murat. 2004. Ottoman Cash Waqfs Revisited: The Case of Bursa 1555- 1823. Publication ID 4062, The Foundation for Science, Technology and Civilisation (FSTC), Manchester.
Çizakça, Murat. “Democracy, Economic Development and Maqasid al-Shari’ah”, Review of Islamic Economics, Vol. 11, No. 1 (2007), 101-118.
Çizakça, Murat. 2010. Domestic Borrowing Without the Rate of Interest: Gharar and The Origins of Sukuk. Munich Personal RePEc Archive (MPRA) Paper No. 23205.
Çizakça, Murat. 2011. Islamic Capitalism and Finance: Origins, Evolution, and the Future. Cheltenham: Edward Elgar Publishing.
Çizakça, Murat. 2012. Finance and Economic Development in Islam, Historical Perspective. Munich Personal RePEc Archive (MPRA) Paper No. 42046, October 18.
Çizakça, Murat. 2013a. Finance and Development in Islam: A Historical Perspective and a Brief Look Forward. In Iqbal, Zamir, and Mirakhor, Abbas. (Eds.). Economic development and Islamic finance (pp. 133-147). Washington, DC: The World Bank.
Çizakça, Murat. “Proposal for Innovation in the Capital Markets: Esham”, Global Islamic Finance Report (2013b), 91-93.
Çizakça, Murat. Can There be Innovation in Islamic Finance? Case Study: Esham, a paper was presented at the 11th IFSB Summit, Knowledge Sharing Partner Session: “New Markets and Frontiers for Islamic Finance: Innovation and the Regulatory Perimeter” in Mauritius (May 20, 2014a).
Çizakça, Murat. “Risk Sharing and Risk Shifting: An Historical Perspective”, Borsa Istanbul Review, Vol. 14, No. 4 (2014b), 191-195.
Çizakça, Murat. “Merging Waqf and Sukuk”, Journal of Islamic Economics, Banking and Finance, Vol. 12, No. 3 (July-September, 2016a), 98-111.
Çizakça, Murat. 2016b. Merging waqf and sukuk: Should we or shouldn’t we? Incomplete paper submitted (in absentia) at the Global Waqf Conference, September 2016 in Swansea, UK.
COMCEC. 2018. The Role of Sukuk in Islamic Capital Markets. Ankara: The Standing Committee for Economic and Commercial Cooperation of the Organization of the Islamic Cooperation (COMCEC) Coordination Office.
Hummel, Daniel, and Goud, Blake. 2017. An Esham-Ijara Structure in the United States?" Journal of Islamic Accounting and Business Research, Vol. 8, No. 4, 455-467.
Kalemli-Ozcan, Sebnem. 2007. Financial Development, Institutions, and Growth: Historical Evidence from the Ottoman Empire. University of Houston and National Bureau of Economic Research (NBER), December.
Musari, Khairunnisa. “The Evolution of Waqf and Sukuk toward Sukuk-Waqf in Modern Islamic Economy”, International Journal of ‘Umranic Studies, Vol. 2, Issue 1 (January, 2019a), 45-54.
Musari, Khairunnisa. 2019b. Esham for Fiscal Sustainability, An Alternative to Sukuk in Islamic Finance Perspective: Historical Experience. A paper was presented at Researcher Day 2019 “The 2019 International Conference on Fiscal Policy and Input-Output Modeling” at Auditorium of Fiscal Policy Agency Building, Ministry of Finance, Jakarta, August 28th-29th.
Musari, Khairunnisa. 2020. Cash Waqf Linked Sukuk, A New Blended Finance of Fiscal Instrument for Sustainable Socio-Economic Development: Lesson Learned from Indonesia. A paper was presented at 12th International Conference on Islamic Economics and Finance (ICIEF) “Sustainable Development for Real Economy” with hosted by Istanbul Sabahattin Zaim University (IZU) and jointly organized by Islamic Research and Training Institute (IRTI) - Islamic Development Bank (IDB) and International Association of Islamic Economics (IAIE) with the collaboration of Statistical, Economic and Social Research and Training Centre for Islamic Countries (SESRIC) and Hamad Bin Khalifa University, Istanbul, June 14th-20th.
Özbek, Nadir. 2018. “Tax Farming in the Nineteenth-Century Ottoman Empire: Institutional Backwardness or the Emergence of Modern Public Finance?”, The Journal of Interdisciplinary History, Vol. 49 , No. 2, 219–245.
Sök, Kadir Sarp. 2019. An Analysis Study On The Implementations of Gedik, Esham And Muzara’a, A Master's Thesis Department of History İhsan Doğramacı Bilkent University, Ankara.
Wheatcroft, Andrew. 1996. The Ottomans: Dissolving Images. London: Penguin.
Zen, Fauziah and Fukunari Kimura. 2020. Maintaining Fiscal Sustainability During the Pandemic Crisis. Economic Research Institute for ASEAN and East Asia (ERIA) Policy Brief No. 2020-04, June.
Adil, Mustafa. 2020. 2020: A strong year for Sukuk. Investment Insight, Refinitiv, October 19th. Retrieved from https://www.refinitiv.com/perspectives/future-of-investing-trading/2020-a-strong-year-for-sukuk/
Akhlas, Adrian Wail. 2020. Govt raises $2.5b through global sukuk offering to address pandemic deficit. The Jakarta Post, June 18th. Retrieved from https://www.thejakartapost.com/news/2020/06/18/govt-raises-2-5b-through-global-sukuk-offering-to-address-pandemic-deficit.html.
Fitch Ratings, Sukuk Volumes Resilient to Coronavirus Stress, Fitch Ratings, Islamic Finance (October 21, 2020). Retrieved from https://www.fitchratings.com/research/islamic-finance/2020-sukuk-volumes-resilient-to-coronavirus-stress-21-10-2020
This work is licensed under a Creative Commons Attribution 4.0 International License.
The journal can be accessed publicly, which means that all content is provided freely accessible without charge to either the user or the institution. Users are allowed to read, download, copy, distribute, print, search, or cite to the full text of the article did not have to ask permission from the publisher or author.