Iran and COVID-19 An alternative crisis management system based on bottom-up Islamic social finance and faith-based civic engagement

Najmoddin Yazdi, Ali Marvi, and AU Maleki

4.1 Introduction

The new coronavirus first emerged in late 2019 and has so far continued to hit the world. Countries, including Islamic ones, had different responses in terms of crisis management, civic engagement, societal support, social finance, etc. Iran has been a unique case since it was one of the first countries that confronted the virus, experienced two peaks, was blamed by the Western media for incapable management and least compulsory policies, for example, on home quarantine, and most importantly has been under an historically unprecedented level of economic and medical US-led sanctions. Furthermore, Tran’s right to benefit from the [International Monetary] Fund’s $50-billion Rapid Financing Instrument (RFI)’ has been blocked by the United States (Mehr News Agency, 2020b; para. 1). Also, Iran has fewer physicians, hospital beds, and nurses per capita than advanced economies. For example, the number of nurses per capita of the United States, the United Kingdom, France, Spain, and Italy is about three to seven times that of Iran. They also have roughly double the physicians and up to more than five times the hospital beds of Iran (World Bank Group, 2018). The interesting point is that Iran has one of the best-performing national health systems in the region and even the world for decades, paradoxically, despite such low resources per capita. Besides combating the virus itself, Iran should have combatted the disappointing discourse propagated by the Western media’s propaganda, particularly Persian-language ones (BBC World Service, 2020). Last but not least, the occurrence of the pandemic with the New Persian Year’s holidays, which every year witnesses the highest peaks of travel, family gatherings, and shopping, and some regional floods worsened the situation even more.

Iran displayed successful management of the pandemic, at least in some respects, and in some phases, compared with some well-developed countries. Table 4.1 summarizes some key statistics of the current state of selected countries on the COVID-19 pandemic. It is evident from the table that in spite of sanctions and the difficulties in obtaining Personal Protective Equipment (PPE) kits, Iran’s overall performance is acceptable. Iran’s death per capita is the smallest, and the ratio of recovered to total cases is fairly high.

Therefore, the question should be, how has Iran’s health system demonstrated a far better response in some respects than the United States, France, Italy, Spain, and the United Kingdom? This chapter sheds light on this question from the viewpoint of Islamic social finance, and also the broader picture of Islamic management of crises.

The chapter is organized in the following order: first, in Section 4.2, both governmental and civic management of the crisis are briefed, followed by the indispensable role of Islamic leadership in Section 4.3. Section 4.4 focuses on various Islamic social finance instruments that have been deployed by Iran during the COVID-19 pandemic, in which some novel approaches are presented. Section 4.5 argues that non-financial civic engagement is a necessity alongside Islamic social finance at the time of such large-scale crises when insufficient professional human resources are available. Section 4.6 discusses the examples illustrated in the two previous sections and conceptualizes them in an alternative crisis management model that is more bottom-up (i.e., based on a mobilized community), citizen-centred, and collaborative. Before concluding the chapter, the contribution to the Islamic social finance literature is discussed in Section 4.6 under the alternative crisis management system.

4.2 Governance structure

The Supreme National Security Council of Iran ordered the establishment of the ‘National Headquarters of Administrating COVID-19’ on 23 February 2020, which was approved by the Supreme Leader. In the first place, the President of the Islamic Republic of Iran, Hassan Rouhani, set the health minister as the chairman of the National Headquarter of Administrating CO VID-19 (Hamshahri Online, 2020; IRIB TV2 Primetime News Slot, 2020). However, on 10 March, the president himself became the chairman by the Supreme Leader’s new decree, which was a reply to the request of the parliament’s chairman in making the headquarters more efficient (ISNA, 2020). The headquarters consists of several committees, including education, public relations, disciplinary-societal, scientific committees, and a spokesperson (PANA News, n.d.).

Later, two other high-level bodies were established. One was the Health Centre to Fight Corona, which was established by the Supreme Leader’s order to General Staff of the Armed Forces of Iran. The other was a supporting mechanism for the decrees of the headquarters, called the Support Council for the Decisions of National Headquarters of Administrating COVID-19 (Tasnim News Agency, 2020a).

A positive point in this governance structure is that medical professionals head it. This was historically rooted in Iran’s health system structure, and complemented by the structure for the national headquarters. The head of the medical university of every province, a medical doctor, is the health governor of that province and the health minister’s representative. This makes medicine and health systems integrated, and scientific and practical efforts aligned. Such a system was able to help the national headquarters attain a scientific and medical orientation rather than being overly political, security-focused, or bureaucratic. The negative point was that the crisis management process in the first peak was somehow ad-hoc in that it did not pay enough attention to economic concerns and businesses.

Another point is that the armed forces (the Health Centre to Fight Corona) were able to mobilize their resources early and quickly. They dedicated 7,000 hospital beds and 32 hospitals to civil patients, disinfected cities and villages in several phases, and set up over 200 health monitoring stations at provinces’ entry and exit (AJA Info Portal, 2020). The showcase was a 2,000-bed hospital set up within 48 hours in the capital (Vahdat & Krauss, 2020).

As this chapter contends, having a bottom-up crisis management system means that these formal structures are at best aiding community mobilization and citizen-centred collaboration. As conceptualized by Ghiabi (2020; para. 7),‘while the inter-institutional confrontation [of Iran] escalated into mutual criticism and parallel policy interventions, the public response was driven by a diffused and granular mobilisation’. He then continues that ‘this strategy ... [of] managing disorder rather than disposing order - enables the Iranian state to diffuse the task of governing turbulent phenomena, such as the pandemic’ (Ghiabi, 2020; para. 10).

