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The Case Of Land Reforms In South Africa Economics Essay

A large share of the worlds poor resides in developing countries, with a highly concentrated rural sector where people rely on agriculture to survive. In rural areas land is considered as an important asset and also a vital input in the agrarian economy. The incidence of inequality in these developing countries is very high and one important reason for this inequality is a highly unequal distribution of land in the rural sector of these developing economies. This leads to inefficiencies in the labor and land markets in the rural sector, and those farmers who dont have any land end up having tenancy contracts. As (Ray, 1998) concludes that we can realize better productivity if the farms are relatively small in size and they are held privately by each household. This means that the issue of property rights is the center of discussion of land reforms in any country. Those who are in favor of the land reforms state that without the redistribution of land we cannot decrease inequality in a society.
The ownership of land is an important factor in determining the investment activities on agricultural land. If a farmer does not have ownership rights over the land which he works on, he will not make huge and long-run investments in the land as he may face threats of eviction, leading to a decline in productivity. Thus, to fully capture the gains from agriculture and increase productivity we need to redistribute the land, transferring it from the rich to the poor in such a manner that the beneficiaries will not have to pay the full compensation; rather government should pay part of the compensation, which can be achieved with the help of foreign donors. Only this type of policy changes can lead us to a successful land reform.
If we look at the case of South African land reforms first we have to look at the historical distribution of land in the country. The implementation of the 1913 Land Act initially resulted in confining the Black Africans only to the reserves which amounts to only 10% of the total land in the country. This means that Black Africans were not allowed to make any new farming operations, sharecropping or cash rentals outside of the reserves, thus depriving large chunk of population of any land, and almost 90% of the land was concentrated in very few hands, which also points towards the highly biased society reflecting a major flaw in the institutional structure of South Africa.
As pointed out by (Kariuki

The Growth Of The Takaful Industry Economics Essay

Takaful is derived from an Arabic word “Kafala” which means mutual guarantee, whereby a group of participants agree to mutually guarantee among themselves against a defined loss. This simple concept of takaful is the foundation of the takaful business, which is the present Shari’ah-compliant insurance
Takaful is “a scheme based on brotherhood, solidarity and mutual assistance which provides for mutual financial aid and assistance to the participants in case of need whereby the participants mutually agree to contribute for that purpose”
The contemporary jurists acknowledge that the foundation of Takaful was laid down in the system of “Aaqilah”, which was an arrangement of mutual help or indemnification customary in some tribes at the time of the Prophet (peace be upon him). Takaful provides solidarity in respect of any tragedy in human life and loss to the business or property.
The elements present in the conventional insurance viz; Gharar (uncertainty), Riba (interest) and Maisir (gambling) are against the tenets of Islam. Muslim Scholars do not object to insurance per se but only to certain weaknesses in the insurance contract (which weaknesses render the insurance contracts fasid). It is for this reason, 1972 Fatwa by National Council for Islamic Religious Affairs of Malaysia that life insurance is not lawful as it contains gharar, Maisir and riba.
Hence, takaful tries to remove all these facets present in the conventional insurance and works within the guidelines of Shari’ah. The concept of tabarru makes the transaction permissible and valid according to Islamic law. It changes the basis of contract from an exchange contract (mu’awadat) which is bilateral in nature, to a charitable contract, which is unilateral.
2.0 Takaful – Industry overview
Globally, the takaful industry has been growing rapidly, appealing to both Muslims and non-Muslims. Currently, there are more than 110 takaful operators worldwide. As per the Ernst

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