Zakat in Reverse: Poor Support Rich Amid Middle East COVID-19 Crisis

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Rabat – The ultra-rich have become even richer, while poor and middle-class people pay for the consequences of the COVID-19 pandemic. New data that Wealth-X published on Wednesday shows that the segment of Middle-Easterners worth more than $30 million has grown, and the ultra-rich are getting richer during the pandemic. 

Meanwhile, government action has moved the financial cost of the economic fallout onto the poor and middle-class sections of society.

2019 was an amazing year for the ultra-rich in the Middle-East. The amount of millionaires and billionaires in the region grew faster than any other region in the world. In 2020 the pandemic hit and oil prices cratered, yet the rich have still managed to become even richer. 

The measures governments implemented to fight the economic consequences of the crisis, however, do not seem to account for the trend. Governments across the Middle-East avoided asking their richest few to pay more, instead cutting jobs and benefits for hard-working poor and middle-class people. 

This inequality is not only a staple of modern day capitalism. In a Muslim majority region, the growing inequality stands in stark contrast with the guiding principles of Islam and its focus on alms for the poor through Zakat, or voluntary Sadaqa. 

In a perverse form of Zakat or Sadaqa in reverse, the poor are paying to maintain the comfort of the rich during an unprecedented time of crisis.

Rich getting richer

In times of crisis the wealthy have the means to support others by paying taxes on their income and property, but governments in the region have been reluctant to touch the fortunes of their ultra-wealthy. 

After years of inequality shrinking in the Middle East, from 2010 onwards the gap again widened

According to Wealth-X’s World Ultra Health Report 2020 there are 9,780 “ultra-rich” people in the Middle East. This group of people own over $1.5 trillion of the region’s wealth. 

The region’s billionaires have done well for themselves. Wealth-X’s 2020 billionaire census shows that Saudi Arabia and the UAE have 109 billionaires who hold more than $300 billion. Dubai is the Middle East’s natural home for wealth with 35 billionaires living in the glitzy Emirati city. 

The rich getting richer is an unfortunate trend that is happening globally. Yet in the Middle East this inequality stands in stark contrast with people starving and dying of disease in Yemen, or struggling to make ends meet due to the COVID-19 crisis.

The reality of widening inequality clashes with the teachings of Islam, the religion of both the region’s rich and the governments that control their taxation. The concept of Zakat, or giving a fixed amount of one’s property to the poor, is so important that it is one the five pillars on which the religion was founded. 

The concept of Zakat alone should compel the rich to pay their fair share of property and income taxes to fund a COVID-19 recovery and provide a brighter future for local youth.  

The glaring disparity between poor and rich is a simple matter of basic human morality in the face of poverty and despair. Greed is considered a sin in all three Abrahamic religions and the hoarding of billions while people starve does not require religion to be seen as immoral. 

Poor asked to pay

The cost of the economic crisis that followed the spread of COVID-19 has shifted almost entirely to poor and working-class families. 

The government of Saudi Arabia announced it will triple value-added tax. This is a direct burden on society’s less fortunate, as they spend a larger portion of their income on basic necessities to which VAT applies. The rich only spend a fraction of their income, with the rest going into untaxed investments or savings accounts.

The Saudis cut the living allowance for public sector workers, increasing expenses for approximately 10.5 million low-earning public sector workers by roughly 10%. And so the poor pay for Saudi Arabia’s $9 billion budget deficit while the rich pay little to nothing.

The UAE cut salaries of the poor and middle-class directly, often by 30%. Some have again received their full salary in September but the choice to offer standard compensation remains the decision of employers. Amid layoffs and continued expenses, many have struggled to stay afloat during the crisis and young people’s debts have risen significantly.

In Kuwait, the government is targeting the very poorest in its generally wealthy population. 

The government is considering making expats, many of whom do low-paid work, pay for new austerity measures by taxing remittances. In Kuwait the opposition has achieved relative success in shaming the government away from austerity, but the non-voting expats bloc is left to pay the bill.

Oxfam’s acting Executive Director Chema Vera recently told Al Jazeera that “[governments] have been failing to tax the rich, and instead let them off the hook.” The current crisis has revealed that “the vast majority of humanity exists only just above the poverty line, only one paycheck from destitution.”

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