Zakat
& Social Security
in Yemen
Presented for: Arab Forum "Towards a New
Welfare Mix: Rethinking the Roles of the
State, Market and Civil Society in the Provision
of Basic Social Services"
19- 20 December 2012 , ESCWA, Beirut,
Lebanon
Rasha Jarhum,
Social Research Consultant
1
This Presentation
20m
• Background
• Zakat in the Legislations
• Zakat in Social Protection Framework
• Zakat Management Model
• Zakat Types and Zakat Revenues
• Zakat Beneficiaries & Disbursement
• Beneficiaries Targeting & Selection
• Conclusions and Implications
2
Background
• Yemen was created in 1990 following the unification of Yemen Arab
Republic (North), and the Peoples Democratic Republic of Yemen
(South).
• The country went through a turbulent formation process following
the unification, resulting in a brief yet devastating civil war in 1994,
with political repercussions that destabilize the country until today.
• Population growth outpaces economic development, putting
immense pressure on the country to meet any of the MDG goals.
Indicators
1990
2000
2010
Population
11.9m
17.7m
24m
National income *1
$45.3b
$55.3b
$105.2b
Public Expenditure
16%
14%
12%
GDP per capita *2
$1812
$2120
$2372
Data Source: World Bank Group Database *1: Constant 2000 US$ *2: Constant 2005 International $
3
Zakat in the Legislative Framework
 Pre-revolution 1962 & 1967: Speculator System
 1970s – 80s: First Institutional Mechanisms (North)
 Post 1994 Constitution
 Zakat Laws 1996 & 1999
 Local Administration Law 2000
 Social Welfare Fund Law 2008
 New Law Project for Independent Authority for Zakat and
Social Protection 2012
4
Zakat in the Social Protection Framework
Regulating Social Protection in
Yemen:
 The
Third Fifth Development
Plan for Poverty Reduction
(DPPR) 2006-2010, emphasized
establishing Social Safety Nets
(SSN) as THE major mechanism
for reducing poverty.
 Transitional
Plan for Stability
2012 -2014 identified social
security systems as top priority
for
immediate
economic
stabilization.
 Social
Protection
spending
planned to increase by 17% in
2012.
Social Protection
Government Spending %
25
20.03
20
15
10
5
0.24
2.4
2.59 2.35
2.62
0
2007 2008 2009 2010 2011 2012
Social Protection…
Source: MoF, Statistics Newsletter, 2012
5
Zakat in the Social Protection Framework Cont
 Classification of Social Protection Systems based on
governance structures and modalities:
 Formal systems: Pensions, Social Welfare Fund (SWF)
 Semi-Formal: Zakat, Welfare organizations & CSOs
 Informal: Family/Tribal networks, faith-based organizations
 Why is Zakat Semiformal?
 Legal and Regulatory framework exists, but incomplete.
 Disorganized mechanism with serious inefficiencies.
 Lack of popular trust with perceptions of corruption.
 No obligation of accountability.
6
Zakat Management Model
Zakat Collection:
- Local Administration
- CSOs
- Faith-based Org.
Zakat Distribution:
- Local Administration
- Individuals 25%
- SWF
- CSOs
- Faith-based Org.
Zakat Collection
Zakat Preparations
• targeting & selecting
donors
• setting Zakat
Collection dates
• Policy and strategies
development
• Zakat Awareness
Campaigns
• Notifying Donors
• Zakat Donors Disclosure
• Zakat Amounts Approval
• Monitoring Zakat
Collection
• Cases
• & Appeals
Zakat Distribution
• Beneficiaries targeting &
selection
• Registration
• Financial aid distribution
• Monitoring and evaluation
7
Zakat Types
No
Zakat Type
Value
Remarks
Livestock Zakat
More or less the value ranges
between a female baby goat to
a female camel according to
the quantity*
Detailed calculation is mentioned in the law,
as well as, quorum and categories are clearly
mentioned.
2
Gold & Silver Zakat
2.5%
3
4
Liquidity Zakat
2.5%
1
Commercial &
Trade Zakat
2.5%
-The law states that the bylaw will elaborate
the type of Trade, conditions, and
application.
-Quorum for Zakat is not clear as well as types
of Trade included.
5
10% if naturally irrigated
Cultivation Zakat
5% if artificially irrigated
Zakat value was set when Yemen's Economy
was based on agriculture and cultivation.
