Presented at Zakat, Waq and Management of Sadaqat class

1. question Disscuss the conception and classification of material poverty from Islamic perspective and elaborate the view that it is not possible to eliminate its existence even in Islamic economic system.

3. Poverty in Islamic sources

4. Islamic understanding of poverty

5. Classification of poverty

6. Causes of Poverty

7. Towards the establishment of poverty reduction strategies

8. Muslims amongst world’s poorest

10. Conception of Poverty (Cont.) These objectives require the provision of basic human needs so that people may not be obliged to cross the limits of religion and morality (Al-Qaradawi 1393H). Indeed, the Prophet (P.B.U.H) linked poverty to unbelief by saying, “Poverty is almost like unbelief in God”( Abu Na’im in Al Hilyah, Al Bayhaqi and Al Tabarani) Islam looks upon poverty as a religious and social problem, which pushes a person to lowliness, sin and crime (Al-Abdin 1997). That is why the Prophet (P.B.U.H) sought the refuge of Allah from it by saying “O Allah ,I seek your refuge from poverty ,insufficiencyand lowliness”.(Abu Dawud ,Al Nissa’I, IbnMajah and Al Hakim)

11. Poverty in islamic sources The terms fakr, fakirand plural form fukaraare mentioned in the Qur’an twelve times. When these verses are examined, it is seen that two speak of “spiritual poverty.” (The Quran) The remaining verses are related to “material poverty” and mean helping, protecting, and sheltering poor people. (The Quran) In these verses, those who are not rich have material needs and require other peoples’ help. Thus, it is seen that the majority of verses deal with material poverty. The words for poverty in the hadiths are generally used in the same way. There are many hadiths related to poverty and the poor and these hadiths mainly refer to “material poverty” as it is in the Qur’an.

12. Islamic understanding of poverty A group of people called “zuhhad” affected mostly by foreign cultures such as Iranian and Indian emerged that advocated withdrawal from food and worldly goods. Later, this current of thought found a place for itself in the area of tasawuf and deeply affected the entire Islamic world.(Studies in Islam and the Middle East journal [SIME], January 2005 by Osman GÜNER) Islam does not have any negative attitudes towards property; instead it places great value on prosperity as long as it is used properly. Again, Islam basically does not see poverty as a virtue, but as a social anomaly that must be alleviated, and a situation from which a Muslim should pray to Allah to be protected from its consequences. (Studies in Islam and the Middle East journal [SIME], January 2005 by Osman GÜNER)

13. Islamic understanding of poverty (Cont.) This understanding has become an important threat to the political and economic independency of Muslim communities. (Studies in Islam and the Middle East journal [SIME], January 2005 by Osman GÜNER)

14. Classification of poverty Poverty can be interrelated to two basic classifications of poor, which are faqir who are the needy, and miskin who are the poor, as identified and understood in Islam. Faqir:someone who can only satisfy less than half of his basic necessities Miskin: a poor man who can satisfy half or more of his basic necessities, but is still below the minimum requirement of basic necessities required. (Significance of Islamic Economy Towards poverty Alleviation, Mohd. Ma’sumBillah)

15. Classification of poverty (Cont.) In another classification there are three distinct concepts of poverty: Absolute poverty: inability to attain a minimal standard of living (WB, 1990a: 26). It, thus, tends to emphasize the notion of subsistence: the attainment of which is necessary for existence, i.e. survival. Relative poverty: identifies the poor relative to other segments of the society, i.e. relative to a comparator group. Thus, has much to do with the issue of inequality (income and wealth distribution. Subjective poverty: is a self-defined concept and it reflects the attitude and perception of a person towards what is regarded as minimum to meet basic needs, i.e. it compares “actual income against the earner's expectations and perceptions” (WB, ibid:67).

16. Causes of poverty Many different factors have been cited to explain why poverty occurs. However, no single explanation has gained universal acceptance at all. The factors that have been alleged to cause poverty include the following: State discrimination and corruption. Abuse of public power. Lack of social integration. Competition instead of cooperation. Crime. Natural factors such as climate or environment. Historical factors, for example imperialism and colonialism.

17. Causes of poverty Overpopulation. Note that population growth slows or even become negative as poverty is reduced due to the demographic transition. War, including civil war, genocide, bullying, etc. Lack of education and skills. Individual beliefs, actions and choices. Mental diseases, such as Autism, and Schizophrenia. Excessive materialism (www.solarnavigator.net/poverty.htm by Nelson Kruschandl)

18. The anti-poverty strategy of the World Bank Though debatable this strategy depends heavily on reducing poverty through the promotion of economic growth. The World Bank argues that an overview of many studies show that: Growth is fundamental for poverty reduction. Growth accompanied by progressive distributional change is better than growth alone. High initial income inequality is a brake on poverty reduction. Poverty itself is also likely to be a barrier for poverty reduction; and wealth inequality seems to predict lower future growth rates. (www.worldbank.org/poverty)

19. Towards the establishment of poverty reduction strategies In September 1999, the Annual Meetings of the WB and the IMF saw the development of the notion of “Poverty Reduction Strategy Papers (PRSPs)”, which resulted from an agreement that each country must have a nationally-owned participatory poverty reduction strategy programme (PRSP) as a basis for all WB and IMF concessional lending and debt relief. (UN NGLS (2002).)

