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Subject : Ruling on Privatization of Public Sector

Fatwa Number : 923

Date : 19-08-2010

Classified : Transactions & Marketing

Fatwa Type : Search Fatawaa

Question :

What is the ruling of Sharia on the privatization of government institutions or bodies in the Muslim World, particularly Jordan, with providing the evidence from the texts of Sharia?

The Answer :

All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions. 

Privatization is selling the state`s property to a person or persons to become their private property later on. If this serves the common good then it is permissible, if not then it isn`t.

Jurists have decided that the ruler`s disposal of public funds is conditioned upon the common good. Because they are flaccid, some public institutions don`t serve the citizens properly, so privatization is the best solution. On the contrary,  some are beneficial and generate income to the public treasury, so there is no need for their privatization. The evidence on this is that Ibn 'Umar (May Allah be pleased with them) reported: The Prophet (PBUH) said: "All of you are guardians and are responsible for your subjects. The ruler is a guardian of his subjects, the man is a guardian of his family, the woman is a guardian and is responsible for her husband's house and his offspring; and so all of you are guardians and are responsible for your subjects." [Al-Bukhari and Muslim]. Also, Narrated Ma'qil: I heard the Prophet (PBUH) saying: "Any man whom Allah has given the authority of ruling some people and he does not look after them in an honest manner, will never feel even the smell of Paradise." {Bukhari}. And Allah the Almighty Knows Best.




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