Could Zakat help the global recession caused by COVID-19?
The COVID-19 pandemic has now reached almost every country in the world. In addition to posing health challenges, the outbreak has prompted mass closures of businesses causing layoffs and straining resources.
Zakat, now more than ever, plays a vital role in uplifting communities locally and globally. This pandemic does not discriminate where we live or our socio-economic status. Therefore, Zakat as a tool of social finance, if employed with immediate response, can make a positive global impact.
Could Zakat also act as an economic bailout across Muslim-majority countries and nations with sizable Muslim minorities?
Azim Kidwai, CEO of Mercy Mission, UK makes a great point in his recent Euronews article: “Many parts of the world may be protected from the worst of its effects by the billions in increased consumer spending and charitable giving during the holy month of Ramadan, which started last week. There is an accommodation between materialistic and spiritual values in Muslim-majority countries, as well as Muslim communities in Europe and North America, that may provide an economic lifeline for billions of people across the globe.”
From a religious perspective, Ramadan is a month of re-establishing our relationship with Allah and spiritual detox, but from an economic viewpoint, Muslims increase their spending and charitable giving during this month.
Muslim non-profits estimate 85% of donations to occur during the month of Ramadan. While the world is cutting back on spending, the mandatory nature of Zakat is forcing money to flow in an otherwise stagnant economy. Zakat is not donated based on the current economic well-being of a person, instead, it is 2.5% of the wealth that is held for the previous year. This principle makes Zakat giving unaffected by the economic downturn.
World Bank estimates between $200 Billion and $1 Trillion to be donated in Zakat annually. Zakat, paid by a quarter of the world population could be the financial bailout the World needs at the verge of what economists are calling ‘worse than the great depression’.
Uplift the global economy by giving your Zakat this Ramadan on LaunchGood. Pick from hundreds of scholar-verified Zakat campaigns from around the World.
