Islamic Social Finance and Global Inequalities: The Case of COVID-19

Abstract

Islamic social finance plays a key role in reducing inequalities among and within nations. It adheres to the Islamic principles of equity, justice, and freedom, therefore, providing the tools for alleviating poverty, reducing socio-economic inequalities, and sharing prosperity. Instruments such as zakat, waqf, and voluntary donations empower the society to create new opportunities and build capacity for development. The COVID-19 pandemic has widened income and wealth inequalities among and within nations. This paper analyses the global income and wealth inequalities and examines the contribution of Islamic social finance in reducing inequalities and supporting future sustainability. Islamic social finance promotes inclusion by offering equal opportunity to participate in the economy and contribute to development. The paper uses Lorenz Curve to highlight the existing income and wealth gaps both globally and within nations.