Displaying items by tag: COVID19
How the pandemic is changing Southeast Asian digital consumers’ behaviour
While Covid-19 may be among the most devastating of all black swan events to hit Southeast Asia, it by no means is the first — and like previous crises in the world, it is introducing long-lasting changes to consumer behaviour and digital adoption.
Bain and Facebook have been studying the exponential growth of digital consumer behaviour in Southeast Asia for three years. As we move into the second half of 2020 and the next normal, we examine what has changed and what has not changed, and we consider what the future will look like for companies.
Covid-19 is intensifying the move online and serving as a catalyst for important changes. Online purchasing, digital consumption and average online basket size have all risen substantially and will continue to grow at record-setting rates, providing an opportunity for traditional businesses, large marketplaces and disruptive business models to thrive.
Worried consumers stockpiled basic goods during the pandemic, looking for value and trusted brands. They cut back on apparel and consumer electronics. And, in record numbers, they started buying online. Our analysis of buying patterns of 8,600 consumers in six Southeast Asian countries found that while 47% of consumers decreased offline purchases, 30% increased their online spending.
Our analysis helped us identify six critical themes in Southeast Asia among digital consumers who have made purchases online in the last six months.
At home and contactless is here to stay: Southeast Asia’s digital consumers report that they intend to stay at home for shopping and leisure more than they did pre-Covid-19. The region’s consumers are 1.5 times less likely to dine out or visit a cinema than their counterparts in the US. Meanwhile, consumers in Southeast Asia are embracing innovative contactless services. Even in the region’s cash-dominant markets, contactless payment platforms have achieved high growth in both users and transaction volumes.
Discovery of new apps accelerates: The pandemic has opened the region’s consumers up to more options. Seventy-seven per cent of surveyed digital consumers tried a new app that they plan to continue using post-Covid-19.
Essentials are moving online: Consumers across Southeast Asia are spending more online during the pandemic, with essential goods such as fresh or packaged grocery accounting for many of their purchases. Roughly 83% of those shopping online said they are likely to continue their increased spending online after restrictions are lifted.
Value for money is a key consideration: Facing economic uncertainty, digital consumers now are more thoughtful about their purchases and are turning their backs on splurges and impulsive spending. Value for money is a key purchase criterion for 57% of Southeast Asia’s digital consumers.
Reliable brands are on the rise: 42% of digital consumers surveyed said they had bought more established brands in recent months. In addition to consumer trust, established brands have robust supply chains to ensure their products are available. That’s important because one out of three digital consumers in Southeast Asia will switch brands when they do not find preferred brands, according to a survey by Toluna, a global online research panel and survey technology provider.
Health and welfare top of mind: When asked to prioritise their purchasing criteria, 39% of digital consumers in Southeast Asia cited health and wellness as a top priority. In the Philippines, 81% of consumers said they are likely to be more health conscious in the future.
Consumer goods companies that come out of the pandemic the strongest will be those that have adapted quickly to these long-lasting changes in consumer behaviour and digital adaption.
For example, some companies have swiftly increased product availability and visibility online, targeted digital engagement across platforms or optimised pricing and value perception while offering a dynamic mix of stock keeping units. Some have focused on improving their supply chain resilience or adapting purposeful messaging and offerings. Others have redesigned their operating norms and consumer reach models.
Heineken Vietnam launched three innovations at the height of the pandemic in April: the non-alcoholic lager Heineken 0.0, a brand named Bia Viet to serve the mainstream market, and a new sleek can for Tiger Crystal. It also pivoted on brand messaging, replacing its pre-Covid-19 “Inspire” to “Still fun at home”. It shifted marketing budgets to key online influencers and social commerce.
The beverage swiftly moved to replace restaurants, bars, cafes and other on-trade channels by partnering with local food delivery providers for “food combo” pairing promotions. Similarly, it teamed with e-commerce marketplaces, including dedicated online stores. The brand also launched an in-house, direct-to-consumer beer delivery offering named Drinkies to promote at-home consumption.
With its ride hailing business suffering, Grab redeployed more than 100,000 drivers in six markets to deliver food and essential supplies. In Malaysia, Grab added new offerings for at-home purchases by accelerating the launch of GrabMart, an on-demand delivery service that connects offline retailers to consumers, focusing on essential goods.
Singapore grocer FairPrice doubled down on its online grocery presence, leveraging offline store inventories. Indonesian retailer Matahari is exploring ways to maintain the recent 17% monthly growth of its online business in a post-Covid-19 world. For example, to replicate the in-store experience, Matahari provides “live buying”.
As Covid-19 rewrites the rules, such flexibility will be a key for survival. Companies that view the pandemic as a catalyst for change and an opportunity to get closer to their consumers will maintain their footing and grow stronger in the recovery.
