24 March 2012

Zakat and Poverty Alleviation

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Bangladesh Children’s Budget too low, says UNICEF report Bangladesh Children’s Budget too low, says UNICEF report http://www.clickrally.com/bangladesh-childrens-budget-low-sunicef/

In the first two blogs in this Lenten series we’ve seen that poverty can only be remedied in a holistic way. Now, having examined how Christians struggle with this concept, I turn to Muslims and show how alleviating poverty represents a challenge for them too.

Though less than the Bible, the Qur’an often speaks of the poor and of the duty of believers to care for them. The word most used today for a poor person is faqir, which is found in this sense seven times in the Qur’an. Another common word is maskin (needy, with the connotation of helpless). Its plural form is used twenty-two times in the Qur’an. The biblical expression of caring for widows and orphans is missing, though verses drawing attention to the plight of orphans are frequent (twenty-three times – Muhammad himself had been one).

The two passages I offer here come from suras (chapters) of the Meccan period (between 610 and 622, before the Muslims emigrated to Medina). Notice in the first one that believers should take Judgment Day with the utmost seriousness, and that charity is first about one’s relationship with God, and only secondarily for the poor themselves. The givers’ motive is God’s pleasure; not people’s thanks or praise:


As for the virtuous, they will drink from cups spiced with nectar.

A spring that is reserved for God’s servants; it will gush out as they will.

They fulfill their pledges, and reverence a day that is extremely difficult.

They donate their favorite food to the poor, the orphan, and the captive.

“We feed you for the sake of God; we expect no reward from you, nor thanks.

We fear from our Lord a day that is full of misery and trouble” (Q. 76:5-10, Rashad Khalifa).


A similar passage alludes to the Qur’an’s cardinal virtue, gratitude. An ungrateful person will tend to hoard his or her possessions – hence the scourge of greed:


When the human being is tested by his Lord, through blessings and joy, he says, “My Lord is generous towards me.”

But if He tests him through reduction in provisions, he says, “My Lord is humiliating me!”

Wrong! It is you who brought it on yourselves by not regarding the orphan.

And not advocating charity towards the poor,

And consuming the inheritance of helpless orphans,

And loving the money too much (Q. 89:15-20, Rashad Khalifa).


So Muslims are called to give freewill offerings as often as possible, but they are also enjoined to reserve yearly one fortieth of their total assets to be distributed to the needy. This is one of Islam’s five “pillars,” zakat. That word’s verbal root means “to purify.” In that sense, this is a duty, which, once discharged, purifies the donor by atoning for several of his or her sins. But a question arises: practically, how has zakat functioned in Muslim societies to reduce poverty? Has it worked in the past and how relevant is it today?


A rosy but fuzzy narrative

In a rather scathing article in a journal published in Dhaka, Bangladesh (Journal of Islamic Economics, Banking and Finance), Mohammad Omar Farooq explains that against the backdrop of the resurgence of Islam in the 1970s and 1980s …


“…Muslims were reminded that it is religiously important to recognize that Islam has complete guidance and solution of all the social problems and not only they must seek such solutions from within Islam as a holistic source, but also Islam’s comprehensive guidance is superior to any other solution from the world-shelf.”


In other words, according the slogan of the Egyptian Muslim Brotherhood (and all islamist groups in general), “Islam is the solution.” But what about poverty? “Islam solves the problem of poverty,” goes the standard reply, “since God instituted zakat, enjoining the wealthy to share with their poorer fellow citizens.”

According to Farooq, professor of economics at Upper Iowa University (see his 2011 book, Toward Our Reformation), the “fuzzy narrative” among fellow Muslims goes like this:


“Based on the Qur’anic revelation and the Prophetic leadership, a caring Islamic society was established. The Islamic state founded by the Prophet brought in reforms in people’s attitude and institutional policies and frameworks to help those in poverty. Within the period of Hadrat Umar’s rule (the second caliph) poverty was addressed. The measure of this success with poverty was cited as qualified zakat payers used to roam the streets to find qualified zakat recipients, but were unsuccessful.”


