An online resource on the topic of Debt in the developing world countries with an Islamic perspective. Produced by Islamic Relief and Jubliee Debt Campaign.

1. Debt and Islam

2. World debt Copyright © Islamic Relief 2010

3. The debt of the world’s poorest countries is estimated to be $3.4 trillion (2007 estimate). ($3,400,000,000,000) Copyright © Islamic Relief 2010 World debt

4. Loans have been provided to dictators or oppressive regimes by lenders who knew they would never reach the people or projects for which it was intended. Copyright © Islamic Relief 2010 Much of this debt has been termed ‘unjust’. World debt

5. Copyright © Islamic Relief 2010 What is an Islamic perspective on world debt?

6. For Muslims, there are strong and clear faith-based reasons for supporting debt cancellation. Copyright © Islamic Relief 2010 What is an Islamic perspective on world debt?

7. : Fair and equitable distribution of wealth. Protection of the weak against economic exploitation. Providing the poor with basic needs for life. Copyright © Islamic Relief 2010 Islamic teachings advocate

8. Copyright © Islamic Relief 2010 ‘ Wealth should not circulate between the rich amongst you.’ (Qur’an 59:7) What does the Qur’an teach us about the distribution of wealth?

9. Muslims are called to speak out against inequality and poverty , advocating on behalf of the poor and oppressed . Copyright © Islamic Relief 2010 The concept of social justice is paramount in Islam

10. Copyright © Islamic Relief 2010 A Muslim is encouraged towards charitable behaviour to his or her neighbour, irrespective of that neighbour’s religion. The concept of social justice is paramount in Islam

11. Copyright © Islamic Relief 2010 ‘ He who sleeps on a full stomach whilst his neighbour goes hungry is not one of us.’ Prophet Muhammad (peace be upon him) said:

12. Over a fifth of humanity is Muslim. Millions of those who suffer from poverty are themselves Muslim. Muslims make up a global community which has a great capacity to address the injustice of global poverty. Copyright © Islamic Relief 2010 Why should Muslims get involved in the campaign for debt relief?

13. Copyright © Islamic Relief 2010 Throughout history, Islam has made a dynamic contribution to civilisation. Muslims believe their faith has much to offer in helping to face the challenges of today. Why should Muslims get involved in the campaign for debt relief?

14. Copyright © Islamic Relief 2010 What are the effects of debt on poor countries?

15. Often more is spent by poor countries on debt repayments than on basic public services such as healthcare or education. Copyright © Islamic Relief 2010 The debt crisis has caused the world’s poorest countries to be trapped in a cycle of poverty.

16. Copyright © Islamic Relief 2010 Indebted countries are unable to invest in: Provision of safe drinking water Preservation of precious environmental resources HIV prevention and treatment Child immunisation Education

17. Copyright © Islamic Relief 2010 Total developing country debt service is $1.5 billion per day (2007 estimate).

18. The answer lies in the interest that they have to service on their debt. Copyright © Islamic Relief 2010 Why are poor countries having to make such large payments?

19. Copyright © Islamic Relief 2010 What role does interest play in the global debt crisis?

20. Poor nations borrow money as they have no other way out of poverty. As the lender adds interest to their loans, the debt swells over time. This widens the gap between poor nations and richer nations. Copyright © Islamic Relief 2010 What role does interest play in the global debt crisis?

21. In debt negotiations, lenders usually join together, whilst borrowers are usually refused this option. Poor countries are left with less bargaining power. This leaves them open to economic exploitation. Copyright © Islamic Relief 2010 Currently, lenders and borrowers have unequal negotiating power.

22. Many developing countries borrowed money in the 1970s when interest was very low. In the early 80s interest rates were raised. Copyright © Islamic Relief 2010 Great interest rates mean that countries are paying back many times what they originally borrowed.

23. Copyright © Islamic Relief 2010 What is an Islamic perspective on interest?

24. Copyright © Islamic Relief 2010 Excess interest leads to the concentration of wealth in the hands of the few. The prohibition of interest in Islam is a means to establish justice between the lender and the borrower. Islam considers interest to be unjust and exploitative and as such, prohibits it.

25. What does the Qur’an teach us about interest? ‘ If the debtor is in difficulty, grant him time till it is easy for him to repay. But if you remit it by way of charity, that is best for you if only you knew .’ (Qur’an 2:280) Copyright © Islamic Relief 2010

26. Copyright © Islamic Relief 2010 Money lending should be undertaken on the basis of ‘equitable risk sharing’. This means that both parties share in the reward, or the failure of the investment. It is the obligation of the lender to provide loans in a responsible manner and not overburden the borrower. Islam encourages ethical money lending.

27. If someone is genuinely unable to make a debt payment: Islam calls upon the lender to wait until such a time as the loan can be repaid. There should be no penalty for late payment. Copyright © Islamic Relief 2010 Islam supports full debt cancellation.

28. For those unable to repay a loan, Islam encourages the lender to forgive the remainder of the loan. With regard to heavily indebted countries, Islamic thinking would call for interest that has already been paid to count towards the original loan repayment. Copyright © Islamic Relief 2010 Islam supports full debt cancellation.

29. What does the Qur’an teach us about interest? ‘ Allah will deprive usury of all blessing, but will give increase for deeds of charity.’ (Qur’an 2:276) Copyright © Islamic Relief 2010

30. Copyright © Islamic Relief 2010 Debt relief works!

31. Copyright © Islamic Relief 2010 The case of Burkina Faso Since it has been granted debt relief, Burkina Faso has been able to: Improve healthcare Improve education Provide access to safe drinking water As part of the fight against Aids, Burkina Faso has been able to reduce the cost of Anti retroviral drugs by between 38 and 96 per cent. The case of Burkina Faso

32. Copyright © Islamic Relief 2010 Reflect on your individual and global responsibility

33. Many indebted countries are unable to repay the interest on their loans, let alone repay the loan itself. Their debt burden and subsequent poverty must be relieved. Copyright © Islamic Relief 2010 Support debt cancellation!

34. • Sign a petition or postcard • Write to your MP • Stay informed Copyright © Islamic Relief 2010 What can you do? Get active... spread the word about debt relief! Petitions and postcards available from the Jubilee Debt Campaign website: www.jubileedebtcampaign.org.uk/resources

35. www.jubileedebtcampaign.org.uk www.islamic-relief.org.uk

36. Acknowledgements Debt and Islam An introduction to an Islamic perspective on the world debt crisis. Suitable for all ages. Written and produced by: Nick Dearden, Jubilee Debt Campaign, and Samia Ahmed, Senior Development Education Coordinator, Islamic Relief Creative production: Sarah Kilou, Development Education, Islamic Relief Credits Photographs: Islamic Relief Worldwide Copyright © Islamic Relief 2010

37. Biographies Copyright © Islamic Relief 2010 Samia Ahmed is the Senior Development Education Coordinator at Islamic Relief. Samia has had various leadership and management roles as well as experience of teaching Key Stage 2 national curriculum subjects in an independent primary school. She has a Masters in Islamic Studies and is currently learning Classical Sciences in Islam from a London based scholar, as well as being involved in educational projects in London. She has also written and published two children’s books from the Bilal’s Day Out series. Sarah Kilou is a researcher and writer for Islamic Relief’s Development Education Department. She has experience of the development education sector, having compiled and produced a series of online resources on Islam and international development.