Praneeth Yendamuri is a Bain & Company partner based in Singapore. Dhruv Vohra is Facebook’s industry director for digital natives and technology.
Published in: The Edge Markets
Will there be a halal COVID-19 vaccine?
The scramble to develop a COVID-19 vaccine is pitting pharmaceutical companies and teams of researchers against one another, and nation against nation. The first successful vaccine will generate the developer immense revenues, and the first country where it is launched may have the first chance to inoculate its population.
The USA is trying to have a vaccine ready for Americans by the end of the year through Operation Warp Speed, last month selecting five pharmaceutical companies that will be given priority access for clinical trial facilities.
Global efforts are also afoot, with the European Commission-led Coronavirus Global Response raising $8.3 billion in May, of which $4.5 billion is towards finding a vaccine. In late June, the World Health Organization (WHO) released its Access to COVID-19 Tools (ACT) Accelerator, trying to raise $18 billion to speed up development and manufacturing of a vaccine to provide 2 billion doses by end-2021.
Such a collaborative approach is needed, particularly for the 57 Organization of Islamic Cooperation (OIC) countries, which have just 16 vaccine producers, according to Dr. Mohammed Ali Al Sheikh, a halal pharmaceuticals expert, in Istanbul.
“Most just produce one or two vaccines, and all vaccine and biotechnology developers are in non-Muslim countries,” Dr. Al Sheikh told Salaam Gateway.
Even more limited is halal-certified vaccine production, despite development of vaccines that do not contain haram (unlawful) ingredients, such as porcine.
Out of the more than 155 COVID-19 vaccines being developed as of today, none have indicated whether it will be halal-certified. Given the urgent need and importance of releasing a vaccine as soon as possible, it appears unlikely in the near term.
“There are so many other factors to be considered when evaluating the vaccines that I would expect halal certification to be delayed in the rush to bring a safe and effective vaccine to market,” said Rachel Howard, Director of Research Partnership, an independent healthcare market research and consulting agency in the UK.
Securing adequate supply of a vaccine against COVID-19 is likely to be the primary challenge, with marketing and being able to compete with other vaccines a secondary consideration for manufacturers, she added.
But once a successful vaccine is developed, the question for Muslims is whether it contains haram ingredients, such as porcine gelatin, which many vaccines currently do.
For a vaccine to be halal-certified, bovine or non-animal derived ingredients would have to be used instead, which can take up to 18 months to convert.
“It is not that hard. You don’t change the medicine, just the formula, but it takes time,” said Dr. Al Sheikh. “If halal standards were built into the development of a COVID-19 vaccine from the start, it wouldn’t be a problem to be certified. Imagine if three companies produce a COVID-19 vaccine and one is halal, they could sell to nearly 2 billion Muslims.”
The biggest obstacle to producing a halal COVID-19 vaccine is not whether it is possible, but certifying the vaccine.
AJ Pharma, a joint Saudi Arabian and Malaysian venture, has developed animal-component free vaccines, but did not get halal certification as standards are not yet up to par, the company told this reporter when interviewed in 2018 for the State of the Global Islamic Economy 2018/19 report published by DinarStandard, Salaam Gateway’s parent company. An AJ Pharma spokesperson confirmed on Monday (Jul 13) over the phone that its vaccines are still not halal-certified.
“From a halal perspective, there’s a real need to focus on standards,” said Shoeeb Riaz, operations director at the UK’s Halal Trust.
Halal pharmaceuticals have not however garnered significant attention from OIC countries, with Malaysia one of the few to have developed more robust pharmaceutical standards. Only last year did the OIC’s Standards and Metrology Institute for Islamic Countries (SMIIC) establish a committee to raise awareness about halal pharmaceuticals, while a standard is expected to be issued within two years.
“Right now, the big pharma companies don’t have halal on their agenda and, in general, OIC governments are still at the beginning phase of developing and investing in the sector,” said Dr. Al Sheikh.
The need for a universal standard and theological guidance around the COVID-19 vaccine is pressing, said Riaz. A particular challenge is that at least five of the 130 candidate vaccines are using aborted human fetal tissue, according to Science magazine, which could cause a religious and ethical backlash. There have been strong statements from the Catholic church on the matter.
“What we first and foremost need is for these issues to be addressed theologically. Certification bodies need to audit against a standard, which requires a theological intervention on the moral and ethical dilemmas facing people of faith,” said Riaz.
If the successfully developed COVID-19 vaccine uses either porcine or human fetal tissue, or both, it would delay the halal conversion of the inoculation, with any halal certification body approached by a vaccine developer expected to be under serious scrutiny.
