Welcome to the webinar The role of Zakat in the provision of social protection

organised by

The International Policy Centre for Inclusive Growth (IPC-IG) and the United Nations Children's Fund (UNICEF) socialprotection.org presents: The role of Zakat in the provision of social protection

Presenters:

Elamin Ali, Zakat Chamber, Sudan (with consecutive translation from Arabic to English, provided by Elmoiz Ismail)

Zine Barka, Université de Tlemcen,

Discussant:

Mohammad Pournik, UNDP

Moderator:

Buthaina Al-Iryani, UNICEF MENA Regional Office The role of Zakat in the provision of social protection

Presenter

Elamin Ali Zakat Chamber, Sudan

Elamin Ali AbdElgadir is the Director of Statistics and Information Directorate in the Zakat Chamber of the Republic of Sudan. Elamin has a long work experience in Zakat; he worked as the Director of Information Centre and also as the Director of Statistics and Information Technology Directorate in the Zakat Chamber. Elamin also worked as the Executive Director of the comprehensive update in 2011 of targeting lists of families living in in Sudan. Elamin also participated in the implementation of the Population Census of Sudan in 2008. He holds a Master degree in Business Administration, a Postgraduate Diploma in Computer Sciences and a Bachelor degree in Statistics and Applied Sociology. The role of Zakat in the provision of social protection

Presenter

Zine Barka Université de Tlemcen, Algeria

Dr. Zine Barka is currently Professor of Public Finance and Director of a Research Team on Public Finance at the University of Tlemcen, in Algeria. Previously, he held the position of Director of the Faculty of Economics and is the founder of a Journal on Public Finance. Dr. Barka has written on various aspects of public finance particularly on the MENA Region. Last year he presented a paper on “Zakat as a Resource Complement to Cash Transfers to Face Poverty Alleviation in Algeria” at the International Conference on Social Policy in the Islamic World in Teheran, 12-13 May 2018. His research and teaching experiences brought him on a sabbatical leave as visiting Professor to Florida State University in 2009 – 2010 and in 2015 again. Before, Dr. Barka spent one year in 2001 at the University of Urbana – Champaign – Illinois as a distinguished Fulbright scholar. The role of Zakat in the provision of social protection

Discussant

Mohammad Pournik UNDP

Mohammad Pournik retired from UNDP in February 2013. He served as Poverty Practice Leader at the UNDP regional centre for Arab States in Cairo from August 2009, where he provided substantive guidance to UNDP Country Offices in the Arab region on how best to respond to challenges of socio-economic development. For most of his professional life in the United Nations system, Mohammad Pournik worked on issues pertaining to political economy of sustainable development and . He joined UNDP Iran in 1984 and has since worked in Laos, New York, Nepal, Sudan and Yemen. In Nepal he was the regional coordinator for the South Asia Poverty Alleviation Programme, a multi-country intervention to link social mobilization at the local level with a supportive macro policy framework for poverty reduction and active engagement of hitherto excluded groups into mainline economic activities. In Sudan he served as Senior Economist and Poverty Reduction Advisor, while in Yemen he was the Principal Economic and Governance Advisor focusing on the links between governance systems and developmental outcomes. Prior to joining the UN, he served briefly with the Iranian Plan and Budget Organization after several years of private sector experience. Mohammad Pournik received his academic training as an economist at the American University in Washington, D.C., the School of Oriental and African Studies (SOAS) of London and the University of Sussex, respectively at doctoral, master’s and bachelor’s levels. The role of Zakat in the provision of social protection

Moderator

Buthaina Al-Iryani UNICEF MENA Regional Office

Buthaina Al-Iryani is the Social Policy Specialist at the UNICEF Regional Office for Middle East and North Africa since 2016. She holds a PhD in Public , and with 20 years of work experience programme management; social protection and policy; research and evaluation; youth development and participation; and HIV prevention. Buthaina is a national of Yemen. Submit your questions to the panellists

@socialprotectionorg @SP_Gateway

ZAKAT AS A COMPLEMENT TO CASH TRANSFERS TO ALLEVIATE POVERTY IN ALGERIA

Zine M. BARKA Fatima-Zohra KIARI Professor of Public Finance Assistant Professor Director – Groupe de Recherche en Economie University of Mascara des Finances Publiques University of Tlemcen

Corresponding author: [email protected] Outline

I. Background information on Zakat and Algeria

II. Zakat and Poverty Reduction: Algeria’s newly established Zakat Fund at the central level and its effects on the beneficiaries.

III. Field investigation about the Zakat Fund in a mid-size town in the West of the country named Mascara.

IV. Conclusion on the key results of the study and its limitations. I. Background information on Zakat and Algeria

• The Muslim countries inherited an important pillar in the practice of religion, that is Zakat for fighting against poverty. • Many studies in Pakistan, Malaysia and Indonesia have documented the positive link between Zakat and poverty alleviation. • Our study looks at Zakat funded cash transfers as an additional policy to fight poverty.

