The Sustainable Development Goals from a Shariah Perspective – IV

Since the religion of Islam sets the agenda for development in predominantly Muslim societies, it is interesting to examine to what extent the SDGs conform to the Islamic vision of development. In order to explain the Islamic vision of development, Islamic scholars have come up with a broad framework rooted in what are called, the Goals or the Maqasid of the Shariah (MaS). The MaS (as originally presented by the 12th-Centurey Islamic scholar Al-Ghazzali) are broadly discussed in five (05) categories: protection and enrichment of faith (deen), self (nafs), intellect (aql), progeny (nasl) and property (maal).

In recent times there have been some attempts to map the SDGs against the MaS. However, such attempts have often resulted in one-to-many as well as many-to-one mappings and the resultant clutter that adds little value in terms of comprehending the underlying relationships. In what follows, we seek to explore the relationship by going to the basics. We seek to delineate the relevant Shariah norms and prescriptions from the primary sources, i.e. the Quran and the Hadith for each one of the SDGs one by one.

In this part we focus on SDG8.

SDG8: Promote inclusive and sustainable economic growth, employment and decent work for all

The world suffers from a continued lack of decent work opportunities. Global unemployment rates stand at 5.7 percent. Further, having a job also doesn’t guarantee the ability to escape from poverty. More than 60 percent of all workers are engaged in informal employment according to recent data. This has led to an erosion of the basic social contract underlying democratic societies: that all must share in progress.

In the Islamic context, this social contract translates into a collective obligation called fard kifaya. As earlier discussed, Islam makes it a collective obligation for the society to take care of the basic needs of all its members. The resources at the societal level must be managed in such a way that every member of the society has an opportunity to earn an honest living in keeping with his/her ability and effort. Thus, it strongly underlines the importance of inclusive growth.

At the same time, Islam makes it a personal obligation (fard ayn) for every member of the society to be productive and create wealth.

The Quran instructs Muslims to go out into the world and seek of God’s bounties after having attended to their prayers (62: 10).

The Prophet (pbuh) underlined the significance of earning livelihoods in these words:

Earning a lawful livelihood is obligatory upon every Muslim (Suyuti, Al-Jami al-Saghir).

A man has not earned better income than that which is from his own effort (Sunan Ibn Majah)

The Prophet (phub) has also enjoined Muslims to acquire skill in some profession so that they can earn a respectable living by saying:

Allah loves a Muslim who has a professional skill (al-Tabarani’s al-Kabir and al-Bayhaqi)

For the poorest of poor and the destitute, who are not in a position to generate any income and wealth, society is expected to meet its obligation through the mechanism of charity. Islam strongly encourages the rich to help the poor and has institutionalized charity in the form of sadaqa, zakat and awqaf. However, while Islam strongly encourages charity from the giver’s point of view, it seeks to minimize dependence on charity from the beneficiary’s point of view and restricts the benefits to flow to.

A famous hadith (Sunan Abu Dawood, Kitab al-Zakah, Book 9, Number 1637) not only underscores the above, but also demonstrates how to design and implement a strategy of poverty alleviation through economic empowerment. The essence of the hadith is broken down into numbered statements so as to highlight the key principles and components of the strategy that follows from the hadith.

A man of the Ansar community came to the Prophet (peace be upon him) and begged from him. (#1)

He (the Prophet) asked: Have you nothing in your house? He (the man) replied: Yes, a piece of cloth, which we wear, or which we spread (on the ground), and a wooden bowl from which we drink water. (#2)

He (the Prophet) said: Bring them to me. He (the man) then brought these articles to him and he (the Prophet) took them in his hands and asked to the assembly of people: Who will buy these? A man said: I shall buy them for one dirham. He (the Prophet) asked twice or thrice: Who will offer more than one dirham? Another man said: I shall buy them for two dirhams. (#3)

He (the Prophet) gave these to him and took the two dirhams and, giving them to the man of the Ansar, he said: Buy food with one of them and hand it to your family, and buy an axe and bring it to me. (#4)

He then brought it to him. The Prophet (peace be upon him) fixed a handle on it with his own hands (#5)

and said: Go, gather firewood and sell it, and do not let me see you for a fortnight. (#6)

The man went away and gathered firewood and sold it. When he had earned ten dirhams, he came to him and bought a garment with some of them and food with the others. (#7)

The Prophet (peace be upon him) then said: This is better for you than that begging should come as a spot on your face on the Day of Judgment. Begging is right only for three people: one who is in grinding poverty, one who is seriously in debt, or one who is responsible for compensation and finds it difficult to pay. (#8)