“Whichever halal certification body jumps on it, they will open a hornet’s nest. They are in an almost untenable position,” said Riaz.
What has held back the development of halal pharmaceuticals and vaccines is that even if a product contains haram ingredients it is religiously permissible (mubah) for a patient if it is life saving. Fatwas, religious rulings, are expected for the COVID-19 vaccine, most probably based on the grounds of darurah, or necessity.
“While halal certification would certainly be preferable among the community, given the potential deadly threat of COVID-19, it seems reasonable to expect that exceptions - mubah - will be granted for the first vaccines to market, even if these do not appease some Muslim consumers,” said Howard.
Widespread acceptance of a vaccine, even if it is halal-certified, is expected to be challenging.
“Many eyeballs will be on COVID-19 vaccines, as amid polarization, suspicion of governments and people like Bill Gates interfering in medical matters, a lot of people, right or wrong, are getting suspicious,” said Riaz.
Rejection of the vaccine could hinder widespread immunity.
“The success of any COVID-19 immunization program could potentially be undermined by the efforts of anti-vaxxers or those objecting on religious and/or ethical grounds if their views gather sufficient momentum. The stance taken of the local religious authorities on this matter would hold much weight in the community when it comes to potential acceptance of such a vaccine,” said Howard.
Scientists have suggested that between 55% and 82% of the population would need to be vaccinated against COVID-19 to meet the minimum threshold for herd immunity. “Achieving high vaccination coverage rates will be critical,” she said.
If compulsory vaccination is imposed by governments, acceptance is likely to be higher.
“The majority of Muslims will take the vaccine if compulsory, and muftis and sheikhs say it is allowed even with non-halal ingredients. Problems may arise if it is not compulsory,” said Dr. Al Sheikh.
Published in: SalaamGateway.com 2020 All Rights Reserved
The voiceless sufferers of covid-19: Islam and Animal care
The Corona virus has locked people inside their homes and has caused the death of thousands of individuals. Apart from taking a heavy toll of human lives, it has paralyzed all the vital sectors of life, like trade and commerce, education, communication and transport. On the socio-cultural grounds it has created a serious trauma and has led to psychosomatic disturbances. The social web or fabric has seen a great set back and challenges due to the ongoing pandemic. But humans are not the lone sufferers of this crisis as it is now badly hurting animals as well. These helpless creatures are suffering as the lockdown has left them wandering on the streets for food. While the world fights Covid-19, the needy animals and birds from the streets require food. As we know thousands of stray cats, cows and dogs in India depend on food and waste from markets, restaurants and grocery shops. But with corona virus sending people into isolation and public establishments shutting down, strays are having a hard time finding food. As per some reports many stray animals have died due to starvation. Some disturbing pictures of animals like cats and dogs, panting, licking mud and biting shoes can be seen on social media. This speaks a lot about the pathetic conditions of these animals and seriously these creatures are going through the troubled times. As more and more people fall sick, the more rapidly, stray animals and birds are being ignored. The people are advised to stay home to avoid the spread of corona virus but the homeless, unvoiced and abandoned animals have been left at the mercy of their lord. These creatures need our care and attention. It is our collective job and obligation to feed these living beings. To be gentle and humane to all creatures of God is the universal message of all religions but Islam in particular is very clear about animal care and has guided its followers to take due care of every creature on earth.
The Islamic view of the natural order and the environment, as everything else that is Islamic, has its roots in the Quran, the very Word of the God, which is the central theophany of Islam. The Quran addresses not only men and women but the Whole of the cosmos. Humans in Islam are the central creatures of the earthly sphere, but can exercise power over things only in obedience to God’s laws. And divine law (al-shari`ah) specifically includes duties to the natural environment. Laws forbid pollution and instruct the planting of trees and gentle treatment of animals.
The concept of environment in Quran is distinct enough. It has given the values of unity, balance, order and harmony. The balance not only governs the structuring of the universe, it has specified each element with its proper place and definite function. The law of structural balance of the environment is often referred in the Quran by the words ‘Balance,’ ‘proportion,’ or ‘measure’. The Quran presents the whole material world and the animal kingdom in particular, as a divine miracle to which man must respond with self-restrain. As one sonorous verse puts it: “Do you not see that Allah is exalted by whoever within the heavens and on the earth, and by the birds with wings spread? Each of them has known his means of prayer and exalting.” (Quran 24:41)
In mediaeval times, writes historian Gustave le Bon, “Animals enjoyed heaven in the Muslim world.” Trusts were solely devoted to sick and vulnerable creatures. The Muslims in 18th century Cairo, setup bread and water foundations for dogs. In Damascus, a municipal area was dedicated to ageing horses where they could pasture in dignity until the end of their lives, which continued until the 20th century.
