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Archive for June 3rd, 2012

Some for you: Muslims are required to donate 2.5 percent of their wealth and assets to the poor every year

Posted by African Press International on June 3, 2012

Photo: IRIN
Some for you: Muslims are required to donate 2.5 percent of their wealth and assets to the poor every year

DUBAI, ,Every year, somewhere between US$200 billion and $1 trillion are spent in “mandatory” alms and voluntary charity across the Muslim world, Islamic financial analysts estimate.

At the low end of the estimate, this is 15 times more than global humanitarian aid contributions* in 2011.

With aid from traditional Western donors decreasing in the wake of a global recession, and with about a quarter of the Muslim world living on less than $1.25 a day**, this represents a huge pool of potential in the world of aid funding.

But Islamic finance experts, researchers and development workers say much of the money spent in `zakat’ (mandatory alms) and `sadaqa’ (charity) is mismanaged, wasted or ineffective.

“Wealth is growing in the Muslim world. So is the poverty. Where have we gone wrong?” asks Tariq Cheema, president of the World Congress of Muslim Philanthropists (WCMP), an organization which advises Muslim donors – including some of the thousands of millionaires living in the Gulf – on how to increase sustainability and accountability in their donations.

Islam requires Muslims to give 2.5 percent of their wealth and assets to the poor every year. Much more is given in voluntary `sadaqa’. But that money is usually donated in small amounts at local levels to feed the poor, help orphans, or build mosques. Muslims say many of them give, almost without thinking, to fulfil a religious obligation. “Our rituals are there, but often they lack the spirit,” Cheema told IRIN. “We just give the money and forget.”

Very little of the money goes towards sustainable development.

“Billions of dollars worth of giving in `zakat’ and `sadaqa’ are unfortunately ineffective by and large,” he said. “Our giving shouldn’t be driven by our desire to prove that we are good people… Our giving should be smart and effective.”

“We are here to bring that shift in the culture: the paradigm shift from conventional and generous giving to strategic giving… There is a lot of money around that needs to be channelled towards development.”

Huge potential

In the early years of Islam, `zakat’, `sadaqa’ and `awqaf’( religious endowments) played a large role in society – not only in poverty alleviation, but in the building of infrastructure and provision of social services. In Ottoman times, some Turkish towns were almost entirely based on religious endowments – the real estate donated, with the rent going towards charitable or social ends: educational and health facilities, research institutes, even the lighting of streets. The endowments are credited as one of the reasons for the “Golden Age” of Islamic civilization from the eighth to the 13th centuries.

But due to colonization, the stagnation of Muslim institutions, mismanagement of `awqaf’ and the inability of their laws to adapt to changing times, these charitable traditions lost their central place in the organization of society.

Cheema said many Muslims today do not know how to calculate the amount of `zakat’ they should pay and do not have the channels through which to pay it. Governments collect a very small percentage of what they could.

In 2004, economist Habib Ahmed calculated that if all potential `zakat’ were collected in Muslim countries, between a third and half of them could move their poor out of poverty.***

“The potential is tremendous,” Ahmed, now chair in Islamic Law and Finance at the Institute of Middle Eastern and Islamic Studies at Durham University, told IRIN. “But in most countries, it is not being used to the potential.”

Among the reasons, he said, are that people do not trust governments, who have a history of mismanagement, and prefer to give their money to people they know are in need.

Syed Wafa is a former professor who headed a research group that advised the Malaysian government on distributing `zakat’ funds. He said even Malaysia – one of the most advanced countries in `zakat’ collection – is not strategic in its disbursement of funds.

“The `zakat’ authority does not have a long-term investment plan,” he told IRIN. “They depend on the yearly collection… Their mindset is: We get the funds; we try to disburse them as fast as possible.”

