UNHCR and the role of the Islamic economy

Why the growth of the Islamic Economy is important for refugees and internally displaced people (IDPs)

In the past year, we once again witnessed an increase in the number of people forcibly displaced globally. By the end of 2020, 82.4 million people had been forced to flee their homes. With the intensification of crises, from Mexico to the Sahel region to Afghanistan, this number is unfortunately expected to increase over the next year. In 2020 alone, 9.8 million people were displaced within their own countries, and 1.4 million sought refuge across their borders. The majority of these displaced populations, be they refugees or internally displaced people (IDPs), are from only five countries: Syria, Venezuela, Afghanistan, South Sudan, and Myanmar, while 86% of displaced families are hosted in developing countries where the socio-economic situation is already fragile. 

Beyond the figures, the demographic dynamics of these populations are highly concerning: among the nearly 26.4 million refugees, approximately half are children. Globally, almost 1 million children were born as refugees between 2018 and 2020. With no end in sight for many crises, displaced families find themselves in dire need of support to survive. For many Syrian families and individuals, this coming year will mark their 11th consecutive winter in displacement. This season brings with it additional challenges for those already struggling to make ends meet. Adding to that, the negative socio-economic impact of COVID-19 on displaced families and communities has been devastating, with many losing their informal daily-wage livelihoods. 

With the winter months coming, the snowball effect caused by the compounding of all these factors can quickly push IDP and refugee families into desperate situations. In the MENA region alone, there are over 10 million reported Syrian and Iraqi IDPs and refugees within Syria, Iraq, Lebanon, Jordan, and Egypt. Of this group, UNHCR estimates that 3.3 million people require critical assistance to help them prepare for and cope during the forthcoming winter. The onset of the harsh winter season is one of the hardest to cope with for IDP and refugee communities, as they have few resources still available to them and have higher costs to bear during this time. In the cold months, many families have to make the difficult decision between essential winter clothing and heat for their children or providing them with access to nutritious food, healthcare, or education. With most of their existing funds diminished and the increased economic hardships, it is now more vital than ever to support these communities. 

In preparation for the colder months, and as part of its regional winter response this year, UNHCR will provide winterization assistance to refugees and IDPs through: 

1. the provision of seasonal cash assistance for vulnerable families to meet their additional needs during the winter months, 

2. provision of core relief items specific to winters such as high thermal blankets, plastic sheets, sleeping bags, and winter clothes, 

3. winterization of shelter, including weatherproofing and repairs, improvements to drainage systems, and other infrastructure in camps and informal settlements. 

The provision of seasonal cash assistance is one of the most integral elements of the winterization response. It allows families to determine what they need most and put their funds to use in those high-priority areas. Studies have also found that it positively impacts debt repayments, school attendance, and well-being. It also decreases engagement with negative coping mechanisms such as child labor. It also diminishes the risk of exposure to violence, abuse, and child neglect, thereby increasing their safety. Additionally, cash assistance has a significantly positive effect on the local economy.

The role of Islamic philanthropy

UNHCR is committed to helping all 3.3 million people who require winterization assistance with a budget funding need of US$193.4 million to provide life-saving support. We are working hard to mobilize additional resources to cover the needs of displaced populations in the region during these harsh months. Islamic Philanthropy (IP) has been playing a crucial role in this regard for several years. The Refugee Zakat Fund, launched by UNHCR in 2019, is a trusted, compliant and effective distributor ​maximizing the power of zakat ​and sadaqah to transform the lives of refugees, including in hard-to-reach areas. Backed by more than 10 fatwas from renowned scholars and institutions, the Fund distributes 100% of the zakat received to eligible beneficiaries and has over 40 partners worldwide, from foundations to companies and multi-lateral organizations, in addition to the thousands of individual donors entrusting UNHCR with their personal zakat. 

With the rapid growth of the Islamic economy and subsequently Islamic philanthropy, it is now widely recognized within the humanitarian community that IP can play a key role in responding to global humanitarian needs and that strategic partnerships between all IP stakeholders are much needed for this to happen. This is even more relevant for situations such as the displacement crisis, where more than 60% of the global displaced population originates from member states of the Organization of Islamic Cooperation (OIC). With this in mind, and in the context of growing Islamic economy trends, IP has the untapped potential to exponentially grow and expand its reach and impact.

GiveZakat, a unique app

The global Muslim population today is, on average, younger and more connected than the rest of the world. Young Muslims are expected to make up around 60% of the global Muslim population by 2050, and the internet in regions such as MENA is accessed by 65% of the population vs. 49% for the rest of the world. Therefore, digital connectivity will continue to represent a driver of growth for the Islamic Economy, and hence the need for IP players to develop tech products that can meet the needs of Muslim donors. 

As such, UNHCR launched GiveZakat in 2020, the first app released by a UN agency for zakat and sadaqah. GiveZakat users can choose the amount and the frequency of their giving and calculate their zakat based on their assets and wealth using the “Zakat Calculator.” Other innovative features, such as tracking contributions from the moment funds are donated till beneficiaries receive them make it easier to ensure high transparency in the donation process. Since its launch, more than 1,400 have trusted GiveZakat. We encourage you to download the app available from all app stores to find out more and support forcibly displaced families. 

Increasing political tensions and adverse climate conditions are only exacerbating forced displacement around the world. The global refugee crisis will continue to need huge resource mobilization efforts. IP as a vital response for humanitarian and sustainable solutions cannot be ignored anymore. UNHCR has been engaging with stakeholders in this space since 2016 and is committed to contributing to help maximize its impact. In the past year, 2 million beneficiaries were supported through zakat and sadaqah contributions received through the Refugee Zakat Fund. In the first half of this year, we assisted nearly 500,000 beneficiaries in 9 countries through zakat contributions alone and aim to increase our reach and the number of families supported through Islamic philanthropy and social finance year after year.

To find out more about UNHCR’s Refugee Zakat Fund, our Islamic philanthropy tools and partnerships, we invite you to read UNHCR’s 2022 Islamic Philanthropy report, which was launched earlier this month. With your crucial support, we hope to mobilize more resources ahead of the winter season and together change the lives of those who are forcibly displaced from their homes.