From the start of an animal’s life to its end, there were clear rules on maintaining its welfare. Mercy to animals goes hand in hand with faith as Prophet’s (Pbuh) words articulate, “He who take pity even on a sparrow and spares its life, God will be merciful to him on the day of judgment.”
Islam talks a lot about the Ummah or global community of believers; some interpretations give the term a broader meaning, embracing humanity as a whole. As eco-Muslims often recall, the Quran also insists that other species constitute Ummah-like communities, which are correspondingly worth of respect. “There is no creature on earth, nor any bird that flies with its wings, but are communities (Ummah) like you. We neglected nothing in the scripture. Then to their lord they will be gathered.” (Quran: 6:38)
Furthermore, Muslims believe that all creations of Allah, including animals and trees, glorify God in their own way. “Seest thou not that to Allah bow down in worship all things that are in the heavens and on earth, the sun; the moon; the stars; the hills; the trees; the animals; and a great number among mankind?” (Quran 22:18) Islam also teaches humans that all creatures of God, whether it is the tiny ant or the huge lion, serve a certain purpose in the large scheme of God’s world. “There is not an animal (that lives on the earth, nor a being that flies on its wings, but (forms part of) communities like you. (Quran 6:38)
The Prophet (Pbuh) said, “Whoever kills a sparrow or anything bigger than that without a just cause, Allah will hold him accountable on the day of judgment.” The listeners asked, “O Messenger of Allah, what is a just cause? The Prophet (Pbuh) replied, “That he will kill it to eat, not simply to chop off its head and then throws it away.” (Sunan Abu Dawud-2/11)
Abu Hurairah (may Allah be pleased with him) reported that the Prophet (Pbuh) said, “A man felt very thirsty while he was on the way; there he came across a well. He went down the well, quenched his thirst and came out. Meanwhile he saw a dog panting and licking mud because of excessive thirst. He said to himself, “This dog is suffering from thirst as I did.” So, he went down the well again, filled his shoe with water, held it with his mouth and watered the dog. Allah appreciated him for that deed and forgave him.” The Companions said, “O Allah’s Messenger! Is there a reward for us in serving the animals?” He replied: “There is a reward for serving any living being.” (Bukhari)
Teasing or mutilating any living being, be that an animal or a bird is disapproved and abhorred in Islam. The Prophet (Pbuh) says, “May God curse anyone who maims animals”? (Bukhari) While as good and humane treatment is applauded in Islam, “Whoever is kind to the creatures of God is kind to Himself.”(Bukhari) On discovering a companion had caused distress to a bird by taking her young, Mohammad (Pbuh) ordered him to return them at once. (Sahi Muslim)Hence irresponsible wanton killing of even the tiniest of God’s creatures is strongly discouraged in Islam. He (Pbuh) even reprimanded those who sat idly on their camels and horses with the warning, “Do not treat the backs of animals as chairs. “God gave these to your command only on the condition that you may go with them easily to places you would not been able to go by yourself without extreme trouble.”(Abu Dawud, 61, )
Animals should be cared for; Abdullah Ibn Umar (May Allah be pleased with him) narrated that the Prophet said, “ A women entered the (Hell) fire because of a cat which she had tied , neither giving it food nor setting it free to eat from the vermin of the earth.”[Bukhari…Narrated by Abdullah bin Omar].
We have seen that there are clear references in Holy Scriptures of Islam about the due place and position of animals and birds in the Gods scheme of the world. And the believers have been guided and instructed to be gentle and humane towards these creatures of God. There is a due reward for feeding a starving being be it an animal or a bird. As the Prophet of Allah (Pbuh) has said, “There is a reward for serving any living being”. Along with taking care of poor and needy it is our duty to serve animals living around us. The crisis will not remain longer but our attitude and character shown to helpless and voiceless will be remembered for long.
Published in: Modern Diplomacy, April 28, 2020
Using Islamic finance may have saved Hertz from filing for bankruptcy protection
They say hard times bring out the best and worst in people. Long queues at Labour Department offices, soup kitchens and homeless shelters have become common sights after Covid-19 unleashed its wrath.
Covid-19 has shown us the frailty of the life we live and of the system that the capitalist ideology has built. This is exactly what our society has looked for as long as we can remember — a constant tug of war between the capitalist class and the working class.
The capitalist class represents the rich capital owners, owners of large corporations and of vast investment wealth.
It subjects the working population by buying labour at the labour market to service its capital through vehicles called corporations. Corporations have to borrow money since they cannot raise all the capital they need from issuing shares which means that another capitalist, the creditor, now has a staked interest in the corporations.