Photo: VladKol/Shutterstock
Aid from traditional Western donors has decreased in the wake of a global recession

Wafa’s recommendation to the government that it disburse `zakat’ funds through loans or micro-credit financing was rejected based on the perception that `zakat’ should, according to religious edict, be owned by the poor, and thus given in the form of direct assistance. In the Malaysian state of Johor, however, the `zakat’ authority allows funds to be spent on student loans for tertiary education.

Feeding the poor and helping orphans are encouraged repeatedly in the Koran and have thus become preferred forms of `zakat’. Building mosques has been a popular form of `sadaqa’, largely due to the Prophet Muhammad’s saying that he who helps build a mosque will have a castle built for him in heaven.

Muslim NGOs have at times struggled to convince donors to support “intangible” activities like capacity-building or empowerment, over these more tangible causes, according to Marie Juul Petersen, a researcher in politics and development at the Danish Institute for International Studies, who wrote her PhD thesis about transnational Muslim NGOs.

“One thing is clear,” said Cheema of WCMP. “Around the Muslim world, there is an increased awareness that if `zakat’ distribution and management is made effective, we can bring revolutions in terms of development – not only for the Muslims, but people around the world.”

Role of government

Many countries have entire ministries of `zakat’ and `awqaf’, but they are mistrusted, ineffective and badly managed, Ahmed said. But as they wake up to the potential of proper `zakat’ management, some governments are making efforts to centralize the process, either directly through government, through non-profit corporations created by the government; or through hybrid systems, where NGOs also play a role in collecting `zakat’.

Malaysia has made great strides: in 2010 it collected 1.4 billion Malaysian ringgit (US$443 million) in `zakat’, up from about $95 million 10 years ago, said Wafa, now head of a Shariah-compliant financial institution called KOPSYA, which finances cooperatives through no-interest loans.

Malaysians who give `zakat’ are given a tax credit. In Pakistan the government deducts `zakat’ on certain categories of assets, with bank account deductions on the first day of Ramadan every year directly deposited in the Central Zakat Fund maintained by the State Bank of Pakistan.

In 2010 the Egyptian government measured, for the first time, the amount of money Egyptians donate to charity, estimating it at about 4.5 billion Egyptian pounds ($745 million) in 2009. Others have made estimates two to four times higher. In strictly financial terms, this government estimate would be enough to pull nearly all of Egypt’s poor out of poverty.****

Donor culture built on religion

Others are also targeting the “charity mentality” at the state level – lobbying governments in the Muslim world, especially the Gulf, to be more strategic with their aid.

“Our [Muslims’] whole donorship was built on religious charity,” said Ibrahim Osman, director of the Middle East and North Africa region for the International Federation of Red Cross and Red Crescent Societies (IFRC). “That has infiltrated even governments and public institutions… Most Muslim countries do handouts, even with international organizations.

“The Arab world has to change from a charity culture to a humanitarian action business,” he told IRIN. “This is what is missing. It’s always charity.”

But observers say that apart from a few notable exceptions, major reform at the government level is unlikely.

''Billions of dollars worth of giving in `zakat’ and `sadaqa’ are unfortunately ineffective by and large…we are here to bring the paradigm shift from conventional and generous giving to strategic giving.''

“We academics talk about the role of `zakat’, but ultimately, if there is no political will at the level of the government, there will not be a structural change which can bring this about,” Habib said.

“It needs a different mindset,” Wafa added. “The ideas have to come from the public.”

Increasingly, it is civil society filling the gap. See IRIN’s list of efforts to make Muslim aid more effective.

The role of NGOs

In Egypt, a start-up social business called Madad is trying to shift the billions of pounds spent in Egypt every year in donations and charity by highlighting those NGOs working towards sustainable development.

“As Muslims, we are raised that you have to pay `zakat’,” said Sameh Awad, head of Madad. “People just go to the poor people and give them money and they feel that they’re fulfilled.

“We are trying to change the culture of giving among the donors,” he told IRIN, encouraging them to take more interest in how the money they give is spent and whether it creates any lasting change.

