As our community grows more prosperous and self-reliant, we decide to reach out to other impoverished communities in the local district, the state, the whole country and eventually the world. It appeases our consciences to know that all over the world, people living in poverty finally have access to the most fundamental human right: the need to satisfy their hunger. Each year on the eve of Eid Al-Adha, we feast with our family and friends, thinking that all the problems of the poor, like Aminah and her three children, are solved once and for all.
As time goes by, Aminah and her children have all but consumed all the meat donated to them. Abandoned by her former husband who left for a younger woman, Aminah lives another day weaving ketupat to make ends meet. The income she earns is hardly sufficient to buy a cup of rice and some dried fish to feed her and her three kids. Like any other parent, Aminah needs to buy new clothes and support her two children through school, not to mention fixing the leaking roof and the torturous nights spent soaking in the rain. Until the next zakat or qurban donation arrives, she has no money for such "luxury". Lacking any other recourse, she decides to borrow some money from the local moneylender, or ah long.
As the global oil prices are on the rise, other basic consumer goods soon follow the same trend. Soon after, the inflation rises in tandem. Aminah, who has only heard of gasoline-sucking automobiles from her neighbors who have been to the city, is hard-pressed because she has to buy ketupat leaves at a higher price. The following week, when the ah long comes knocking at the door to collect the next installment, she has absolutely no money to give him. When the zakat donation arrives three weeks later, Aminah finally manages to settle her first installment, but only after losing two of her fingers and her dignity to the sexually-deprived ah long.
The fictional story presented above merely represents the tip of the iceberg of the suffering experienced by millions of impoverished families all over the world. Despite billions of dollars in aid donations awarded throughout the years, 1.1 billion people are still living on less than one dollar (USD) a day. While poverty has somewhat improved in some parts of the world, the situation has actually become worse for people in Sub-Saharan Africa, many of which are Muslims. Civil wars, droughts, natural disasters, widespread corruption and killer diseases only exacerbate their already grave conditions. This is happening amidst the backdrop of all the wonderful technologies enjoyed by people in more developed countries. This is happening despite millions of economists trained in elegant economic theories every year to help humanity grow and prosper. This is happening despite billions of dollars in oil revenues pumped out from oil fields in wealthy Middle East kingdoms each year.
While the status quo only serves to empower and enrich the wealthy, the destitute are forsaken and left far behind. Occasionally, in the name of charity and religion, a minuscule portion of the generated wealth is channeled to numerous international aid programs. Unfortunately, these are often nothing but a front for government contractors to siphon the resources away from those who need them the most. This so-called development breeds a new species of "bloodthirsty" capitalists whose primary goal is to maximize their profits with very little regard to their original goal of combating poverty. They subject the destitute to oppressive job schemes and extremely marginal distribution deals that create unnecessary dependencies on the wealthy elite. While the poor may benefit indirectly from the infrastructure building, training programs and financial aids, their standard of living has actually become worse.
All this goes to show our constant failure in eradicating poverty on a global scale. We have to get back to the drawing board and ponder on the shortcomings of the current economic system that only serve to make "the rich get richer, and the poor get poorer". We have to revise and upgrade our approach to charity, be it in the form of alms (zakat), cattle sacrifice (qurban) or voluntary charity (sadaqa). Think about how the donations received by families like Aminah's can possibly provide them with a sustainable and decent living. Think about how the meat and RM500 they receive for qurban and zakat each year are going to help them survive in the coming weeks and months. While the donations may provide them with a financial cushion on a short term basis, they may continue to starve once they eventually run out of food and aid money. Most of the time, they cannot afford to wait until the next round of donations to buy some rice and dried fish.
Charity, in its traditional form of feeding the hungry and giving money to the penniless, might have been relevant centuries ago. Nowadays with the introduction of welfare programs and orphanages, orphans are now able to lead decent lives. Sure, they may long for the love and affection of their deceased parents, but at the very least they are well fed, sheltered, dressed, schooled and surrounded by many friends and teachers. Instead, on special occasions like Eid and aqiqa, we keep inviting them to our house to feed them sumptuous meals and shower them with material gifts. On the other hand, the hardcore poor are only awarded a temporary reprieve by the marginal monetary aids and some food coupons distributed by the aid agencies. But will they live another day once the money is spent on settling debts, fixing the leaking roof and buying raw materials at ever increasing costs?