Banks, large money managers and other non-financial institutions participate in funding corporations through debt and equity. This combination of owner and creditor capitalist interests is put to the test during times like these.
Capitalism has created a hostile system where a corporation is threatened with the proceeding of its creditors against it if doesn't meet their demands.
Corporations scramble to save on any expenses they can to meet their debt payments and often resort to the easiest way to cut costs, laying off their workers.
With virtually no bargaining power, there's nothing workers can do when creditor interests are threatened.
Capitalists come first. They built the system and set the rules. Without employment, the economy comes to a virtual halt, which only exacerbates the predicament of creditors.
Consider Hertz, a car rental business which has run a very successful model for over 100 years withering due to the rise of unique and formidable compe-titors, such as Uber, and the ultimate foe of traditional business, technology.
There's one such adversary that Hertz could never hope to stand against: its creditors — large banks and other major corporations that have lent Hertz huge loans which it has failed to repay.
On the evening of May 22, Hertz filed for Chapter 11 bankruptcy protection for its United States business.
The typical procedure requires the reorganisation of assets and debts and the liquidation of certain non-inventory assets, perhaps at large losses, for the creditors to recuperate some of their capital.
The layoff of thousands of workers should come as no surprise. The failure of Hertz demonstrates a fundamental flaw of the capitalist system: its tendency to decimate perfectly good businesses and decades' worth of progress, all for the capitalist to recover a meagre portion of its investment.
Islamic finance attempts to relink the financial system to the real economy, strike a fine balance between asset-based and debt-based finance, and establish justice in the economic system through arrangements that do not allow the capitalist to wield such unfettered power.
Without profits, financiers are disincentivised to loan and in-stead opt to invest in ownership.
Consider if Hertz had instead issued sukuk. Sukuk are essentially bonds, but which are not standing debt obligations.
Instead, they represent an investment in the ownership of the issuing corporation's assets which pay dividends. Sukuk are issued to raise capital which the investor pays and receives certi-ficates backed by the underlying assets, held by a trustee in the interest of sukuk holders.
Any proceeding against the issuer in the case of a failure would not necessarily be in the interest of the sukuk holders, especially if the business model, like that of Hertz, has worked for over 100 years! They may instead opt to allow the business to recover in hopes that the value of their certificates also recovers. Hertz could have been saved in this way.
Hertz is only a prelude to the great economic chaos that's
predicted to ensue as an inevitable consequence of the forces of Covid-19 and capitalism. While Islamic finance practice is far from ideal due to the pressures from the hegemony of conventional finance, it does provide an ideal solution, theoretically.
After 400 years of a failed capitalist experiment, it's only sensible that an alternative such as Islamic finance is considered.
The writer is a researcher in Islamic finance. He holds a BBA in Finance from the University of Toronto, a BA in Islamic law, and an MSc in Islamic finance from the International Islamic University of Malaysia
Published in: New Straits Times, June 19, 2020
Islamic finance takes on COVID-19
As the global development community responds to the COVID-19 pandemic, a diverse and inclusive set of stakeholders must be engaged to address the enormous challenge. While the crisis has created immense human suffering, it has also sparked worldwide action from institutions and people eager to help.
The UN Secretary-General’s Call for Solidarity, on March 19th, outlines three components; tackling the health emergency; focusing on social impact in the response and recovery; and helping countries recover more sustainably for the long term.
UNDP’s Integrated Response to COVID-19 offers support and guidance to counties to prepare, respond, and recover. The immediate priorities identified in the response include health systems support, inclusive and integrated crisis management and response, and social and economic impact needs assessment and response.
Islamic finance can be part of the COVID-19 response through a range of financing instruments well-suited for each stage.
Emergency support in the short term
Zakat can be an important component of national and NGO emergency support programmes. Donors typically require that Zakat be disbursed within one year of being given. This focus on immediate benefit is well suited for crisis response. Zakat donors support both the poor and the economically insecure, an area of increased need in the pandemic. Zakat donors often give cash transfers, which can be especially important in emergencies.
Individual philanthropy is a broad tool that can be used to support health care, food and other immediate needs. Corporate philanthropy can be a way for businesses to contribute not only money but also goods and expertise.
UNDP’s partnership BAZNAS, Indonesia’s national Zakat collection agency, has been in place since 2017. This collaboration is an example of how Zakat stakeholders can systematically link their projects with the Sustainable Development Goals, including in response to crises. UNDP’s partnership with the World Zakat Forum launched in 2019, lays the groundwork for members to work with UNDP on SDG alignment worldwide.
UNDP’s recently-announced partnership with the Dubai Islamic Economy Development Center is a reflection of how UNDP can support private-sector companies on social impact. UNDP has tools and frameworks by which firms can align their business activities and corporate giving with specific SDGs.
