{"id":5368,"date":"2022-03-22T01:01:54","date_gmt":"2022-03-22T01:01:54","guid":{"rendered":"https:\/\/ethis.co\/blog\/?p=5368"},"modified":"2022-10-30T17:42:33","modified_gmt":"2022-10-30T17:42:33","slug":"islamic-social-finance-poverty-alleviation","status":"publish","type":"post","link":"https:\/\/ethis.co\/blog\/islamic-social-finance-poverty-alleviation\/","title":{"rendered":"Role of Islamic Social Finance in Poverty Alleviation"},"content":{"rendered":"\n<p><strong><em>By Hanan Hussain<\/em><\/strong><\/p>\n\n\n\n<p>Islam is a religion of social justice. Quranic verses and the teachings of Prophet Muhammad (\ufdfa) sought to eliminate injustice and poverty which was widespread all over the world at that time as today. Both poverty and inequality are the root cause of many evils. This was even recognised by the Prophet (\ufdfa) who said; \u201cPoverty almost leads to disbelief\u201d (Musnad Ahmed).<\/p>\n\n\n\n<p>Islamic scholars elaborate principles such as human welfare, public accountability, social justice which are all are embedded in the Islamic economic system according to the Maqasid al Shariah (Objectives of Shariah).<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_51_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\" role=\"button\"><label for=\"item-69e75f490d5e9\" ><span class=\"\"><span style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input aria-label=\"Toggle\" aria-label=\"item-69e75f490d5e9\"  type=\"checkbox\" id=\"item-69e75f490d5e9\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/ethis.co\/blog\/islamic-social-finance-poverty-alleviation\/#Poverty_a_serious_global_problem\" title=\"Poverty a serious global problem\">Poverty a serious global problem<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/ethis.co\/blog\/islamic-social-finance-poverty-alleviation\/#Global_inequality\" title=\"Global inequality\">Global inequality<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/ethis.co\/blog\/islamic-social-finance-poverty-alleviation\/#The_Muslim_world\" title=\"The Muslim world\">The Muslim world<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/ethis.co\/blog\/islamic-social-finance-poverty-alleviation\/#Global_actions_and_Sustainable_Development_Goals\" title=\"Global actions and Sustainable Development Goals\">Global actions and Sustainable Development Goals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/ethis.co\/blog\/islamic-social-finance-poverty-alleviation\/#Islamic_Social_Finance_and_SDGs\" title=\"Islamic Social Finance and SDGs&nbsp;\">Islamic Social Finance and SDGs&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/ethis.co\/blog\/islamic-social-finance-poverty-alleviation\/#Our_immense_potential\" title=\"Our immense potential&nbsp;\">Our immense potential&nbsp;<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Poverty_a_serious_global_problem\"><\/span><strong>Poverty a serious global problem<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"536\" src=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/03\/921-1024x536.png\" alt=\"Islamic Social Finance\" class=\"wp-image-5369\" srcset=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/03\/921-1024x536.png 1024w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/03\/921-300x157.png 300w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/03\/921-768x402.png 768w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/03\/921.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>About 9.2% of the global population, or around 689 million people, live in extreme poverty according to a World Bank report. Following the COVID-19 pandemic it is estimated that around 711 million people live in extreme poverty. Conflicts and climate change have aggravated the situation further.&nbsp;<\/p>\n\n\n\n<p>If we identify people who experience deprivation with respect to health, education and living standards, it is shocking that as many as 1.3 billion people living in 107 countries who account for 22% of the world population live in Multidimensional poverty. Most of them, around 84% live in South Asia and Sub Saharan Africa.&nbsp;&nbsp;<\/p>\n\n\n\n<h3><span class=\"ez-toc-section\" id=\"Global_inequality\"><\/span><strong>Global inequality<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>According to the latest report by Oxfam on the theme \u201cInequality Kills\u201d, global inequality widened to an unprecedented level, especially post-COVID-19.