In other words, poverty was eliminated. History does not bear this out, however. The common Muslim explanation is that Islamic governance since the Umayyads (the first dynasty based in Damascus) devolved into quasi-secular dynasties, which were notoriously unsuccessful in even reducing poverty. The reason must be that the political authorities simply neglected the “institutional policies” for a “caring Islamic society.”

Farooq doesn’t buy that answer. Any kind of lesson drawn from the rule of the “Rightly Guided Caliphs” (632-661), he says, is unlikely to apply to other periods of history. This is because poverty alleviation was merely redistribution from rich to poor by dipping into the state coffers dramatically swelled at the time by the booty of a rapidly expanding empire. To assert that zakat was and still is a panacea for reducing economic disparities is an argument from silence. The historical data are simply not there.

So if the solution to widespread and endemic poverty in much of today’s Muslim word is to apply “Islamic economics,” then what are we talking about? Farooq’s contention is that despite the enthusiasm for an “Islamic” middle way between capitalism and socialism starting in the 1960s, “Islamic economics” never got off the ground. What happened, in fact, was an almost immediate diversion created by the fad of Islamic banking and finance – what Farooq calls “primarily a prohibition-driven industry with a legalistic bent.” Yes, it prohibits usury (as does the law of Moses, because charging exorbitant interest rates exploits the poor), but it offers no positive strategies to stimulate the economy and empower the poor to climb out their hole.


The challenge of rethinking zakat today

So the rosy picture of Islam’s solution to poverty, according to Farooq, is just that – “a romanticized reading of our history.” Nor is there any systematic effort on the part of Muslim economists to actually focus on this glaring weakness:


“Even the field of Islamic economics has not quite picked up and focused on the challenge of poverty. Indeed, if the contemporary literature is any indication, poverty as an independent theme seems to have been ignored. For example, as much as the issue of development and growth are mentioned in the pertinent Islamic literature, focused attention to or studies of poverty is rather absent.”


Then Farooq comes back to the “golden age” of the Rightly Guided Caliphs and examines the efforts to redistribute the monies produced by the wars of conquest. For two reasons, this cannot provide any help for the war against poverty today.


First, redistribution schemes, by definition, don’t “help the poor to increase their productive capacity leading to long term earning opportunity.”

Second, wealth pouring in from the war chest of a dominant imperial army has no relevance whatsoever to the contemporary situation in Muslim countries.

On the positive side, “The Prophet did leave with us profoundly practical examples to help people become economically self-reliant, as exemplified in his guidance to a poor person to acquire an axe to gather wood and sell for income; unfortunately, such examples were not taken meaningfully to systematically develop relevant programs.”


In the present day, Farooq applauds the path-breaking work of Indian economist (and Nobel laureate) Amartya Sen on issues of poverty, but laments the fact that no such work has been attempted by Muslim economists, or even put into practice by various Muslim states. In his own country of Bangladesh a pioneering study was conducted by two American anthropologists in a “remote rural area of Bangladesh in the 1970s.” He explains,


“As part of the research they studied the problem of food shortage as insiders - living in the community the way the community did. Their sociological study based on field experience is a remarkable narrative with a deep human sensitivity. Their work, published as a brief paperback Needless Hunger drives the point home that there is not a problem of food shortage in terms of production, but there is a serious and fundamental problem of distribution. They also found that the foreign aid pouring into the country had a detrimental effect as it actually consolidates the very elite who keep the majority, the poor, powerless and hungry.”


All this to say that without painstaking effort to collect the relevant data using the tools of several academic disciplines, Muslim scholars should put aside the old mantra that zakat and charity will automatically wipe out poverty. Without that research no progress will be made – a sobering point, considering that the majority of the world’s poorest are Muslim.