20. The United Nations Millennium Summit in September 2000 has produced what are known as the ‘Millennium Development Goals’ (MDGs). The first of the MDGs is to eradicate extreme poverty and hunger by halving, between 1990 and 2015, the proportion of people whose income is less than one dollar a day and the proportion of those who suffer from hunger. (UN NGLS (2002) Towards the establishment of poverty reduction strategies (Cont.)

21. Towards the establishment of poverty reduction strategies (Cont.) For fourteen centuries, however, Islam has been calling on people to fight poverty at all levels via many voluntary and compulsory measures, both financial and non-financial. In 1996 the Islamic Development Bank (IDB) published its “Strategic Agenda for theMedium-Term: Priorities and Main Operational Aspect” with poverty alleviation and human resource development as two of the key five development themes. This coincided with the declaration of “1996 the International Year for the Eradication of Poverty” by the General Assembly of the United Nations. The Bank is, therefore, renewing its commitment to support its member countries in achieving their socioeconomic development goals.

22. . Towards the establishment of poverty reduction strategies (Cont.) Only East and South Asia regions (but not necessarily all the countries in these regions) are expected to reduce poverty by half in 2015; meaning that all developing regions have lost momentum in achieving their poverty goals. (THE CHALLENGES OF POVERTY ALLEVIATION IN IDB MEMBER COUNTRIES Dr. SiddigAbdelmageedSalih 1999)

23. Muslims amongst world’s poorest The combined annual GDP of 57 Muslim countries remains under $2 trillion. America, just by herself, produces goods and services worth $10.4 trillion; China $5.7 trillion, Japan $3.5 trillion and Germany $2.1 trillion. Even India’s GDP is estimated at over $3 trillion (purchasing power parity basis). Muslims are 22 percent of the world population and produce less than 5 percent of global GDP. The world’s poorest countries include many Muslim countries. (Dr FarrukhSaleem, 2005)

24. The empirical findings confirm the widely held view that the magnitude of poverty in the Muslim world is high, if not the highest in the world. (THE CHALLENGES OF POVERTY ALLEVIATION IN IDB MEMBER COUNTRIES Dr. SiddigAbdelmageedSalih, 1999) Even in Islamic Economic system Poverty cannot be eliminated because there is either: Unavailability of poverty alleviation strategies Failure to implement these strategies why poverty cannot be eliminated?

25. why poverty cannot be eliminated? (Cont.) These strategies consist of elements, these including: Economic Growth, Income Distribution, Investment in human Capital and the development of sociopolitical institutions and arrangements dealing with the poor. These elements, although interrelated, could have different impacts in the long-term and in the immediate and short-terms, on the sustainable reduction of chronic, transitory and other types of poverty.

26. why poverty cannot be eliminated? (Cont.) 1. Investment in human Capital: Social investments (in education, health and social security) can reduce poverty by improving the productivity and health of all people, particularly the poor. 2. Economic Growth: Reading through the United Nations Human Development Reports, countries that were able to achieve a sustainable reduction in poverty are those that achieved sustained levels of economic growth and development. Notable examples are Korea, Malaysia, and Singapore among others in which poverty has been reduced to below 15%. (ELIMINATION OF POVERTY: CHALLENGES AND ISLAMIC STRATEGIES ISMAIL SIRAGELDIN*, 2000)

27. why poverty cannot be eliminated? (Cont.) 3.Distribution: Development experience suggests that a highly unequal income distribution makes it harder to reduce poverty (Demery and Walton 1997) That is, incidence of poverty is a function of both economic growth and income distribution. The establishment of an equitable distribution system calls for certain governmental functions. This will overlap to other factors such as investment in human capital and development of sociopolitical institutions.

28. why poverty cannot be eliminated? (Cont.) 4. Development of sociopolitical institutions: In the prevailing political economy of the time, government role should be conducive to sustaining broad-based economic growth, equity and social progress. Poor governance and market failure are two aspects, which should be properly addressed to attain justice in the economic activities, which will help in poverty eradication. (Norbainibt. Abdul. An Islamic view on poverty : a preliminary study (1993) International Islamic University, Petaling Jaya)

29. why poverty cannot be eliminated? (Cont.) The institutions of Zakat, sadaqatulfitr, inheritance, waqf etc. come under this category. In these cases, one has to dispose one’s wealth to one’s fellow-beings whereby have-nots become better off. Mutual gifts, endowments and other optional charities, on which Islam places a heavy emphasis, also reduce the disparity between the haves and the have-nots of society (Detail information on, AbulKhairMohdJalaluddin, The Theory of Distribution in Islam)

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