Muslim world lags in aid and development

Doha // Muhammad Yunus may have kick-started modern microfinance, won the Nobel Peace Prize and inspired the current vogue for social entrepreneurialism. But across the Middle East and North Africa, his Muslim brethren seem to have dropped the baton.

Of the thousands of social businesses around the world, Arabs founded less than 75, according to a study by the Middle East Youth Initiative. Of those, five were launched in the wealthy nations of the GCC: three in Kuwait and one each in Saudi Arabia and Bahrain; none in Qatar and the UAE.

“Social entrepreneurship is a nascent field here,” said Ehaab Abdou, an adviser to MEYI, a partnership of the Brookings Institute and the Dubai School of Government. “This is a big gap that we need to address.”

One after another, officials, academics and industry experts speaking at the third annual World Congress of Muslim Philanthropists (WCMP) here underscored how the Muslim world – which represents nearly a quarter of humanity – has been failing to pull its weight in responding to poverty, hunger, humanitarian emergencies and the radicalisation of youth.

In bringing philanthropists and aid organisations up to speed, they may need to start with the basics.

“Very few people in the field in Saudi Arabia even know what development is,” said Saudi Princess Banderi Abdul Rahman Al Faisal, the director general of the King Khalid Foundation (KKF), which works with Saudi non-profit organisations to train their staff, design projects and improve effectiveness and monitoring.

Ms Faisal likely hit on the key problem: inadequate education.

“The way to jannat [Arabic for ‘paradise’] is not just building mosques,” said Atta-ur-Rahman, a former education minister of Pakistan who now heads the science and technology body of the Organisation of the Islamic Conference (OIC). “You have to build schools, you have to build research and innovation centres and knowledge parks.”

Ten years ago, Sheikh Saud bin Saqr, crown prince and deputy ruler of Ras al Khaimah, helped launch the Arab Science & Technology Foundation. Today the organisation has 15,000 member scientists and regularly links international businesses with entrepreneurial Arab scientists.

“We try to match those who have some knowledge with those who have some money to develop something really good,” said Abdallah al Najjar, the foundation’s president and CEO. Out of 90 start-up concepts the organisation has presented to investors, 22 have received financing.

Yet more needs to be done, particularly within Muslim countries. Nearly one billion people in OIC-member states are below the age of 25, according to Mr Rahman. Due to a lack of training and opportunity, many are unable to access the advantages of a globalised economy.

A study by the International Council on Security and Development found that more than 85 per cent of young men in Afghanistan, Iraq and Somalia say there are not enough jobs and that greater numbers are joining militant groups.
Similar problems exist from Algeria to Indonesia. ISOC works to minimise such discontentment by providing homes, jobs, marriage and education.

“We could turn this group of young men, this demographic time bomb, into married men with jobs, a house, a commitment to their community, a sense of identity, a sense of enfranchisement,” said Norine McDonald, ISOC director. “All these things we work on should be given the same political and financial support as we give to military and police actions.”

Such support is undermined by a lack of information and suspicion about aid efforts. In a recent YouGov survey, nearly 40 per cent of respondents across the Middle East said they had not donated to Haitian earthquake relief because they did not know where or to whom to contribute.

Further, 35 per cent said they did not trust local non-profits and 36 per cent believed it was easier to donate to international organisations.

KKF has partnered with the Columbia Business School, Acumen Fund and the United Nations’ Millennium Development Goals. Yet most Saudi donors still view non-profits as ineffective or unaccountable and prefer to give directly to the beneficiary.
“We have to build non-profit capacity because the donors must be able to trust their abilities,” said Ms Faisal. “We’re actually looking to shift the mindset, shift the culture, and that’s very difficult.”

Another hurdle is a lack of commitment from those in a position to help.

The Islamic Development Bank is one of the world’s largest and most innovative international aid institutions and many of the more developed Muslim nations have significant aid agencies. As a percentage of GDP, in fact, wealthy Gulf states are among the world’s leading providers of aid.

And while philanthropists gathered in Doha, Arab leaders met in Cairo hoping to net US$2 billion (Dh7.3bn) for a new Darfur reconstruction fund.

Yet only a small percentage of the more than $100 billion in zakat payments collected annually by OIC member states goes to help the needy, said Mat Hassan Essa, head of the International Zakat Organisation. He proposed a cooperative effort to collect and disburse these funds to projects for the poor.

Islamic bankers, too, generally ignore the base of the pyramid. Globally, Islamic finance is set to reach $10 trillion this year, yet out of 77 million microcredit loans worldwide, some 380,000, or about 0.4 per cent, are Sharia-compliant.

“Right now Islamic financing is geared towards serving the haves of the world,” said Ali Ibrahim, a law professor at Georgetown University in Bahrain.

Many of those haves might be unaware that one-sixth of humanity remains hungry and that food production in Africa is set to drop one-fifth by 2050. Tarik Cheema, CEO of the WCMP, is not among them.

At the conference’s opening session he announced the Hasana Fund, a microfinance initiative that will provide interest-free loans to small-scale farmers across more than 20 poorer nations, including Bangladesh, Ghana, Ethiopia.

“As human beings and Muslims,” said Mr Cheema, “it is our duty not just to give food but also to help the poor produce their food so that they are not dependent.”