Abdullah al Muheiry, the secretary general of the Zakat Fund, says wealthy Muslims are still not paying enough.
Abdullah al Muheiry, the secretary general of the Zakat Fund, says wealthy Muslims are still not paying enough.
Abdullah al Muheiry, the secretary general of the Zakat Fund, says wealthy Muslims are still not paying enough.
Abdullah al Muheiry, the secretary general of the Zakat Fund, says wealthy Muslims are still not paying enough.

Zakat alms contributions double to Dh8.6 million


Haneen Dajani
  • English
  • Arabic

ABU DHABI // Islamic alms contributions paid through the Government have almost doubled in the first few months of the year, the Zakat Fund revealed yesterday. Revenues from individuals rose by 93 per cent in the first quarter of this year compared with the same period last year, to Dh8.6 million, and the number of contributors rose by almost 40 per cent. Zakat is the Islamic alms tax mandated for every financially able Muslim and its provision is the third pillar of Islam. The Zakat Fund is a government authority created in 2003 by Sheikh Zayed, the founder of the UAE, to receive and distribute Zakat contributions and to raise awareness of the Islamic tradition. Contributions usually spike in the holy month of Ramadan. The agency's total revenues in 2009 were Dh67 million.

Abdullah al Muheiry, the fund's secretary general, said the rise in revenues was the result of increased transparency about its budget and activities. "We adopt a policy of transparency between us and the Zakat provider, who should know where his money is going," he said. Despite the increase in revenue, Mr al Muheiry said he believed that wealthy Muslims were still not paying enough. "The increase does not match the amount of money being invested in the country and the continuous rise in the number of millionaires in the UAE, who now number in the tens of thousands," he said.

Abdullah al Araby, the imam of Dubai's Airport Mosque, said work still needed to be done to increase trust and adherence to Zakat. "People need to know that there is a Zakat Fund and that they can trust it," he said. While the fund had the name of an obligatory Islamic duty, most people viewed it as a charity organisation, he said. "My understanding is that it's a charity organisation that I can just give Dh1,000 or Dh2,000 to," he said. "The Zakat collector does not come to your house like in the past to find out how much you own, calculate the Zakat and then take it from you."

The basic annual Zakat rate is 2.5 per cent on financial assets, with varying rates for other assets, such as gold or livestock. Richer people were less amenable to paying Zakat since they had to pay larger sums of money than ordinary people, Mr al Araby said. "If you have 40 million, then you're going to have to pay one million from that." In addition, Zakat carried few immediate benefits for giving up money, whereas other Islamic obligations, such as Ramadan fasting, had an enjoyable social element to it and the Haj pilgrimage involved travel and tourism.

This meant, unfortunately, that less attention was being paid to Zakat as a duty, he said. "If every member of society pays the Zakat you would not find one needy person in this country,"Mr al Araby said. A recent survey by YouGov Siraj found that almost one third of UAE respondents mistrust charities because they lack accountability. Ahmed al Muhairi, a middle-aged Emirati, said he preferred to give his Zakat money to direct sources rather than to the Zakat Fund or the Red Crescent Authority.

"Sometimes I give to the fund or Waqf [an Islamic trust fund], but I don't really trust them," he said. He said he gave his money to a trusted man who is very religious and distributed it in Kalba, Fujairah and rural areas in the Emirates. "Zakat Fund will complain about a lack of budget no matter how much money they get. So does the Marriage Fund, they receive a lot of money from the Government and their budget is huge but they still complain," said Mr al Muhairi.

Shadia abu el Farraj, a 52-year-old Syrian housewife and charity worker, said she gave her Zakat money to various sources inside and outside the UAE, but she never thought of giving it to the Zakat Fund. "Spending the Zakat money should be done officially through the state, as they can see where the poor people are and then build projects that will help decrease poverty, but when states grew and communities scattered around the place, people became afraid that the money would not reach the right people, so people started giving out the Zakat on their own." She said it became traditional for certain trusted people to collect Zakat money and take on the responsibility of distributing it.

"I personally give my Zakat money inside the UAE to low income families that I know, or widows who have many children and can't afford to enrol them in school for example." @Email:kshaheen@thenational.ae hdajani@thenational.ae

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

The specs

Engine: 4.0-litre V8 twin-turbocharged and three electric motors

Power: Combined output 920hp

Torque: 730Nm at 4,000-7,000rpm

Transmission: 8-speed dual-clutch automatic

Fuel consumption: 11.2L/100km

On sale: Now, deliveries expected later in 2025

Price: expected to start at Dh1,432,000

GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

Global state-owned investor ranking by size

1.

United States

2.

China

3.

UAE

4.

Japan

5

Norway

6.

Canada

7.

Singapore

8.

Australia

9.

Saudi Arabia

10.

South Korea

Email sent to Uber team from chief executive Dara Khosrowshahi

From: Dara

To: Team@

Date: March 25, 2019 at 11:45pm PT

Subj: Accelerating in the Middle East

Five years ago, Uber launched in the Middle East. It was the start of an incredible journey, with millions of riders and drivers finding new ways to move and work in a dynamic region that’s become so important to Uber. Now Pakistan is one of our fastest-growing markets in the world, women are driving with Uber across Saudi Arabia, and we chose Cairo to launch our first Uber Bus product late last year.

Today we are taking the next step in this journey—well, it’s more like a leap, and a big one: in a few minutes, we’ll announce that we’ve agreed to acquire Careem. Importantly, we intend to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha. I’ve gotten to know both co-founders, Mudassir and Magnus Olsson, and what they have built is truly extraordinary. They are first-class entrepreneurs who share our platform vision and, like us, have launched a wide range of products—from digital payments to food delivery—to serve consumers.

I expect many of you will ask how we arrived at this structure, meaning allowing Careem to maintain an independent brand and operate separately. After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each. Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region.

This acquisition is subject to regulatory approval in various countries, which we don’t expect before Q1 2020. Until then, nothing changes. And since both companies will continue to largely operate separately after the acquisition, very little will change in either teams’ day-to-day operations post-close. Today’s news is a testament to the incredible business our team has worked so hard to build.

It’s a great day for the Middle East, for the region’s thriving tech sector, for Careem, and for Uber.

Uber on,

Dara

The specs

Engine: 6.2-litre V8

Transmission: ten-speed

Power: 420bhp

Torque: 624Nm

Price: Dh325,125

On sale: Now

Know your Camel lingo

The bairaq is a competition for the best herd of 50 camels, named for the banner its winner takes home

Namoos - a word of congratulations reserved for falconry competitions, camel races and camel pageants. It best translates as 'the pride of victory' - and for competitors, it is priceless

Asayel camels - sleek, short-haired hound-like racers

Majahim - chocolate-brown camels that can grow to weigh two tonnes. They were only valued for milk until camel pageantry took off in the 1990s

Millions Street - the thoroughfare where camels are led and where white 4x4s throng throughout the festival

PROFILE OF SWVL

Started: April 2017

Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh

Based: Cairo, Egypt

Sector: transport

Size: 450 employees

Investment: approximately $80 million

Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani

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