The 2006 Nobel Peace Prize laureate, Muhammad Yunus, has the following to say about charity:
"When we want to help the poor, we usually offer them charity. Most often we use charity to avoid recognizing the problem and finding a solution for it. Charity becomes a way to shrug off our responsibility. But charity is no solution to poverty. Charity only perpetuates poverty by taking the initiative away from the poor. Charity allows us to go ahead with our own lives without worrying about the lives of the poor. Charity appeases our consciences."
All this calls for a new model upon which our economy should be based. One such model is the one introduced by the Grameen Bank founded by Muhammad Yunus in his native Bangladesh. In this social-capitalist model, the poor are empowered by giving them collateral-free micro-credit loans with very flexible and forgiving repayment schemes. While the loan amounts (ranging from as little as five dollars to as much as 5,000 dollars) may seem negligible to many of us, they actually mean the world to the poor and desperate borrowers. Often enough these people are starving simply for the lack of five dollars to buy some chickens or cheap raw materials to make ornaments or scarves. These loans, while small, literally provide them with a new lease of life.
Such model, while unconventional and counter intuitive to many, brings many benefits to the destitute. Among others, these include:
- The flexible repayment schemes are far from being burdensome to the borrowers. Each loan is spread over the course of a year, and borrowers are required to make weekly repayments including a very small amount of interest to cover administrative costs. Should a borrower default her installments, she is usually forgiven while the bank is willing to negotiate a more flexible repayment scheme spread over a longer period of time. Not just that, but the bank also provides free consultation to the borrowers in order to help them overcome their financial problems and regain their confidence in repaying their loans.
- Since the bank is 93% owned by the borrowers, the issue of usurious practices do not arise, since the interests paid to the bank essentially end up in the hands of the borrowers themselves. Furthermore, the interests charged are very nominal and utilized to help maintain its workforce and extend more loans to even more poor people in other impoverished parts of Bangladesh. The bank has so far managed to stay true to its primary goal, which is to eradicate poverty first and perhaps make some profits along the way. Compare this to the so-called Islamic banks that are nothing but a front for the conventional greed-based banking framework that systematically deceives customers behind the veil of bastardized sharia principles.
- It builds a culture of self-reliance among the borrowers as an alternative to perpetually relying on government subsidies and financial aids. Being able to make weekly repayments regularly gives the borrowers a sense of self-worth and discipline. It builds up their self esteem and confidence in their capabilities and skills, something they never thought existed before.
- Having access to micro-credit loans provides them with a sustainable income in the long run. If previously they were perpetually stuck in a vicious cycle of starvation and mounting debts, now they are much more in control of their cash flow. With a more stable cash flow comes the confidence to expand their micro businesses on a larger scale. The children are no longer malnourished, the leaking roof is finally fixed and they can now cut out the middlemen and earn substantially more from their hard work.
- Perhaps the single most impressive achievement brought about by Grameen Bank's social-capitalist evolution is the immense empowerment of women. These women, most of them hard-pressed single mothers, wives who were subjugated by their husbands and oppressed by the overly strict interpretation of the sharia, were suddenly brought back to life. They are finally able to sustain a small but meaningful living for her and the children. Even more astonishing is the fact that over 95% of all borrowers are women who not only hold a much higher social status, but also participate actively in local and national elections.
While this social-capitalism concept may seem foreign to someone coming from a capitalist background, it should be quite familiar to all Muslims. Contrary to capitalism's primary goal of maximizing profit above all else, sharia principles place great importance on the empowerment of the poor through the prohibition of usury (riba') and oppressive repayment schemes. On the other extreme, while Marxism imposes strict distribution of wealth without leaving any room for competition and free market, sharia actually promotes a free market and profit-seeking as long as they do not run counter to the primary goal of helping the poor. If anything, social-capitalism is essentially based on true sharia principles adopted by great Islamic civilizations throughout history.
Debunking the myth of Eid Al-Adha whose central theme is the notion that cattle sacrificing (qurban) significantly improves the lives of the poor falls on our shoulders. While qurban may help alleviate the travails of the poor on a temporary basis, much more needs to be done. Perhaps we should broaden the definition of alms, qurban and sadaqa to include providing the destitute with micro-credit loans that have been proven to provide them with a sustainable income in the long run. As the poor grow more and more self-reliant, much less will be spent on charity and aid programs, the proceeds of which may be channeled to other development programs. As the poor prosper, the economy as a whole will undoubtedly benefit directly from it.
Just like the old Chinese saying, "Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime."
This article is inspired by the book entitled "Banker to the Poor" written by Nobel laureate, Muhammad Yunus.