ZAKAT AS A RESOURCE COMPLEMENT TO CASH TRANSFERS TO FACE POVERTY ALLEVIATION IN ALGERIA Some Facts

• Algeria: 42 million inhabitants

• Rate: 11.70 % in 2017

• The Ministry of Family and Solidarity is responsible for the policies of social transfers and assistance

• 20% of the total budget

• However: challenges in terms of effectiveness

ZAKAT AS A RESOURCE COMPLEMENT TO CASH TRANSFERS TO FACE POVERTY ALLEVIATION IN ALGERIA II. Zakat and Poverty Reduction in Algeria

• Zakat is one of the five pillars of Islam on which stands the structure of Islam. • It is obligatory for every Muslim to pay a "tax", called Zakat al mal, on accumulated wealth or related to the saved money.

ZAKAT AS A RESOURCE COMPLEMENT TO CASH TRANSFERS TO FACE POVERTY ALLEVIATION IN ALGERIA • The Ministry of religious Affairs and Waqf has announced that the “nissab” of Zakat for the year 1439 of the Hegira corresponding to 2017/2018 has been set at 552.500 DA, (4.648,69 USD).

• The rate of Zakat is 2.5% of money and goods reaching the “nissab” at the end of a year (valued at the current price the day of the Zakat collection).

• Zakat can be considered as an Islamic Safety Net to combat poverty and enhance in the society.

ZAKAT AS A RESOURCE COMPLEMENT TO CASH TRANSFERS TO FACE POVERTY ALLEVIATION IN ALGERIA The Zakat Fund: 2003 The collection is done by banks and in mosques by Zakat Committees.

Number of beneficiary families (in Total National Zakat (in Millions AD) Thousands) 900 120 800

100 700

600 80

500

60 400

300 40

200 20 100

0 0 2003200420052006200720082009201020112012201320142015 20032004200520062007200820092010201120122013

ZAKAT AS A RESOURCE COMPLEMENT TO CASH TRANSFERS TO FACE POVERTY ALLEVIATION IN ALGERIA Distribution of Zakat Proceeds at the National Level

The persons entitled to receive Zakat are clearly mentioned in the Coran (8 in total).

The Zakat Funds are distributed according to the ministerial order as follows:

• 50% go to the Fuqara (the poor), Al-Masakin (the needy);

• 37.5% directed to investment;

• 12.5% to the management of Zakat Fund expenses.

ZAKAT AS A RESOURCE COMPLEMENT TO CASH TRANSFERS TO FACE POVERTY ALLEVIATION IN ALGERIA Figure 3: Total of Zakat Proceeds in Mascara in 106Da 35000000

30000000

25000000

20000000

15000000

10000000

5000000

0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Prepared by researchers based on the data of Table (06).

ZAKAT AS A RESOURCE COMPLEMENT TO CASH TRANSFERS TO FACE POVERTY ALLEVIATION IN ALGERIA This survey is based on a sample of 150 beneficiaries of Zakat Fund in Mascara city in 2017.

Number of beneficiaries Percent Gender • Men 48 32 % • Women 102 68 % Age • 18-30 30 20% • 31-50 75 50% • More than 50 45 30% Family status • Single 15 10% • Married 51 34% • Widowed 43 28.7% • Divorced 41 27.3% Type of Income • Earned income 30 20% • Temporary income 27 18% • State benefits 63 42% • No sources of income 30 20%

Impact of Zakat on • Consumption 99 66% • Elimination of debts 12 8% • Coverage of medical costs 39 26% • Investment 0 0% Total 150 100%

Table 3: Profile of beneficiaries of Zakat fund surveyed

Source: compiled by Authors based on Mascara Zakat fund database for 2017.

ZAKAT AS A RESOURCE COMPLEMENT TO CASH TRANSFERS TO FACE POVERTY ALLEVIATION IN ALGERIA Challenges

• In many Islamic countries, Funds are facing corruption in the disbursement of Zakat: nepotism, political interference…

• Lack of effective monitoring system.

• Some people don’t want to pay Zakat through the government due to the lack of trust in government institutions.

ZAKAT AS A RESOURCE COMPLEMENT TO CASH TRANSFERS TO FACE POVERTY ALLEVIATION IN ALGERIA Conclusion

• To expand fully the effects of Zakat on alleviating poverty and hardship it is necessary to start having a data base on the local population.

ZAKAT AS A RESOURCE COMPLEMENT TO CASH TRANSFERS TO FACE POVERTY ALLEVIATION IN ALGERIA • The Website of the Ministry of Religious Affairs does not provide much information about Zakat.

• Here are some shortcomings found on the Website of the Ministry:

ZAKAT AS A RESOURCE COMPLEMENT TO CASH TRANSFERS TO FACE POVERTY ALLEVIATION IN ALGERIA • Data on collection of Zakat starts in 2003 and ends in 2009, • Beneficiaries: from 2003 to 2005, • Zakat allocated to investments from 2004 to 2009, • Algerians living abraod: the window does not open, • How Zakat is spent: nothing on the window, nothing is mentionned at the local level, except data on the accounts to be credited at the 48 districts.

ZAKAT AS A RESOURCE COMPLEMENT TO CASH TRANSFERS TO FACE POVERTY ALLEVIATION IN ALGERIA The role of Zakat in the provision of social protection

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The role of Zakat in the provision of social protection

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