Response and recovery in the medium term
The financing of equipment, vehicles, and other sources of livelihood and trade finance are key mechanisms by which Islamic banks and financial institutions can support recovery. Aligning their financing activities with the SDGs is a significant opportunity for Islamic banks. In 2018, the Al Baraka Banking Group launched a collaboration with UNDP that seeks to align over US$600 million of its financing portfolio with the SDGs in the Middle East, Asia, Africa, and Europe. The coronavirus pandemic makes such initiatives all the more urgent.
Impact investing – private investment prioritizing businesses with social impact – can play a central role in the recovery. UNDP’s Global Islamic Finance and Impact Investing Platform, launched in 2015 in partnership with the Islamic Development Bank Group, brings global impact investing expertise to Islamic finance.
Long-term recovery and resilience
SDG-aligned sukuk (bond equivalents) can be an important source of long-term capital for governments and companies engaged in the COVID response and recovery. UNDP’s support of the Government of Indonesia’s Green Sukuk, including a US$1.25 billion issuance in 2018, is a prime example of how issuers can partner with UNDP to identity, track, and report on their SDG impact. They provide a decade of funding for Indonesia’s National SDG Plan.
UNDP has, through its Green Sukuk Initiative, held workshops and other outreach with partners in Malaysia, Pakistan, and beyond. As the pandemic has made long-term funding for development all the more crucial, UNDP stands ready to help.
Waqf endowments can, in many contexts, be important contributors to long-term resilience. Financial or non-financial assets such as land or buildings are permanently dedicated to social purposes. This can be an important way for stakeholders to contribute to social infrastructure that serves the SDGs and, in the words of the UN Secretary-General, help countries “recover better” over the long term.
This is a time for new ways to help tackle the devastation of COVID-19 and invest in sustainable development. Islamic finance has the tools for each stage of the response. UNDP stands ready to help countries and communities unlock these vital partnerships and instruments to respond to the pandemic.
Published in: UNDP.org
How coronavirus challenges Muslims’ faith and changes their lives
As the world faces the greatest disruption of our lifetimes, Muslims throughout the world are also grappling with the repercussions of the coronavirus pandemic.
But the Islamic cultural, spiritual and theological dimensions offer Muslims myriad ways of coping.
Adapting to new social norms
Muslims have relatively large families and tend to maintain extended family relations. Prophet Muhammad encouraged Muslims to keep strong family ties. The Quran inspires Muslims to be generous to kin (16:90) and treat the elderly with compassion (17:23).
These teachings have resulted in Muslims either living together as large families or keeping regular weekly visits and gatherings of extended family members. Many Muslims feel conflicted about the need to apply social distancing on one hand and the need to be close to family and relatives for comfort and support. Tighter restrictions on movement in some parts of Australia (NSW and Victoria) mean Muslims, like everyone else, are not allowed to visit extended family anymore.
One of the first changes brought about by social distancing has been to the Muslim custom of shaking hands followed by hugging (same gender) friends and acquaintances, especially in mosques and Muslim organisations. After a week or two of hesitation in March, the hugging completely stopped, making Muslims feel dismal.
Visiting the sick is considered a good deed in Islam. However, in the case of COVID-19, such visits are not possible. Checking up on those who are sick with phone calls, messages and social media is still possible and encouraged.
Cleanliness is half of faith
One aspect of coronavirus prevention that comes very naturally to Muslims is personal hygiene. Health organisations and experts promote personal hygiene to limit the spread of coronavirus, especially washing hands frequently for at least 20 seconds.
Islam has been encouraging personal hygiene for centuries. The Quran instructs Muslims to keep their clothes clean in one of the earliest revelations (74:4), remarking “God loves those who are clean” (2:222).
More than 14 centuries ago, Prophet Muhammad emphasised “cleanliness is half of faith” and encouraged Muslims to wash their hands before and after eating, bath at least once a week (and after marital relations), brush their teeth daily, and to groom their nails and private parts.
Additionally, Muslims have to perform a ritual ablution before the five daily prayers. The ablution involves washing hands up to the elbows, including interlacing of fingers, washing the face and feet, and wiping the hair.
While these do not completely prevent the spread of disease, they certainly help reduce the risk.
An interesting detail is that Muslims are required to wash their genitals after using the toilet. Even though Muslims use toilet paper, they are required to finish cleaning with water. This requirement led to some Muslims installing bidet sprayers in their bathrooms.
Closure of mosques and Friday services
Congregational prayers in mosques are important for Muslims in instilling a sense of being in the presence of the sacred, and a sense of being with other believers. Accordingly, they line up in rows with shoulders touching. This arrangement is extremely risky during a pandemic. Australian mosques are now closed because of coronavirus.