There is hope, nonetheless, writes Farook. A recent book began to raise these issues in an interdisciplinary way, Poverty and Charity in Middle Eastern Contexts, edited by M. Bonner, M. Ener, and A. Singer in 2003. He singles out two chapters in particular. The first is by a rising star in this field, Duke scholar Timur Kuran (read about the think tank he founded, AALIMS http://aalims.org/), and it’s entitled, “Islamic Redistribution through Zakat: Historical Record and Modern Realities.” A paragraph Farooq cites is worth repeating here, as it nicely sums up a central thesis of his chapter:


“There has never existed a single source that offers an authoritative account of how zakat should be paid or disbursed. Accordingly, the system has never been applied consistently over either time or space. A source of immense controversy from the start, the application of zakat underwent transformations even during the Prophet Muhammad’s own lifetime. Also, during Islam’s first few centuries the application was never uniform. In view of this historical record, the current diversity in implementation is hardly surprising. Nor is it puzzling that the contemporary literature on zakat is riddled with inconsistencies and ambiguities.”


Since, therefore, the historical sources on how zakat was organized in the past are mostly lacking (including in the Qur’an and Sunna), it would be foolhardy to pontificate on how it should be carried out today. What is more, zakat was never meant to “alleviate poverty,” in the modern sense. As I said above, it was primarily meant to “purify” the donors and draw them nearer to God. The primary focus was never to lift the needy out of poverty. And then, of the eight possible recipients of zakat listed in the sacred texts, only three fit the category of the poor. The others might or might not be poor: the collectors of zakat themselves, those who needed to be converted to Islam, the travelers, those fighting in the way of God (a recognized jihad) and those in debt.

Another problem is that there was no agreement among jurists as to the exact criteria for designating someone as a recipient of zakat. In a study Timur Kuran conducted in Malaysia, disbursement of zakat monies to the poor ranged somewhere between ten and fifteen percent. The lion’s share went to religious education, with just a small amount given for the hajj and even less for new converts.

The second chapter Farooq highlights is by Ingrid Mattson, “Status-Based Definitions of Need in Early Islamic Zakat and Maintenance Laws,” where she argues that historically there was no common definition of who is a “poor” or “needy” person, a faqir or a maskin. Mattson, an anglo-American convert to Islam, is an Islamics scholar at the Hartford Seminary and served as the first female president of the Islamic Society of North America (ISNA).

On a theme closely related to my last blog on poverty in the US, Mattson distinguishes between those born into poverty (the structurally poor) and those brought low through various circumstances (the incidental poor). Though I have no space to delve into the details, suffice it to say that traditional zakat distribution practices favored only the incidentally poor. If anything, such a strategy of redistribution tended to reinforce the status quo – that is, keeping a permanent lid on the lower classes.

Just to give you an idea of the complexity we face today in defining poverty, let alone in trying to reverse it, here is Kuran on today’s vastly different economic and social landscape, and why this calls for a radical rethinking of zakat. In this passage he has just pointed out that the traditional base of zakat was calculated on the basis of a person’s assets. But today that could potentially leave out a large segment of the population that is otherwise well off:


“Although none says that contemporary forms of wealth are exempt, one is hard-pressed to find details concerning stocks, bonds, vacation homes, collectibles, retirement accounts, or savings for a child’s education, to mention just a few of those that now carry major significance. Likewise, for all the specifics they provide on agricultural income, they avoid commentary on income derived from the industrial and service sectors—neither of which is negligible in any contemporary economy.”


I’ll wrap up the discussion here. I’ve provided resources for the reader who wants to pursue the subject further. In the meantime, I hope to have made it clear that Muslims, like Christians and people of other faith traditions, have a lot of homework ahead of them if they are serious about reducing the stark, shocking and ominous inequalities between the haves and the have-nots of this planet. As trustees of God’s good creation, we have no choice but to get to work on this. At the same time, if we join hands we will achieve better results. No doubt too, in so doing we will please our Creator whose love and compassion for all people – and especially the poor and marginalized – is boundless.