<\/p>\n\n\n\n<p>The following facts are revealed in the report.<\/p>\n\n\n\n<div class=\"is-layout-flow wp-block-group\"><div class=\"wp-block-group__inner-container\">\n<ul><li>The wealth of the 10 richest men has doubled, while the income of 99% of humanity is worse off, due to COVID-19.<\/li><li>Since 1995, the top 1% has captured nearly 20 times more global wealth, adversely affecting the 50% of humanity at the bottom.<\/li><li>252 men alone have more wealth than the 1 billion women and girls in Africa, Latin America and Caribbean combined.<\/li><li>20 of the richest billionaires are estimated, on average, to be emitting as much as 8000 time more carbon than the billion poorest people.<\/li><li>Every day inequality contributes to the death of at least 21,300 people. That is one person in every four seconds.<\/li><\/ul>\n\n\n\n<p>Further, this report highlights \u201cExtreme inequality is a form of Economic Violence\u201d. On the other hand, hunger kills over 2.1 million people each year at a minimum, while an estimated 5.6 million people die every year for lack of access to health care in poor countries.<\/p>\n\n\n\n<p>It is estimated that by 2030, the climate crisis could kill 231,000 people each year in poor countries. It is also estimated by 2030, 67% of the world\u2019s poor will live in fragile contexts and 43 countries with the highest poverty rates are in a fragile state.&nbsp;<\/p>\n\n\n\n<h3><span class=\"ez-toc-section\" id=\"The_Muslim_world\"><\/span>The Muslim world<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"536\" src=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/03\/931-1-1024x536.png\" alt=\"Islamic Social Finance\" class=\"wp-image-5373\" srcset=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/03\/931-1-1024x536.png 1024w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/03\/931-1-300x157.png 300w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/03\/931-1-768x402.png 768w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/03\/931-1.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n<\/div><\/div>\n\n\n\n<p>Here&#8217;s a breakdown of Dr. Hassan Syedand Dr. Sema Yilmaz\u2019s findings according to a policy paper submitted at the International Congress of Islamic Economy, Finance and Ethics a couple of years ago.&nbsp;<\/p>\n\n\n\n<div class=\"is-layout-flow wp-block-group\"><div class=\"wp-block-group__inner-container\">\n<ul><li>Muslims are 20% of the global population.<\/li><li>50% of the world\u2019s poorest people live in the Muslim world.<\/li><li>Every 1 in 5 Muslims lives in extreme poverty.<\/li><li>Out of 57 OIC member countries, 25 member states of Sub Saharan African countries are amongst the most poverty-stricken countries in the world.<\/li><li>On the contrary, and paradoxically, Muslim countries hold 70% of global natural resources.<\/li><\/ul>\n<\/div><\/div>\n\n\n\n<p>These findings are strange and shocking considering that Islam has laid the foundation for the fight against poverty since its very inception. Giving charity for the upliftment of the vulnerable sections of the community is among the core tenets of the Islamic way of life.&nbsp;<\/p>\n\n\n\n<h3><span class=\"ez-toc-section\" id=\"Global_actions_and_Sustainable_Development_Goals\"><\/span><strong>Global actions and Sustainable Development Goals<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is clearly stated in the UN Charter that world peace is connected with improved social development and social justice. In 2015 the UN\u2019s Sustainable Development Goals (SDGs) were adopted while the World Humanitarian Summit held in 2016 aimed to end poverty and hunger in all forms.&nbsp;<\/p>\n\n\n\n<p>However, with the pandemic, it has been calculated as per U.N estimates that US$ 175 billion is required per annum to fight against extreme poverty. This amount is less than 1% of the combined income of the richest countries in the world. Interestingly about 70% of the global extreme poor people live in South Asia and Sub Saharan Africa, the vast majority of which are Muslim communities.