Trade, economics and the evolution of Muslim societies

4 May 2005

THE impulse to trade, the exchange of ideas and human beings across the borders of kingdoms and empires, is a recurrent theme in the history of Islamic civilisation. In the ancient world, the civilisations of the Tigris and the Nile had trading links with Greece and India millennia before Islam.

The Hijaz, in the era of the Prophet of Islam, peace be upon him, straddled the trade routes from the spice markets of Yemen to the markets of Byzantium and the Persian Empire. The Persian Shahs started the first communication networks’ use of gold coin as currencies, taxes and customs duties. Trade routes played a critical role in the politics and power equations of the Middle East.

The Silk Route from China to Samarkand extended to the trade arteries of Damascus, Nishapur, Isfahan, Baghdad and Palmyra to satiate the Roman craving for silk. Silk and frankincense were the crude oil of the ancient world, the commodities whose possession spelt wealth and power, the nodal points of the East-West struggle between rival empires. The Queen of Sheba’s trip to King Solomon’s Jerusalem was to seal a frankincense deal and the commodity made Oman one of the richest nations on earth. The cedar forests of Lebanon built the ships of the Pharaohs and the Phoenicians and when Greeks discovered the monsoon winds, Arabian merchants encountered the trades of the Malabar coast and Serendip (Sri Lanka) for the first time in history.

Arabian history is linked to trade since the beginning of time. Middlemen societies, portal cities, acquired great natural wealth and political significance. The incense of South Arabia enriched the Hijaz and Petra, the Nabatean capital.

The wealth of the Quraish tribe, where history took a spectacular turn in the year 511 AD, was based on control of a barren valley through which the caravan routes from the Yemen and the Mediterranean passed, through their monopoly of the trade in the holy water of the Zamzam well.

Trade occupied a unique status in Islamic civilisation. Prophet Muhammed, peace be upon him, himself led trade caravans from Mekkah to the Syrian markets. After the Arab armies defeated the Byzantine and Persian Empires, tolls and trade barriers vanished and Arabic emerged as the new lingua franca of the Islamic empire, the world’s richest free trade zone. Ummayad Damascus, Abbasid Baghdad, Aleppo and Mamluk Cairo boasted financial markets that were the medieval equivalent of the City of London and Wall Street. The English word cheque, derived from the Abbasid sek, referred to the Baghdadi letters of credit that enabled its merchants to trade everywhere from Venice to Canton to Cochin.

Charlemagne’s diplomatic delegation to the Baghdad of Caliph Haroun Al-Rashid was nothing more than a recognition of the rising Arab power in international trade. The legendary wealth of Venice and the Italian Genoese and Amalfi traders was based on their dominance of the maritime trade to the Levant and the Black Sea.

Of course, the Mongol holocaust was a nightmare for the Arab and Islamic civilisation. The Arab trade with the Far East plummeted, Baghdad was ransacked, the caliphate degenerated into rival kingdoms of Turkish adventurers, slaves and mercenaries.

The dhows of Oman took Islam to Sri Lanka, Zanzibar and Malaysia. Al-Idrisi, the Arab cosmographer, disproved Ptolemy’s claim that the Indian Ocean was an inland sea at a time when just to express Greek geographic theories was an invitation to the fire stakes of the Inquisition. Ibn Batuta travelled from Tangiers to the court of Tughlak Delhi and Ming China. The first persons Vasco da Gama met in Calicut were Arab traders from the Maghreb. Arab traders crossed the Sahara desert to trade gold, ivory and slaves with the African kingdoms of Mali.

Islam, unlike Marxism, celebrates wealth and private riches but seeks to inculcate ethics in the Darwinian quest for money and power. The zakat, alms tax, benefits not just the poor but also debtors, travellers, merchants and even foreign guest workers in a Muslim state. The sadaqa, a voluntary donation, extends to mediation of trade disputes. The moral principles of Islam enabled the creation of common value systems that enabled trade and business possible.

The bazaar has been the central symbol of Arab and Islamic societies for over fourteen centuries. Yet without the ethical-Islamic dimension, trade would be impossible without market research, consumer protection boards, chambers of commerce, trademarks, government regulations or non-standardised measures. The gestures and communications protocols of the medieval Arabian bazaars are as intricate as anything the Gatsbys of the Chicago futures pits have devised. After all, the glass towers and digital souks of New Dubai are the same portals to the global grids as the trade fairs of Mekkah, Fustat and Fez.

Matein Khalid is a Dubai-based investment banker.