ISLAMABAD: Using networks of religious places, including mosques, as a “social capital tool” can enhance the impact of social assistance programs in the post-pandemic era, according to an economics professor.
“This is because mosques are places where community members always come together,” Habib Ahmed, the Sharjah chair in Islamic law and finance at the UK’s Durham University, told Anadolu Agency.
He cited the Akhuwat Foundation in Pakistan as an example of a “successful model of social assistance.”
Founded in 2003, the non-profit organisation is based in Lahore and aims to “create a poverty-free society.”
“The key thing about Akhuwat is that it uses religious institutions such as mosques and churches as bases or places where they do the transactions,” Ahmed said.
Identifying the “right beneficiaries” remains a critical issue in social assistance programs, he said, suggesting a possible solution could be to link these programs with imams or muezzins — Muslim prayer leaders.
‘MORE OBLIGATED TO PAY BACK LOANS TO A MOSQUE’
Ahmed, who is also an economics professor, delved into a report by the Committee for Economic and Commercial Cooperation (COMCEC) on how to bolster social assistance programs in a post-pandemic world.
COMCEC, one of the four standing committees of the Organisation of Islamic Cooperation (OIC), held a meeting in Istanbul last month to devise strategies to strengthen the economies of the 57-member bloc.
“Uncertainties will continue … due to the geopolitical situation around us; there is supply chain disruption and also the ongoing climate-related crisis which will create more poverty, and lot of people will be vulnerable to these risks,” Ahmed warned.
He said the COMCEC report suggests introducing “integrated information systems that can help enhance the impact of social assistance programs.”
“To identify the right beneficiaries is very difficult (for a government) because they do not have the infrastructure, and the key thing is that, in a changing situation, this data input has to be dynamic,” he said, adding that he suggested using “the network of mosques as a social capital tool.”
“Data collected in mosques by imams can be submitted to the information system so that the government can make the decision of who to finance,” he explained.
“So that is, in some ways, a good example where mosques are used to provide interest-free loans to people, and because this transaction takes place in a mosque, there is a social capital which comes with it.”
An additional benefit, Ahmed said, is that people getting a loan in a mosque “feel more obligated to pay it back.”
“The repayment rate of these interest-free loans, which require two guarantors from the community, is more than 99 percent,” he added.
‘BUILDING TRUST TO GENERATE ADDITIONAL SOURCES OF FUNDING’
Ahmed said OIC member states should also use zakat, the mandatory Islamic donation to charity, and sadaqah, voluntary giving, as “additional sources of funding” for welfare projects.
“Most governments have budgetary constraints and other budgetary commitments. If we can tap into these other social finances, it can also benefit social assistance programs,” he said.
He said a key issue for zakat collection “is that people must trust that the zakat is being collected and delivered properly,” suggesting that it could be done by governments, citing examples from Saudi Arabia and Malaysia.
“In some states (provinces) in Malaysia, they have created corporations which collect zakat, and this has made the system very efficient (and) transparent,” he explained.
“There are certain requirements for zakat (…) the collection and the distribution has to be very transparent, and if this is done by government entities and they can show people that zakat is creating an impact, then people will (…) contribute to these organizations,” Ahmed said.
Trust is a central requirement “not only for zakat, but any non-profit donations and charities,” he emphasised.
NEED FOR COLLECTIVE SOLUTIONS
Global challenges demand collective solutions, Ahmed stressed.
“One of the key changes after the pandemic is that we have moved to times where there will be a lot of risks and uncertainties. Of course, climate change is going to be one of the key factors increasing these uncertainties,” he said.
“We have also seen the geopolitics related to the Russia-Ukraine war and how it is disrupting supply chains. When you have these global problems, it is very difficult for individual countries to come up with solutions on their own.”
OIC countries coming together to work toward solutions “is definitely the right way to go,” he added.
“Because a lot of these problems cannot be solved by individual countries, and it requires thinking not (only) at regional or group level, but at the global level,” Ahmed said.
The OIC and COMCEC “provide a platform where this can be discussed … (to) come up with solutions from an Islamic point of view,” he added.
“A lot of times, we have lots of solutions in some ways embedded in our history, in historical experiences which we can revive,” said Ahmed.
“Solutions like zakat, waqf (charitable endowment), and the use of mosques as entities for social capital are some of the examples where the OIC can make an impact.”