&nbsp;&nbsp;<\/p>\n\n\n\n<h3><span class=\"ez-toc-section\" id=\"Islamic_Social_Finance_and_SDGs\"><\/span>Islamic Social Finance and SDGs&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Out of the seventeen SDGs, seven goals can be addressed through Islamic Social Finance as being worthy of the highest priority. These are:<\/p>\n\n\n\n<p>1. Zero Poverty<\/p>\n\n\n\n<p>2. Zero Hunger<\/p>\n\n\n\n<p>3. Good Health and Wellbeing<\/p>\n\n\n\n<p>4. Quality Education<\/p>\n\n\n\n<p>5. Clean Water and Sanitation<\/p>\n\n\n\n<p>6. Reduced Inequality<\/p>\n\n\n\n<p>7. Decent work and economic growth<\/p>\n\n\n\n<p>Unfortunately, the global Muslim Umma is not at the forefront of setting the global agenda. This situation needs urgent redress. The Muslims should initiate robust programs through capitalising on our welfare potential to overcome this global crisis.&nbsp;<\/p>\n\n\n\n<h3><span class=\"ez-toc-section\" id=\"Our_immense_potential\"><\/span><strong>Our immense potential&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As per a study of the Islamic Research and Training Institute of the Islamic Development Bank, the global <a href=\"https:\/\/www.globalsadaqah.com\/blog\/what-is-zakat-why-muslims-pay\/\" target=\"_blank\" rel=\"noreferrer noopener\" title=\"zakat\">zakat<\/a> potential stands at approximately US$ 50 billion to US$ 600 billion annually. (WZPI report). Waqf assets themselves are estimated to reach US$ 1 trillion globally which could generate an income of US$ 100 billion annually.<\/p>\n\n\n\n<p>As per the report of The Economist in 2019, globally, US$ 8 trillion was controlled by World Sovereign Wealth Funds (SWF). 25% of the fund, around 2 trillion worth of funds belong to the four Gulf states Wealth funds held by other Muslim countries may reach more than another trillion US Dollars.<\/p>\n\n\n\n<p>In this background, Islamic social finance needs to be taken as a special purpose vehicle to fight against poverty with the collective effort of the global Muslim leadership. Surely it should not be a difficult task to mobilize US$ 100 billion for this project. But this needs Islamic values and Islamic principles of a welfare state replicated on a global scale coming into practice. Until then it will remain a pipe dream.<\/p>\n\n\n\n<p>Read more<a href=\"https:\/\/ethis.co\/blog\/the-development-of-waqf-throughout-the-history-of-islam\/\" target=\"_blank\" rel=\"noopener\" title=\"\"> The Development of Waqf Throughout the History of Islam<\/a><\/p>\n<div class=\"rns\" data-title=\"Role of Islamic Social Finance in Poverty Alleviation\" data-tags=\"\" data-categories=\"Ethis Updates\" data-comments=\"0\" data-date=\"1647910914000\" data-author=\"Hanan Hussain\" data-single=\"\" data-url=\"https:\/\/ethis.co\/blog\/islamic-social-finance-poverty-alleviation\/\"><\/div> <!-- Check out https:\/\/reactandshare.com -->","protected":false},"excerpt":{"rendered":"<p>By Hanan Hussain Islam is a religion of social justice. Quranic verses and the teachings of Prophet Muhammad (\ufdfa) sought to eliminate injustice and poverty &hellip; <span class=\"read-more-link\"><a class=\"read-more\" href=\"https:\/\/ethis.co\/blog\/islamic-social-finance-poverty-alleviation\/\">Read More &rsaquo;<\/a><\/span><\/p>\n","protected":false},"author":69,"featured_media":5375,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":""},"categories":[1],"tags":[],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/03\/911.png","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbDwgm-1oA","_links":{"self":[{"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/posts\/5368"}],"collection":[{"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/users\/69"}],"replies":[{"embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/comments?post=5368"}],"version-history":[{"count":4,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/posts\/5368\/revisions"}],"predecessor-version":[{"id":6438,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/posts\/5368\/revisions\/6438"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/media\/5375"}],"wp:attachment":[{"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/media?parent=5368"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/categories?post=5368"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/tags?post=5368"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}