The Economy and Sustainable Development: The Tools of Religion in the Face of Poverty
Abdelghni Elamoumri
Faculty of Legal, Economic and Social Sciences, Sidi Mohamed Ben Abdellah University, Fez, Morocco Tel : 00212762848782 Email : abdelghnielamoumri@gmail.com
Introduction
Poverty is a global scourge, fuelled by financial crises, as well as the result of historical heritage and climatic hazards. According to the United Nations, 575 million people will still live in extreme poverty and only a third of countries will have halved their national poverty level by 2030. Despite the expansion of social protection during the COVID-19 crisis, more than 4 billion people are still unprotected. Worldwide, many vulnerable population groups, including young and old, remain uncovered by legal social protection programmes.
The share of public spending on essential services, such as education, health, and social protection, is significantly higher in advanced economies than in emerging and developing economies. Poverty persists because of the domination of the capitalist and liberal economy, which is in most cases based on misery and ignorance of the rights of the poor. Without entering into the debate on the economic and social shortcomings of liberalism as it is applied, especially in developing countries. This article aims to take a look at the principles and tools of Islam in the face of poverty, or the social aspect of religion. In doing so, we will first examine the economic and social principles of Islam, then its tools in dealing with poverty.
Section 1: The Principles of Economics in Islam
The analysis of the texts of the Shari’a reveals the predominance of two fundamental principles in almost all the legislation of Muslims, although they are not currently applied institutionally, but they have their origin in the Holy Qur’an, and in the practice of the Prophet, peace and blessings be upon him, as well as to the caliphs after him. These principles are: Justice, and Charity or Beneficence. Justice and economic charity are general principles laid down by the Qur’an and the Sunnah (quotations from the Prophet). The god says : « Verily, Allâh enjoins Al-‘Adl (justice and worshipping none but Allâh Alone-Islamic Monotheism) and Al-Ihsân( to be patient in performing your duties to Allâh, Totally for Allâh’s sake and in accordance with the Sunnah (Legal ways) of the prophet in a perfect manner.[1] According to AL Saadi: The justice that God has ordained includes justice against him and his servants through the fulfillment of financial and physical rights. Justice is obligatory, and benevolence is a desirable virtue.[2]
If economic justice is a universal principle, then how does the Muslim economy provide for measures that safeguard the rights of all citizens, especially the poor? even more, is justice alone enough to guarantee a better life for the poor, or is charity needed?
To answer these questions, we will first deal with the principles of public economics, then private economics.
Sub-section 1: Justice and charity in the public sector
Public finances, as they are organized today, consist of two parts: public revenue and expenditure.
- Government revenue
Government revenue is mainly made up of taxes, which can be considered as a means of financing government expenditure. The main remark that can be drawn from the application of the tax is that it does not exempt anyone, even the poor and needy, Article 39 of the Moroccan Constitution provides that « All shall bear, in proportion to their ability to contribute, the public burdens which only the law may, in the forms provided for in this Constitution, create and distribute »[3].
While the poor are relatively exempt from income tax and corporation tax, they do pay VAT (value-added tax). The principle of fiscal justice assumes that taxation exists where there are goods, if the poor have no property, then they pay neither tax nor tax. Fiscal capacity is poorly determined by the positive economy. On the other hand, in Islam, it begins after acquiring the essential needs, the god says : « And they ask you what they should spend. Say, “The excess [beyond needs] ».[4]
According to al-Tabari: The surplus is what remains after necessary expenditures. This means that there is a threshold below which no tax liability is due.
- Public spending.
If the poor do not owe any contribution to the state, according to the principle of fiscal justice. On the contrary, according to the principle of charity, they receive a portion of the public expenditure under the name of the welfare state. But this portion is not governed in a way that allows poverty to be financed permanently, it is periodic and random. On the other hand, charity in Islam in terms of spending on a few social categories is obligatory under the name of ZAKAT. Almighty God has said : « Take, [O Muḥammad], from their wealth a charity by which you purify them and cause them increase »[5].
ZAKAT or obligatory charity is not a general financial source for the state that can be spent indiscriminately, it is reserved only for certain categories listed in the Qur’an and their like according to jurisprudence, the Almighty says: « Zakāh expenditures are only for the poor and for the needy and for those employed for it[487] and for bringing hearts together [for Islām] and for freeing captives [or slaves] and for those in debt and for the cause of Allāh and for the [stranded] traveler – an obligation [imposed] by Allāh. And Allāh is Knowing and Wise »[6].