It doesn't set a zakat quorum or define
categories.
8
Zakat Types – Cont.
No
Zakat Type
Value
6
Leased Products
2.5%
Honey, Livestock, &
Marine Products
For honey 5%
For livestock 2.5% (similar to Trade
Zakat)
For Marine products 2.5%
Income Zakat
Calculated similar to Trade Zakat.
7
8
9
Remarks
It doesn't specify when it is due
It doesn't set a quorum for Zakat for
marine products or define its
categories.
It doesn't specify when it is due, Zakat
Quorum or types included.
Rikaz & Minerals
20%
Fitr Zakat
Equal to around 2.5 kilograms or 5
pounds worth of basic good per
household person
10
The law states that the bylaw will
define the types, calculations,
conditions, application, and
beneficiaries.
Specifies the poor as beneficiaries for
this type of Zakat
9
Zakat Revenues in Yemen
Indicators
Number of poor people in millions
(Multi-Poverty Index)
% of poor below National Poverty
Line
Zakat Revenues % of State's
Revenues
Zakat Revenues in USD
Zakat Annual Growth rate
Government spending on Social
Protection in USD
Social Protection Spending %
Number of Beneficiaries of SWF
SWF Aid in USD
2010
11.7
2011
2012
0.65%
0.60%
0.71%*
56,106,976
10.39%
231,576,744
48,302,325
-13.91%
246,734,883
69,934,883*
44%*
2,490,530,232*
42%
2.35%
1,036,953
184,996
2.62%
1,014,159
20.03%*
NA
187,738
NA
* Sources: MPI, MoF Financial Statistics Newsletter 2012, CSO 2011 Statistics Book
10
Zakat Revenues Growth Rate
Zakat Revenues Growth Rate %
2007 -2012
50
44.79
40
Others
Grains
5%
4%
34.49
30
20
10
21.41
10.92
10.39
2007 2008 2009 2010
Qat
7%
Fitr
9%
0
-10
Zakat Revenues % by
Type in 2011
2011
2012
Vegetables
2%
Livestock
1%
Public &
Mixed
Trade
18%
Individual
12%
-13.91
-20
Zakat Revenues Growth Rate
Source: MoF, Statistics Newsletter, 2012
Private
Trade
42%
Source: MoF, Final Accounts for Local
11
Administration, 2011
Zakat Type as per Governorate
Raima
Dhale'a
Amran
Al-Jouf
Mareb
Mahwait
Al-Baidha
Sa'ada
Al-Mahra
Shabwa
Dhamar
Hajjah
Abyan
Ibb
Lahj
Hodaidah
Hadramout
Taiz
Aden
Sana'a
Capital Secretariat
Grains
0%
10%
Qat
Veggies
20%
Livestock
30%
40%
50%
Public & Mixed Sector
60%
Private Sector
70%
80%
Individuals
90%
Fitr
100%
12
Others
Zakat Revenues Vs SWF Allocation in millions
2011
4000.00
3500.00
3000.00
2500.00
2000.00
1500.00
1000.00
500.00
Raima
Dhale'a
Amran
Al-Jouf
Mareb
Mahwait
Al-Baidha
Sa'ada
Al-Mahra
Shabwa
Dhamar
Hajjah
Abyan
Ibb
Lahj
Hodaidah
Hadramout
Taiz
Aden
Sana'a
Capital Sec
0.00
Zakat Revenue
Zakat & other aid allocated to SWF
Source: MoF, Final Accounts Local Administration, 2011 & CSO Statistics Book 2011 13
Zakat Beneficiaries & Disbursement
 Zakat Law indicates 8 groups of beneficiaries:
 the poor, the needy, the administrators of zakat, those “whose
hearts are to be inclined”, free slaves, the indebted, for “the
cause of God” and for those stranded on a journey.
 Local Administration Law:
 District Local Resources: 50% of Zakat revenues is utilized for
the district's collected from.
 Governorate Common Resources: 50% of Zakat revenues
collected is utilized for the governorate's interest
 SWF:
 Disabled Elderly, Orphans, Women, Unemployed. Cash
assistance: 10-20$ every month sent quarterly through Bank,
Post, or Committees. Social & Economic Aid. Including training.