The components of this hadith can be seen to emphasize the following fundamental conditions of a successful poverty alleviation program:

#1. Access of the poorest of the poor to the program: The Prophet (peace be upon him) was the spiritual as well as the political leader of the Muslims and he was accessible to the poor and the needy at all times for economic and financial assistance;

#2. Careful assessment of the financial health of the poor; enquiry blended with empathy; insistence on contribution and beneficiary stake: Many failed poverty alleviation programs owe their failure to inadequate evaluation of the client’s financial condition. Provision of finance does not stand to reason for a person in need of social safety nets resulting in the funds being consumed away instead of being invested. The poor come in disparate categories with varying needs of consumption and productive investment and risk of delinquency and default. Poverty alleviation programs involving indiscriminate funding of the poor, such as, most government-managed ones are destined to fail. This is one of the cornerstones of poverty alleviation “best practices” that assert the government should have no role in direct or indirect provision of financial services and its role should be restricted to providing a supporting and enabling environment. Insistence on beneficiary stake is of course, a device to reduce moral hazard and enhance efficiency.

#3. Transformation of unproductive assets of the beneficiary into income-generating ones through rigorous valuation (on the basis of price discovery through auction method); involvement of the larger community in the process: Often the poor own high-market-value assets, such as, land in a prime city location without being able to derive income or benefit from the asset. While ownership of land does provide them with a bulwark against unforeseen adversities, this is an uneconomical and wasteful method of insurance. What is desirable here is a way to transform the unproductive asset into a productive one that could generate income. The original asset is not lost but transformed into an income-generating one. The price at which the original asset is disposed of must be fair and should not take the form of a distress sale resulting in loss of value to the seller. Contemporary finance theorists find the auction system to be the most efficient process of discovery of the intrinsic worth or the fair price. The involvement of larger community in the poverty alleviation program is also highly desirable for success of the program. For many contemporary successful DFIs, the right strategy is to involve grass-root NGOs in the process.

#4. Meeting of basic needs on a priority basis and investment of the surplus in a productive asset: Once again this highlights the need to take into account the consumption needs of the clients before expecting them to create wealth. The realization about the need for a social safety net and to link the same to poverty alleviation at a later stage has come only recently.

#5. Direct involvement of the program in capacity building in the runup to income generation and technical assistance to the beneficiary; commitment of top management of the program: This part of the hadith demonstrates a unique form of commitment and involvement on the part of the Prophet (peace be upon him) in the program of poverty alleviation. The involvement could not be more direct and the commitment more pure.

#6. Technical assistance in the form of imparting requisite training to the beneficiary for carrying out the business plan/ income-generating project; monitoring through a time-bound schedule and impact assessment through a feed-back mechanism: The need to establish an effective linkage between financial assistance and technical assistance is emphasized among development professionals as never before. Also the importance of impact assessment can be hardly overemphasized.

#7. Transparent accounting of operational results and liberty to use part of income to meet higher needs: Transparency through meticulous accounting and proper documentation is a fundamental requirement of financial transactions in the Islamic framework. As the holy Quran asserts:

O ye who believe! When you deal with each other, in transactions involving future obligations in a fixed period of time, reduce them to writing and Let a scribe write down faithfully as between the parties (2:282)

The import and significance of this verse is often not fully understood. Indeed, lack of proper documentation and accounting by beneficiaries is a major challenge confronting poverty alleviation. Proper accounting and accurate measurement of results of operations or profits is a pre-requisite for profit-sharing based mechanisms. They are no less important for lending operations.

#8. Strong discouragement to seeking charity: Economic empowerment is the key word that rules out dependence on charity, which is permitted only for the poorest of the poor and those overburdened with debt or other obligations with no means of payment in sight.

The act of seeking charity is strongly discouraged, since it goes against the notion of dignity of self. The Prophet (pbuh), disapproved of seeking charity by saying:

Do not beg anything from people.  (Abu Dawud)

The hand that is above is better than the hand that is below. (Al-Bukhari).

An essential corollary of human dignity is that need fulfillment must be realized through the individual’s own efforts. Accordingly, it is the personal obligation (fard ayn) of every Muslim to earn a living to support himself and his family. At the same time, it is the collective obligation (fard kifayah) of a Muslim society to manage the economy in such a way that everyone has a suitable opportunity to earn an honest living in keeping with his/her ability and effort.

To be continued