Muslim NGOs, some of whom get up to 80 percent of their funding from `zakat’ and `sadaqa’, are increasingly turning to sustainable development projects like Islamic (interest-free) micro-finance and livelihood support.

Instead of giving money to individual orphans, some NGOs have tried to support them in more strategic ways, introducing human rights, empowerment and “mainstream aid activities”, Juul Petersen, the researcher, said. Other projects have included developing sermons for imams on children’s rights or training them in disaster preparedness.

“You have these new ideas of how good aid should be,” she told IRIN.

In Egypt, a non-profit organization called Misr al-Kheir, led by the Grand Mufti of Egypt, the highest religious authority in the country, and funded by `zakat’ and `sadaqa’, has been a pioneer in the use of `zakat’ for sustainable ends. Leading by example, the Mufti has made it religiously acceptable to invest `zakat’ in Islamic micro-finance projects and scientific research aimed at improving human development.

Al-Rajhi Bank and Yousef Abdullatif Jameel Co. in Saudi Arabia and Amanah Ikhtiar Malaysia (AIM) are Muslim lending institutions which have attempted to replicate the successes of Grameen bank in Bangladesh.

Several people are also trying to involve the $1 trillion Islamic finance industry in the financing of development, by encouraging Islamic financial institutions to transfer a percentage of their capital towards sustainable livelihoods for the poor, or using Islamic capital market instruments to create `awqaf’.

Sustainable forms of Muslim aid

Historically, `awaqf’ have contributed to sustainable development much more than `zakat’; and Muslims are increasing finding innovative and modern versions of the old tradition, including collective and corporate religious endowments.

In 2009, the Organization for Islamic Cooperation’s Fikh Academy, charged with setting religious laws, passed a resolution evolving the rules around `awaqf’ to make them more flexible, allowing temporary `awaqf’, corporate `awaqf’ (through shares of a company) and `awaqf’ in cash – but regulation is still up to the government in most countries.

Photo: Tom Spender/IRIN
Feeding the poor and helping orphans are encouraged repeatedly in the Koran

NGOs have lobbied Muslim scholars to issue fatwas making it easier for Muslims to give their faith-based charity in non-traditional ways, expanding the forms of acceptable religious charity, reducing waste and increasing sustainability and impact.

In 2007, Egypt’s Grand Mufti pronounced that contributions to a civil society campaign – including fundraising by text message – to open a new children’s cancer hospital would constitute legitimate `zakat’. The hospital, financed completely through donations, is now the second largest in the world dedicated to paediatric cancer care.

Muslim scholars have also allowed `zakat’ to be given towards relief operations, which has made a big difference in responding to humanitarian disasters.

Making the most of Eid

One source of waste, historically, has been during the Eid al-Adha holiday, in which Muslims are encouraged to slaughter an animal and donate the meat to the poor – another industry worth millions, if not billions, of dollars. As a result, millions of sheep are estimated to be slaughtered every year in a span of a few days. On such a scale, the meat cannot always be distributed quickly and efficiently enough.

In 2011, well-known Muslim scholar Yusuf al-Qaradawi approved the canning of meat for distribution abroad at a later point.

Other NGOs, like Muslim Aid and Awqaf New Zealand, are combining the ritual, known as `qurbani’ or `udheya’, with livelihood activities, in which poor farmers rear the animals and sell them to the NGOs during Eid or use other parts of the animal to create revenue.

“We maximize the donation for the best interest of the poor,” said Husain Benyounis, secretary-general of Awqaf New Zealand. “We turn something out of everything they throw away.”

The Koran says the one of the ways in which you can continue being rewarded for your good deeds after you die is by leaving a form of continuous `sadaqa’, a gift that keeps giving. In a Muslim version of “teaching someone how to fish”, the Prophet Muhammad is said to have helped a beggar find a sustainable income, instead of giving him money.

“You find very different interpretations of `zakat’ and `sadaqa’,” Petersen said. “[But] people are increasingly using Islamic discourses to argue for sustainability.”