14
SWF Beneficiaries
No
A
1
2
3
Beneficiaries
Permanent
Completely
disabled
Permanent
partial disable
Definition
Conditions for Eligibility
Social Aid Assistance
Every male or female who is
General Conditions:
permanently and fully disabled - Living under the poverty
rendering him/her
Line
permanently to fulfill any
- Registered with SWF within
work;
relevant category.
Every male or female person
General Conditions:
who is permanently disabled in - Living under the poverty
one or some of his/her organs
Line
and rarely be able to work
- Registered with SWF within
because of his/her case.
relevant category.
Temporary
Every male or female who is
completely or
temporary both fully or
partially disabled partially disabled in one or
some of his/her organs and
cannot fulfill any work or, if at
all, only able to work partly
General Conditions:
- Living under the poverty
Line
- Registered with SWF within
relevant category.
Assistance
Duration
5 years
renewable
3 years
renewable
3 years
renewable
15
SWF Beneficiaries –Cont.
No
A
4
5
Beneficiaries
Orphan
Elderly
Definition
Conditions for Eligibility
Social Aid Assistance
Every male or female
General Conditions:
person under the age of 18, - Living under the poverty
whose parents are dead or
Line
whose parent’s
- Registered with SWF within
whereabouts are unknown.
relevant category.
Specific Conditions:
An orphan who reaches 18
years of age can continue to
receive the aid if he's a
registered student until he
reaches 25 years.
Every person whose age
General Conditions:
reached to sixty years (for - Living under the poverty
male) and fifty-five years
Line
(for females).
- Registered with SWF within
relevant category.
Assistance
Duration
3 years
renewable
3 years
renewable
16
SWF Beneficiaries –Cont.
No Beneficiaries
B
6
7
Women
without
caregiver
Unemployed
Definition
Conditions for Eligibility
Economic Aid Assistance
Each woman who has
General Conditions:
never been married, a
- Living under the poverty Line
widow or divorced
- Registered with SWF within relevant
woman who did not get
category.
married later or whose
Specific Conditions:
caretaker is for whatever Not less than 18 years of age unless she's a
reason absent and does widow, divorced, or has a child or more than
not pay maintenance.
one child.
Every male or female
General Conditions:
person who does not
- Living under the poverty Line
have any work, neither
- Registered with SWF within relevant
as civil servant,
category.
employee or by being
Specific Conditions:
self-employed or whose - Not less than 18 years of age or more than 60
monthly income is below years of age.
the monthly amount of - Labour Market available.
cash economic
- does not receive any social or economic
assistance.
assistance from any organization. Enrolled
students are not considered.
Assistance
Duration
2 years
renewable
2 years
renewable
17
SWF Targeting & Selection of Beneficiaries
 Beneficiary Targeting:
 Policy Level Criteria: Geographical (Urban/Rural) & Poverty
 Application: Pilot Proxy Means Test targeting.
 Selection:
 Application Forms by Case filled by Social Researchers
 Criteria & Marks: The selection criteria covers indicators of
family size, illiteracy level, availability of electricity, type of
home, number of stories in the house, source of cooking gas,
source of water, sanitation service available, and assets owned.
 Poverty Assessment 2006:

45% of beneficiaries are non poor, 14% extremely poor, 13%
poor.
18
% of Zakat Revenues Vs % of Poor People Vs %SWF Aid
70.00
60.00
50.00
40.00
30.00
20.00
10.00
% Zakat Revenue
% of Poor people
Raima
Dhale'a
Amran
Al-Jouf
Mareb
Mahwait
Al-Baidha
Sa'ada
Al-Mahra
Shabwa
Dhamar
Hajjah
Abyan
Ibb
Lahj
Hodaidah
Hadramout
Taiz
Aden
Sana'a
Amanah
0.00
% of SWF Aid
Source: MoF, Final Accounts Local Administration, 2011 & CSO Statistics Book 2011 19
Conclusion & Implications:
 Zakat is an important Social Safety Net but will benefit from




institutional reforms, its potential role to alleviate poverty is still
modest.
Strengthening coordination between Zakat stakeholders is
important.
Zakat current legislations are incomplete. Calculations and Zakat
categorization within type are not clear. Eg. It’s not clear whether
Zakat has been collected from Petroleum and Oil sector.
SWF assistance are nominal and do not contribute to acquire
assets that may help beneficiaries to overcome poverty level.
SWF still suffers from leakage to the non-poor. GeographicalPoverty targeting is still not implemented effectively.
The End
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Thank You for Listening !
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