The PPP Union experts researched PPP models in history; there are numerous claims, official articles, and theories about PPP modes. According to the official website of Malaysia PPP, they stated that over the last 30 years, Malaysia’s PPP initiative has undergone a series of evolutions and transformations, which have contributed to the rapid development of the nation. The many project models implemented under the overarching PPP framework have unlocked opportunities for the government to stimulate the economy via full private sector financing, thus creating economic spillovers and multiplier effects, specifically from infrastructure projects.
According to the United Kingdom – England PPP Units and Related Institutional Framework published by EPEC in 2012, it is stated on page five (5 of 41) that the United Kingdom has historically been one of the largest markets for PPPs worldwide. However, within the United Kingdom, PPPs have been employed in very different ways and at varying levels of intensity.
The first PPP projects began in the early 1990s , and despite changes of government, there was a steady increase in their use throughout that decade, with most activity branded under the Private Finance Initiative (PFI). In addition to PFI, the UK also makes significant use of other types of PPP, such as joint ventures, concessions, and information and communication technology (ICT) PPPs. Consequently, the number and value of closed PPP projects remain high by international standards.
PPP Union experts mention the above two articles merely as examples, but there are dozens of other journals with similar contrasting statements. To find the original source and history of PPP, we studied various historical economic theories, systems , and their definitions. As a result of this extensive research, the experts observed that there are some differences in the terminology; we can say that the Public Private Partnership Models are already defined and explained in Islamic commercial jurisprudence (Arabic: فقه المعاملات) .
Islamic commercial jurisprudence (Arabic: فقه المعاملات) is an integral part of Islamic economics (Arabic: الاقتصاد الإسلامي). Islamic economics refers to the study of economics or economic activities and processes based on Islamic principles and teachings. According to Wetenhall, R. (2019), in “The Public/Private Interface: Surveying the History,” in G. Hodge and C. Greve (eds.), *The Challenge of Public-Private Partnerships: Learning from International Experience*, Cheltenham, UK: Edward Elgar, “Governments have used such a mix of public and private endeavors throughout history.”
Muhammad Ali of Egypt utilized “concessions” in the early 1800s to obtain public works at minimal cost while the concessionaires’ companies made most of the profits from projects such as railroads and dams. Muhammad Ali Pasha , born on March 4, 1769, and passing away on August 2, 1849, was the Ottoman Albanian governor and ruler of Egypt from 1805 to 1848, considered the founder of modern Egypt. He is also recognized as the first founder of the “concessions” PPP model.
Islamic Commercial Jurisprudence: Few Types of MOUs/Agreements
Shirkat (Partnership):
Musharakah is akin to a joint venture. It allows for profit or loss , equity, and an increase in brand goodwill , with participation from the parties who finance a project in agreed proportions, specifically in gold or silver, as will be explained later. They each agree to accept a percentage of the returns and risks , sharing the profits and losses of a project in proportion to their investments or as otherwise agreed . Shirkat also has a few forms, with a well-known form being Muzarabah .
Mudarabah
Mudarabah is a contract between the agent and the owner of the capital (the owner) structured so that the agent conducts business with the owner ‘s capital and shares a percentage of the profits with him. If any profit is generated , it is shared with the owner based on the contract. The fundamental condition for valid mudarabah is the acceptance of risk by the owner of the capital and the absence of any guarantee by the agent concerning the capital. Otherwise, the capital is considered a loan, and after concluding mudarabah , the agent cannot transfer the capital to another person at a lower interest rate.
Qirad or Muzaribat:
Qirad or Muqaradah (originating in Madinah) is what it was called in Madinah. The term comes from the Arabic ‘qard,’ meaning the surrender of rights over capital by the owner to the user of the capital [a loan]. The agent is referred to as ‘al-‘amil’ in Arabic, while the investor is known as ‘sahibul-mal’ or ‘rabbul-mal.’
We mentioned the above three examples to draw comparisons with modern terms of Public-Private Partnership (PPP). For additional Islamic financial practices, one can study Islamic commercial jurisprudence. Several types of financial, economic, asset management, safe-keeping, and agricultural dealings are defined and introduced in Islamic commercial jurisprudence. Any person can compare the terms of modern PPP to the Islamic defined system, which is quite similar.
Modern and Modified PPP
In 2015, when world leaders gathered at the International Conference on Sustainable Development Financing for Development, adopting 17 Sustainable Development Goals (SDGs) and 169 related targets, PPP came into focus for many countries, companies, and PPP facilitators. Thus, the history of reformed and modern PPP is linked to the legalization and regulation dates of PPP member countries.
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