Still, though the Arab Spring may speed up the process, most observers say it will be years before there is any significant shift.

Awad, the young Egyptian social entrepreneur, believes Egypt’s revolution needs to spread to the civil society sector.

“We need a revolution in all the sectors,” he said. “We need a revolution, not only in leaders, but in the mindset itself.”

But many continue to have hope in the potential offered through `zakat’, `sadaqa’, `awqaf’ and `qurbani’, especially as social media helps raise awareness and change the feedback loop. Sami Yusuf, a Muslim musician whose involvement in the LiveFeed campaign helped raise funds for the World Food Programme, says people just need the right channels to give.

“I think we’re going to be really surprised in the years to come in this part of the world.”


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Norway congratulates Guy Ryder on election as new ILO Director-General

Posted by African Press International on June 3, 2012

On 28 May Guy Ryder, a British citizen, was elected as the new Director-General of the ILO in Geneva. Mr Ryder, who was nominated by worker members of the Governing Body, is currently ILO Executive Director for International Labour Standards and Fundamental Principles and Rights at Work. He has extensive experience, including as General Secretary of the International Trade Union Confederation (ITUC).

“I would like to congratulate Guy Ryder on his election as Director-General of the ILO. The mandate and role of the ILO have become increasingly significant in the light of the global financial crisis. Unemployment rates are high and fundamental rights are under pressure. The ILO is an important organisation for Norway and for safeguarding Norwegian interests. With his focus on reform and commitment to workers’ rights, I believe Mr Ryder will strengthen the ILO, both in political and organisational terms. We are looking forward to cooperating closely with Mr Ryder,” Minister of Foreign Affairs Jonas Gahr Støre commented.

Mr Ryder has played a key role in the ILO’s reform process, and has worked to promote core labour standards in a number of countries. He will begin his term as Director-General in October 2012, taking over from Juan Somavia from Chile, who has led the organisation for 13 years.

The ILO is an important partner for Norway in the field of international development cooperation. Norway supports the ILO’s work at country level through a partnership cooperation agreement with an annual allocation of NOK 40 million. Norway also actively supports the ILO’s efforts to highlight the significance of labour and social issues for development in forums such as the IMF, the World Bank, the UN and the G20.

“I would like to congratulate Guy Ryder on his election. We look forward to working closely with him to promote a global policy that contributes to sustainable development and a more equitable distribution of wealth. The decent work agenda is crucial for development policy, and Norway will support the ILO’s efforts in this area,” Minister of International Development Heikki Holmås said.

With its four strategic objectives of creating jobs, guaranteeing rights at work, extending social protection and promoting social dialogue, the ILO’s decent work agenda provides guidance and tools for promoting more equitable globalisation and job-driven growth. The ILO focuses particularly on growing unemployment, especially youth unemployment. It has emphasised that recovery strategies following the financial crisis must involve job creation, and that growth without jobs is not sustainable.

The ILO is a specialised agency of the UN, but unlike other UN agencies it has a tripartite structure, with government, employer and worker representatives, all of whom are full members and have decision-making authority.




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Taylor’s stiff sentence of 50 years will bring justice to African people in the long run

Posted by African Press International on June 3, 2012

Former Liberian president Charles Taylor’s sentence will now open eyes in African leadership. Many African leaders, for many years now, have ruled their countries with impunity and without care of the population’s needs.

Scandals has been the order of the day and with a fifty years sentence handed on Taylor, the former President of Liberia, this will serve as a warning to leaders who are dictators. They will be held responsible should they continue to enrich themselves and kill their people.

Sudan’s president Al Bashir is now being hunted and may face a long time in jail if he is netted by the long arm of the international law.

Gbagbo, the former President of Ivory Coast, now locked up at the international Criminal Court in the Hague will most probably get 20 years if found guilty of committing atrocities as has been accused.

He was deposed by soldiers who supported his the competitor, now President with the help of the French troops, and later handed over to the ICC.



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