The social scope of ZAKAT affects not only poverty but also other cases, including debt problems, especially commercial debts, which are one of the problems that exhaust the state and public finances.
In conclusion, Islam provides for a fixed part of the public revenue called ZAKAT for the benefit of only the categories set out in the Qur’an and their similar according to the jurisprudence of the scholars.
Sub-section 2: Economic Justice and Charity in the Private Sector
Economic justice in the private sector is manifested in the equality of transactions among Muslims. The equality of transactions presupposes a balance in onerous contracts; sales; rental; or work. The god says: « O you who have believed, do not consume one another’s wealth unjustly[179] but only [in lawful] business by mutual consent »[7].
But, unfortunately today, in practice, especially in the field of work, with the abundance of labor in developing countries, the poor never acquire the ability to negotiate employment contracts, they accept under the pressure of social conditions to work even below the GMW[8] and GMAW[9], and without enjoying social and health protection rights, especially for women.[10]
The International Labour Organization shows that in 2017, extreme in-work poverty remained very common, with more than 300 million workers having a household standard of living of less than $1.9 per person per day in emerging and developing countries. Overall, progress in reducing in-work poverty is too slow to keep pace with labour force growth in developing countries, where the number of extremely poor workers is expected to exceed 114 million in 2018, or 40 per cent of all employed people.[11]
The crises of capitalism have prompted some authors to think of new regulatory tools, especially a high rate of employment and an acceptable distribution of wealth. Also, loans are considered to be the main cause of the bubble in the market, especially in real estate. According to some, the right capitalist is to find the right balance between the market, the state and society. Financial capitalism needs more government again on many points.[12]
This shows the failure of liberalism and of course the Koran confirmed it many centuries ago that the relations of the poor with the rich will end up crushing their rights, the god says « No! [But] indeed, man transgresses Because he sees himself self-sufficient ».[13] The Almighty also says: «And as for man, when his Lord tries him and [thus] is generous to him and favors him, he says, “My Lord has honored me, But when He tries him and restricts his provision, he says, “My Lord has humiliated me, No! But you do not honor the orphan, And you do not encourage one another to feed the poor, And you consume inheritance, devouring [it] altogether, And you love wealth with immense love.[14]
From these Qur’anic verses it is concluded that greed is innate in human beings and must be monitored by the state, especially in employer/employee relations.
Section 2: The Tools of Islam in the Face of Poverty
After seeing that financial relations in Islam are based on equality, and the intervention of the state [15] is necessary to establish them. But this principle of equality alone is not enough to guarantee the dignity of certain cases, which is why the god asked their lord to be benefactors, the almighty god says « and [yet], do not forget your share of the world. And do good as Allāh has done good to you »[16]. And says else : « For them who have done good is the best [reward] – and extra. ».[17]
The analysis of the religious texts and practices of the prophet and the caliphs shows the existence of two types of charity, obligatory and optional.
Sub-section 1: Obligatory charity (ZAKAT)
According to the principle of equality, the poor are neither debtors nor creditors, but according to the principle of beneficence enacted only by Islam in the word of the Almighty « Zakāh expenditures are only for the poor and for the needy … »[18], they are creditors to the whole society through what is called ZAKAT. The Qur’an calls it (SADAQA), i.e. charity, because it is not bound by an individual contract, but by Islam and by the order of the god.
There are two types of zakat, zakat as a levy on wealth, and zakat and zakat al-fitr which is considered as alms at the end of the fast.
- ZAKAT on goods
In the Arabic language, ZAKAT means increase, rise and righteousness. And in economic language, it can be defined as the amount of money that goes to the poor.[19]
Zakat is levied on all kinds of goods acquired by natural or legal persons, money, goods, livestock, and agricultural products, provided that they reach an amount set by religion. ZAKAT is a right only of those who are mentioned by the Qur’an in the following verse : « Zakāh expenditures are only for the poor and for the needy and for those employed for it[487] and for bringing hearts together [for Islām] and for freeing captives [or slaves] and for those in debt and for the cause of Allāh and for the [stranded] traveler – an obligation [imposed] by Allāh. And Allāh is Knowing and Wise»[20].