Deciding to skip optional daily congregational prayers was not too difficult for Muslims, but stopping Friday prayers has been more challenging. Friday prayer is the only Muslim prayer that has to be performed in a mosque. It consists of a 30-60 minute sermon followed by a five-minute congregational prayer conducted just after noon.
Stopping Friday prayers on a global scale has not occurred since it was introduced by Prophet Muhammad in 622, after he migrated to the city of Medina from the persecution he and his followers endured in Mecca.
Iran was the first to ban Friday prayers on March 4. While countries like Turkey and Indonesia tried to continue Friday prayers with social distancing, it did not work, and soon the entire Muslim world closed mosques for prayer services.
Fortunately for Muslims, the closure of mosques does not mean they stop daily prayers altogether. In Islam, individual prayers and worship play a greater role than communal ones. Muslims can pray five times a day wherever they are, and often home is a place where most praying takes place.
The void left by ending of Friday sermons in mosques has been filled to some extent by Friday sermons offered online.
Effect on Ramadan and the annual pilgrimage to Mecca
Two of the five pillars of Islamic practice are the fasting in Ramadan and the annual pilgrimage to Mecca.
Ramadan is only three weeks away. It starts in the last week of April and goes for a month. During this month, Muslims refrain from eating, drinking and marital relations from dawn to sunset on each day of the month. This part will not be affected by COVID-19.
Associate Professor in Islamic Studies, Director of The Centre for Islamic Studies and Civilisation and Executive Member of Public and Contextual Theology, Charles Sturt University
Published in: The Conversation
Islam prioritizes humanity during pandemic
Humanity, or al-insaniyyah in Arabic, can be interpreted simply as all things related to human beings; our existence, activities and needs from the cradle to the grave.
The needs of human life have been enshrined as basic rights or human rights, a legal concept that every individual has inherent rights because he or she is a human being.
During Indonesia’s coronavirus epidemic, humanity can be seen from three perspectives: religion, humanity itself and nationality, or Indonesian-ness.
The Islamic term maqasid sharia refers to the objectives of sharia as a legal concept which asserts that every Islamic law is for a certain purpose as stated in the Quran and the hadiths.
Maqasid sharia comprises five universal principles: (1) protecting the soul/life (hifdzun nafs); (2) protecting religion/belief (hifdzud din); (3) protecting reason/mind (hifdzul aql); (4) protecting the offspring (hifdzun nasl); and (5) protecting property/ownership (hifdzul mal).
Among these five universal principles that underlie human rights in Islam are two views on which principle is the most important. For many pious followers of Islam, the most important is protecting religion or belief and therefore, anything can be sacrificed for this purpose. As a result, many people still insist on attending congregational Friday prayers at mosques, even if the entire congregation faces the risk of exposure to the novel coronavirus – and possibly exposing their families, too.
For the proponents of human rights and humanity, the most important principle is protecting life or the soul. The other principles – including the principle of protecting religion or belief – can be put off, modified or even ignored to protect the soul.
Religious leaders from groups like the Indonesian Ulema Council (MUI), Nahdlatul Ulama (NU), Muhammadiyah and others have issued fatwas and appeals on worshiping during the COVID-19 epidemic.
For example, prayer is for upholding religion as the hadith affirms: “Prayer is the pillar of religion; he who prays preserves religion, and he who abandons it destroys religion.”
But the requirements for prayer can be reduced (rukhshah) for humanitarian reasons. For example, the requisite five daily prayers can be combined and shortened during a journey, or adjusted for the ill and the disabled.
In terms of curbing the transmission of the coronavirus, the congregational prayers that are usually held at a mosque should be replaced by praying at home. Even the Friday prayer and Eid (Idul Fitri) prayer that must be held as a congregation at a mosque or in an open field can be replaced with a group prayer with family members at home.
Another example is the haj pilgrimage, which is also obligatory for Muslims that are able both physically and financially. However, it can also be postponed for humanitarian reasons. COVID-19 is not the only pandemic in haj history that has temporarily halted the pilgrimage.
Humanitarian principles are generally intertwined with the national interest. During Indonesia’s war of independence, for instance, human lives had to be sacrificed in battle against the colonial rulers for the sake of an independent nation. However, during an epidemic, the national interest must be sacrificed for humanity.
According to Finance Minister Sri Mulyani Indrawati, the government has allocated over Rp 400 trillion (US$26.81 billion) in state spending for health intervention measures, a social safety net, industry support and as incentives to help the financial sector toward economic recovery.
Many plans and projects prioritized for national development have been postponed or canceled, with their budgets reallocated to the various efforts to mitigate the outbreak. Human life is everything to a nation. A nation’s leader must not sacrifice humanity for the sake of the national interest.
