It’s now the start of Shawal, the 10th month in the Islamic calendar, officially marking the end of Ramadan. From this vantage point, it is interesting to observe how the labour markets in the Islamic World have managed economical output during the 30 days of fasting.
The holy month seems to have developed a reputation for reduced working hours and productivity. According to Ahmed Bin Khalaf Al Mazroui, vice chairman of the United Arab Emirates Contractors’ Association, “the fact is that productivity of fasting Muslims during Ramadan slows down” whilst Radio Netherlands Worldwide states that “productivity in the Muslim world drops and the civil service comes to a virtual standstill.”
If we take an in-depth look at the productivity of predominantly Muslim countries, we see a pattern supporting this reputation. According to economic analysts including economist Hussam Ayesh, productivity drops by about 50 per cent in both the public and private sectors during Ramadan. Interviews conducted by the Kuwait News Agency (KUNA) of employees in Dubai uncovered quotes that productivity dropped by at least 20 per cent and sometimes even twice this ratio.
In Morocco, production in almost all businesses (manufacturing, agriculture and services) dropped during Ramadan. Whilst in Jordan, where working hours were reduced from seven to five hours a day in 2008, financial analysts at the Jordan Times estimated costs to range in the millions of dinars for the Kingdom. Numbers for the mining and manufacturing indices of various Muslim countries have led analysts to believe that Muslim countries lose significant amounts of money, stalling economic progress during Ramadan. Figures compiled by the United Nations Statistics Division which show a general economic drop during the months of August and September in 2009, when Ramadan took place, in Muslim countries including Indonesia, Pakistan and Turkey.
Yet despite the significant evidence that Ramadan is marred with wastage, Muslim markets, surprisingly, tend to show gains during this month year after year.
According to a new international study investigating the correlation between Ramadan and stock markets, the average returns in Muslim countries were almost nine times higher than other months of the lunar calendar. The study, undertaken by professors at the University of Leicester and the University of New Hampshire, looked at markets in fourteen Muslim countries (Bahrain, Egypt, Indonesia, Jordan, Kuwait, Malaysia, Morocco, Oman, Pakistan, Qatar, Saudi Arabia, Tunisia, Turkey and United Arab Emirates) between 1989 and 2007 and showed average gains of 38.09 per cent during Ramadan compared to 4.32 per cent in the rest of the year.
The reason which may be influencing the sentiment of the public, according to Dr. Tomasz Piotr Wisniewski of the the University of Leicester, is “the heightened sense of social integration and possible salubrious effects of the changed dietary regimen.” In other words, the healthy lifestyle and sense of community promoted in the Muslim world during Ramadan has helped improve its markets in times when it should have been facing desolate economic conditions. The study also shows increased spending during the month of Ramadan – both on gifts – and giving. It is here that the perennial principle of Zakat plays a significant economic role.
Zakat is the systematic mandatory contribution of at least 2.5 percent, or one-fortieth, of one’s wealth each year to benefit others in need. All Muslims practice zakat and there are even a few countries that have institutionalised it (Libya, Malaysia, Pakistan, Saudi Arabia, Sudan and Yemen). Other countries have instituted a voluntary system (Egypt, Indonesia, Iran, Lebanon and United Arab Emirates).
The zakat statistics that are available correlate to a strong impact on Muslim country markets. In Kuwait, which only has a population of 2.5 million, the Kuwaiti Zakat House registered financial aid totalling 165 million KWD ($575 million) since its founding. In Pakistan, the Ministry of Zakat and Ushr was allocated 13.7 billion PKR ($160 million) in 2006-2008 and 7.9 billion PKR ($92 million) in 2009-2010 alone whilst in United Arab Emirates, the non-institutionalised Zakat Fund’s total income reached about 44 million Dirham ($12 million) with an additional 11 million Dirham ($3 million) expected by the end of 2010. In Saudi Arabia, zakat makes up the majority of the Kingdom’s public revenues in the non-oil sector, accounting for $18 billion in 2007.
During natural disasters, donations globally are comparatively smaller to the consistent generosity of the Muslim world during Ramadan – and even year round – in the form of zakat. During the 2004 Indian Ocean tsunami, countries like the United Arab Emirates gave $20 million whilst during the 2005 Kashmir earthquake, Saudi Arabia donated $133 million. The 2010 Haitian earthquake, received $1.7 million from Indonesia, and the 2010 Pakistan floods, received $1 billion from the Organisation of Islamic Conference, a 57-member institution.
The economic aspect of Ramadan is intertwined with charity. Reduced productivity in this month may be a predictable fact for many predominantly Muslim countries but their markets surprisingly rise, highlighting charity as a significant factor in global economy.
(Photo: Mohammad Shazni)
Muddassar Ahmed is CEO of Unitas Communications, a London-based public affairs consultancy that monitors developments in Muslim regions and advises leading Muslim organisations on PR strategies.