It should be noted that ZAKAT is not a financing of other state expenditures, it is reserved only for the categories set out in the Qur’an. The most common cases today that require ZAKAT are the poor and debtors.
The distribution will be made according to the situation and in the same territory or region of its collection. And if there is a surplus, it can be moved to other regions.[21]
ZAKAT is a permanent source, which can guarantee a stable way to combat poverty and reduce social inequalities. It should be noted that Zakat is different from taxation and that one cannot replace the other, because their purposes are not similar, because taxation is a duty to finance state expenditure, and Zakat is a duty to finance social solidarity in the cases listed in the Qur’an. Malaysia is considered among the most successful countries in managing ZAKAT by transferring its collection to the private sector. It has been able to make a significant change in poverty reduction with successive improvements to this institution. The poverty rate has fallen from 52.4% in 1970 to 0.3% in 2021.[22]
- ZAKAT AL-FITR
Among the means put in place by religion, which are strictly available to combat poverty, we can mention ZAKAT AL-FITR which is an obligatory alms paid at the end of Ramadan, intended to purify the fasting person by expiating minor sins committed during the month. It also helps the poor by providing them with financial or food support.
Sub-section 2: Optional charity
Islam has made available to society several means of charity in favor of the poor and the diminished, these are called voluntary contributions. Among them are: AL WAQF and SADAQA
- AL WAQF
Waqaf is a verb in Arabic that literally means “stop”, “stop” or “stand still”. Al Waqf is a name that describes the condition of holding back or preventing something from moving [23].In this sense, Al Waqf as a concept refers to any property that is kept intact, for example, a good old olive tree that you do not have permission to move, transfer, sell or uproot; yet you can harvest his olives to feed others. In doing so, you need to make sure that the olive tree will live, grow, and reproduce so that you can give more olives in perpetuity. Al Waqf is like this investment in the basic capital, so that it generates profits for maximum benefits for humanity.[24]
The Waqf (hereafter called Waqf) is one of the models of giving that has its origins in Islamic teachings, especially through the words and stories of the Prophet Muhammad and his companions. It is a form of voluntary giving that incorporates the concept of perpetuity into its very essence. The Waqf is translated in religious texts as “sadaqa jariyah”, which means perpetual and legitimate giving. Perpetuity and legitimacy are the fundamental principles and values of the Waqf. Thus, the Waqf describes any flow of donations that continues indefinitely to fund or support a good cause.[25]
In Morocco, since 1955, the Waqf has been managed by the Ministry of Endowments and Islamic Affairs15. Aware of the importance of the Waqf as a social and human value of solidarity, the ministry has undertaken profound reforms to modernize the sector to support the changes in Moroccan society. Thus, new structures have been created and others, which have become obsolete, have been abolished.
The Ministry of Endowments is considered the richest department in Morocco. In 2010, there were 80,000 hectares of agricultural land and 48,000 properties divided into residential and commercial premises. In terms of the return on Waqf properties managed by the Ministry of Endowments, the annual report of the Ministry of Endowments and Islamic Affairs for the year 2013 highlights that the rent of agricultural land reaches 70,305,817 dirhams; The income from agricultural rentals reached 54,238,820 dirhams and the income received from the sale of crops reached 16,066,997 dirhams. Moreover, nearly 52,879 units are divided between residential housing (26.45%), empty land (1.65%) and shops intended for commerce (51.5%). By integrating new modern management techniques involving private sector partners, the income from Waqf properties increased by a remarkable 65% between 2005 and 2013, from 18 per cent to 18 per cent.[26]
B-SADAQA
The term “Sadaqa” is derived from the Arabic root “”sadq” or “sidq”, which literally means “to speak the truth or to be sincere”. However, in the context of Islamic jurisprudence, the term “Sadaqah” is technically defined as a gift given to the poor for God’s sake or to obtain rewards from God. SADAKAH has its origins in several verses of the Qur’an, for example: The almighty god says : « Righteousness is not that you turn your faces toward the east or the west, but [true] righteousness is [in] one who believes in Allāh, the Last Day, the angels, the Book, and the prophets and gives wealth, in spite of love for it, to relatives, orphans, the needy, the traveler, those who ask [for help], and for freeing slaves; [and who] establishes prayer and gives zakāh; [those who] fulfill their promise when they promise; and [those who] are patient in poverty and hardship and during battle. Those are the ones who have been true, and it is those who are the righteous»[27]. According to AL MAWARDI: “Pious kindness does not consist only in performing prayers, but in charity, even if it is out of fear of poverty, it is a sign of sincerity of faith and piety [28].
