Religious Money and Socio-Economic Development

This is a weekly post by Nidhal Guessoum (see his earlier posts here). Nidhal is an astrophysicist and Professor of Physics at American University of Sharjah and is the author of Islam's Quantum Question: Reconciling Muslim Tradition and Modern Science.

Can money which comes from or is supposed to be spent on religious obligations be equivalently channeled into socio-economic development funds? Readers who know Islam and its practices rather well will quickly answer: sure! That is mostly what zakat (levy on assets) is about, and that’s the main objectives of waqf (Islamic endowments). Perhaps; we’ll get to this shortly. 

But then if one asks: can one take the money s/he was going to spend on his/her pilgrimage trip (Hajj) or `Umra (short religious visit to Mecca) and instead donate it to a development project and claim that s/he has accomplished the original religious act? Not so obvious, right?

Well this question was precisely put to Sheikh Yousef Al-Qaradhawi, the head of the International Union for Muslim Scholars and arguably the most important/influential Muslim scholar of today. This was done by the well-known Egyptian writer Fahmi Huweidi, who called him on the phone, asked him that question, wrote down the answer, read it back to him for confirmation, and reported it as follows:

If an emergency situation occurs in an Islamic country leading to a dearth of financial sources, the ruler [of this country] must restrict the `umra, because it is an optional [ritual] rather than an obligatory one. This also applies to voluntary Hajj, which is [likewise] optional... When a Muslim who intended to go on pilgrimage donates his money [to the state instead], it counts [as though he made] the `umra or the Hajj. As for diverting charity toward rescuing the economy of an Islamic country, or toward developing its economy and meeting the needs of its residents, this is considered a deed for the sake of Allah, which is to say that it falls among the recognized causes [toward which Muslims are obligated to give charity] according to religious law.

Huweidi wrote (in his Al-Shurouq newspaper column on April 26, 2011) that he had noticed that the deficit of 2 billion dollars that the Egyptian government was scrambling (by trips to the Gulf) to cover until the end of the fiscal year (June) was exactly the amount spent by Egyptians on Hajj and `Umra each year. He, being a “progressive” Muslim thinker, thus thought that perhaps Egyptians could equally serve and worship God by giving the money for their country/brethren’s benefit. As one can imagine, not all scholars agreed with such “progressive” thinking…

The question of spending ‘religious’ money on socio-economic development projects is actually not new. To my knowledge, this is the first time that the idea has been extended to Hajj and `Umra, but its relevance and application to zakat and waqf is far from new, though not quite straight-forward either.

Zakat, one of the five pillars of Islam, is a levy on assets, taken by the Islamic state or spent directly by the individual in some broadly prescribed ways. Assets include savings in the bank, properties (estate and livestock), agricultural products, gold and such. If these exceed a certain minimum, the owner is (religiously) obligated to donate a certain fraction (2.5 % for money and properties, 5 or 10 % on agricultural products depending on secondary criteria), etc. (Zakat is to be distinguished from sadaqah, charity, which one can give freely as one wishes.)

Zakat money, as prescribed by the Qur’an (9:60), practiced by the Prophet, and detailed by Muslim jurists, is supposed to be spent on the following eight categories:

1. The needy (Fuqara')
2. Those extremely poor (Al-Masakin)
3. Those employed to collect it (Al-`Amileen)
4. Those whose hearts are to be won (Al-Mu’allafatu Quloobuhum), i.e. for conversion
5. To free the captives by ransom (Ar-Riqaab)
6. Those in debt (Al-Ghaarimeen)
7. In the way of Allah (Fi sabil Allah)
8. The wayfarer (Ibnu-s-Sabeel)

It is usually the seventh category (“in the way of Allah”), which was habitually understood as meaning “the military needs”, that is now often interpreted to extend to all good socio-economic causes and projects, so that zakat can be used in many new ways.

There is also the famous institution of waqf, the Islamic endowments, which encompasses monies that are set aside by any rich person, before or after his/her death, for a specified project. This often became a way to support social and educational projects, including schools and hospitals, and in some cases centers of research.

I was in fact delighted to learn that the University of Sharjah (the other main university here) two weeks ago organized an international conference on “the role of waqf in developing a scientific renaissance” (website here, but in Arabic only). One must keep in mind that “scientific” in religious parlance is a very broad term, encompassing all fields of learning, including traditional Islamic areas. But in this conference, there was some emphasis on the need to revitalize and extend the institution of waqf to cover scientific research centers and other intellectual and academic activity.

Although much smaller now than it was during most of the history of Islam, the institution of waqf still functions in many/most parts of the Islamic world today. Lands, buildings, and sums of money are often set as endowments for specific purposes, e.g. mosques and their operational budgets, libraries with regular updating, schools and bursaries for students, etc. Many current examples were given during the conference. Most interestingly, however, a few speakers attempted to address the (current or future) application of waqf to the (hoped) broad scientific renaissance.

Two specific examples were presented with some emphasis: a) the endowment of university chairs (on specific topics), something that is beginning to occur in this part of the world; b) the seeding of scientific institutions such as the Arab Science and Technology Foundation, which was indeed started with a $1 million endowment by the Ruler of Sharjah, Sheikh Sultan Al-Qassimi, in 2003.

Let us hope that this tradition is revitalized and used for great socio-economic, educational, and scientific objectives. That is one way in which the Islamic civilization can rebuild itself.