In this time of COVID-19, no one should be selfish, whether for their faith or the national interest. Religious egoism and the national interest must step aside for the urgent need to protect and save lives during the pandemic.
Published in: The Jakarta Post
Webinar: Covid-19 from the Perspective of Islamic Theology and Spirituality
Webinar: Health Security & Public Participation Post Covid-19
Repayment moratorium in Malaysian Islamic banks
The COVID-19 outbreak has led to the implementation of the Movement Control Order (MCO) in Malaysia since the 18th March 2020. The MCO has mandated the closure of all government and private premises — except those involved in essential services. This measure has impacted the cash flow of both the general public and SMEs, affecting their capability to fulfill bank obligations.
In view of the aforementioned, the government on the 25th March 2020 announced a six-month moratorium on loan/financing repayments starting the 1st April 2020. According to Bank Negara Malaysia (BNM), this moratorium is expected to ease the cash flow of SMEs and individuals that are mostly affected by COVID-19. This brief article sheds critical light on the repayment moratorium from the perspective of Shariah.
In Islam, the creation of indebtedness — within the capability to repay it, be it resulting from a benevolent loan or deferred sale contracts, is permissible. However, a debtor is responsible for paying his obligation in a timely manner or as demanded by the creditor. Failure to fulfill a timely payment by a solvent debtor is deemed a breach of other rights and may be subject to punishment. However, if a debtor is facing genuine difficulty in paying his obligation in due time, the creditor should grant the debtor a time extension for payment. According to the Quran: “And if someone is in hardship, then [let there be] postponement until [a time of] ease (2:280).”
Muslim jurists agree that a creditor is obliged to provide a postponement of payment to an insolvent debtor until he is financially capable of paying it. They also prohibit any increase over and above the outstanding amount of the obligation as a result of the given postponement of payment, for this will trigger the issue of Riba Jahiliyah or Nasiah.
The BNM’s new release on the 1st May 2020, however, allowed the recognition of accrued profit over the deferment period for hire purchase and fixed-rate Islamic financing. This has invoked various contentions and criticisms on how BNM communicates its policy. Nevertheless, this position was later reversed by the minister of finance on the 6th May 2020, which affirms that the moratorium will not invoke any extra charges, including modification loss.
On the whole, a debtor in Islam is classified into two types: a solvent debtor and an insolvent debtor. A solvent debtor is compelled to fulfill his timely obligation, thus is not entitled for an extension of payment. The debtor’s refusal to make a timely payment, while being able to pay it, might be subject to punishment. In some incidents, the forced selling of collateral and court action are necessary to recover the creditor’s outstanding debt. On the other hand, an insolvent debtor shall be given a sufficient extension of time to settle his obligation until he is financially capable of paying.
The moratorium policy should, therefore, take into consideration the status of bank customers and apply only to insolvent customers, with the exclusion of solvent customers. The banks are, therefore, granted the authority to identify their customers’ eligibility for a moratorium. This approach is line with the ultimate objectives of the shariah on the protection of both life and legally-owned property of customers.
For Islamic banks, the approach on the selective moratorium policy will ensure their financial liquidity and business sustainability amid this extraordinarily challenging time. Applying an automatic moratorium for all customers, irrespective of their financial capabilities, would deepen further the fall in Islamic banking revenues.
This is particularly true since Islamic banks in Malaysia have already suffered from low margins resulting from the slashing of BNM’s base rate to 2.5%, low fee-based income due to lesser demand for certain banking services, slow growth in financing amid COVID-19, lower oil prices and a drop in investment avenues due to a capital market slump.
Besides, COVID-19 has exposed Islamic banks to an increase in non-performing financing or credit default risk due to a high number of business closures and increase in unemployment. Currently, thousands of consumers are being placed under quarantine as part of the Enhanced MCO. As a result, these consumers might lose their ability to pay installments, particularly of mortgages. The closure of businesses would lead to cash flow problems, which in turn will affect their capability to fulfill the bank installments.
The pandemic might also bring liquidity risk to Islamic banks because new depositors have an increasing preference for short-term safe assets and safe haven investment portfolios such as gold. On the other hand, as indicated earlier, credit risk will increase significantly due to the rise in the number of business shutdowns and the unemployment rate. Consequently, demand for liquidity arises. Even existing depositors have now started withdrawing their savings for their daily spending, to sustain their life and livelihood.
Siti Fariha Adilah Ismail, a Masters in Islamic Finance Practice (MIFP) student at the International Centre for Education in Islamic Finance (INCEIF), The Global University of Islamic Finance assisted in authoring this report.
Published in: Islamic Finance News (IFN), 22 May 2020