- The Almighty also says: « This is the Book about which there is no doubt, a guidance for those conscious of Allāh, Who believe in the unseen, establish prayer,and spend out of what We have provided for them »[29]. The truly pious ones, those who devote part of their income whenever society needs it.
In conclusion, the justice and charity decreed by Islam consist in entrusting the poor with a special status, keeping their rights to exemption from all types of taxes, and protecting them from the greed of employers by ensuring wages that preserve their dignities. In addition to the principle of justice, there is the principle of obligatory charity called ZAKAT, the practice of which in some countries has shown its success in radically fighting poverty. As for optional charity, it is manifested in several tools, notably in the WAQF and SADAQA. It should be noted that the principles of Islam to fight poverty find difficulties in administration and organization and application because of the modern state system widespread in almost all countries, even in the developing world, which constitutes a great challenge for governments.
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[1]– Sûrah An-NAHL: 90. Translation of the meaning of THE NOBLE QUR’ÂN IN THE ENGLISH LANGUAGE by dr. Muhammad TaqÎ-ud-DÎn-al-HilâlÎ, and dr. Muhammad Muhsin Khân, King Fahd Complex For The printing Of The Holy Qur’ân, 2021Complexe Roi Fahd, p307.
[2]– Al Saadi, Taysir Al-Karim Al-Rahman in the interpretation of the words d’Al-Mannan, al rissala, edition 1420/2000, p447.
[3]– Article 39 of the 2011 Moroccan Constitution, Dahir No. 1-11-91 of 27 Shaaban 1432 (29 July 2011).
[4]– Sûrat AL-BAQARAH : 219.
[5]– Sûrah AT-TAWBAH : 103.
[6] – Sûrah AT-ATAWBAH :60.
[7]– Sûrah AN-NISA : 29.
[8] – guaranteed minimum wage.
[9] – guaranteed minimum agricultural wage.
[10] – International Labour Organization, Least Developed Countries, Crisis, Structural Transformation and the Future of Work, 2022, p12.
[11] – International Labour Organization, Employment and Social Affairs in the World, 2018, P1.
[12]– Sebastian Dullien et autres, Le bon capitalisme, 2010, p4.
[13]– Sûrah AL-ALAQ : 6-7.
[14] – Sûrah AL-FAJR : 15-20.
[15]– Abdul hâdi Cafouri, Islam and Economy, Reflection on the Fundamental Principles of Islamic Economy, Librairie de l’Orient, 2000, p320.
[16] – Sûrah AL-QASAS : 77.
[17] – Sûrah YUNUS : 26.
[18]– Sûrah AT-TAWBAH : 60
[19] – El-Mutarrizi, El-Mugrib fi Tertibi’l-Mu’rib, DAR AL KITAB AL ARABI, p209.
[20] – Sûrah AT-ATAWBAH :60.
[21] – Al-Maawardi, Al-Ahkaam as-Sultaaniyyah, DAR AL HADITT, 1431, p197.
[22]– Mohamed Saad abou foutouh, Impact of ZAKAT on the poverty rate, ACHCHOROUk Journal of Commercial Sciences, n 16, 2024, p23.
[23] – Ministère des AWQAF et des Affaires Islamiques, Al-Mawsu’ah Al-Fiqhiyah Al-Kuwaitiyah, 3eme édition, dar slassil koweit 44/108.
[24] – Trust Africa, AL Waqf : A Divine Marketing Strategy for Perpetual Generosity, 2024, p1.
[25]– Lbid, p2.
[26] – Ali Karzazi, Waqf and Zakat, from the Charitable Role to the Financing of Sustainable Development, TAKAMUL Centre for Studies and Research, 2021, p11.
[27] – Sûrah AL-BAQARAH :177.
[28]– AL MAWARDI, AL-NUKAT WAL WUYUN, Dar AL Koutoub ilmya, 1431, 1/225.
[29] – Sûrah AL-BAQARAH : 2-3.