4.3 Leadership

A great feat was accomplished and a glorious jihad was carried out in the country. It was a jihadi endeavor and a jihadi movement in the true sense of the word. This should be recorded in history’. ... In particular, I ask Him to raise the position of those who were martyred on the path of this Jihadi movement.

(, 2020; para. 3-4)

This was a recent example of the metaphors continuously in use by' the Supreme Leader of Iran, Ayatollah Ali Khamenei. Iran’s leadership used to depict the nation’s confrontation with the new coronavirus as Jihad, holy defence, and martyrdom. With such a discourse, holy' defence (eight-year war imposed on Iran by Iraq) has been used for the fight against the pandemic. In this view, medical staff are at the front line of the Jihad (holy' defence), and all citizens are asked to help them at the back end. There has been no trade-off between lives and the economy' in the communicated picture, but saving any' single life is an Islamic value and a must. In this discourse, there has been no controversy' between religion and science, but complementing roles. Deceased medical staff have been called ‘martyrs of health’, resembling the concepts of ‘marty'rs of Haram' and ‘martyrs of Harim', which are well-socialized concepts in the Islamic society' of Iran.

Formulating the whole confrontation as Jihad and the holy' defence is significant in mobilizing distributed non-governmental and civic resources in a task-oriented religious society. This brought society' together against the enemy, i.e., the pandemic, with high social calm and negligible riots or strikes compared with Western nations like the US. By leading such community' mobilization,

Iran witnessed the emergence of a bottom-up citizen-centred crisis management system as depicted elsewhere in this chapter. It can be argued that this capacity is not merely national, but religious and international, which gets activated in crises. For example, during the 2019 flood in Golestan province, Abu Mahdi started a widespread campaign in Iraq to assist the Iranian flood victims and his close Iranian friend General Soleimani (Shariati, 2020). Such discourse and formulation of crises make them unifying situations rather than violent ones.

At the same time, the discourse was also focused on Islamic finance, including Islamic social finance. The Supreme Leader repeatedly urged all believers to help assist families in need during the pandemic, via Islamic finance, particularly Qard Hasan, Khums, Zakat, and Mouwasat, Iftar food in Ramadan, Qurbani (meat of the sacrifices), distributing votive food QNazr) to the low-income families in the upcoming Muharram, while observing all necessary health protocols (Hawzah News, 2020d; Majlis-e-Ulama-e-Hind, 2020; Mehr News Agency, 2020c).

Interestingly, the Supreme Leader and many religious figures unceasingly asked people - before the government - to adhere to health instructions while insisting on seeing faith and religion as the most helpful components of this fight. This implicitly signalled religion along with policy and science, instead of communicating a confrontation of religion and science (policy). For example, Supreme Leader Ayatollah Ali Khamenei, on 15 March, talked about the coherence of religious, humanitarian, and Jihadi motives while thanking the officials and the health community (IRNA English, 2020). Another example comes from Ayatollah Abdollah Javadi Amoli, a high-ranking religious figure, who acknowledged the medical community on 21 March while advising them and society to pray for all those affected by this virus, and the medical community on the front lines (Javadi Amoli, 2020). In another instance, Ayatollah Mohsen Gharaati also called on the people of Iran to turn this threat into an opportunity by observing medical precautions, getting closer to God, and capitalizing on quality family time during the unprecedented quarantine at home (Gheraati, 2020).

In sum, the Islamic leadership of Iranian society built on Islamic discourses of Jihad, martyrdom, and holy defence activated the capacities of community mobilization and achieved societal cohesion, with special and detailed attention to Islamic finance instruments like Qard Hasan, Zakat, Khums, Sadaqat, and Mouwasat. Other religious leaders of society, from top to bottom levels, echoed this discourse. And, such a religious picture was communicated under a complementary paradigm of science (health observations).

4.4 Islamic social finance

This section illustrates some Islamic social finance measures adopted by Iranian society during the COVID-19 pandemic. These measures include Qard Hasan financing of those in need via family networks, Qard Hasan financing of the neighbourhood via mosques, dedicating Khums funds to victims, setting up campaigns such as rent campaigns or Nafas campaign, either in the private sector or in terms of public-private partnerships (PPPs), those of charities, and NGOs, and financial support by the government.

4.4.1 Family networks

Qard Hasan (also written as Qard al-Hassan) is "commonly defined as an interest-free loan’ or more diversely as ‘a benevolent economic behaviour, an outlet for the placement of savings, an instrument of finance [or] an institution for bona fide lending’ (Sadr, 2014; p. 7). A hadith of the Prophet Muhammad says that Qard Hasan has more rewards than Infaq (18 rewards compared to ten rewards), which indicates the importance of providing finance to those with actual needs (HaditbLib, n.d.). Qard Hasan was also shown to play a role in enhancing social inclusion and financial self-sustainability (Iqbal & Shafiq, 2015; Khan et al., 2017).

Qard Hasan has, in the recent decade, been revitalized in Iran by establishing two specialized banks, i.e., Mehr Iran Qarz Al-Hasaneh Bank and Resalat Qard al-Hassan Bank, and 49 Qard Hasan funds with official permission from the Central Bank of Iran (IQNA News Agency, 2017). Of course, the number of unofficial funds is much higher such that it is approximated that Southern Khorasan, a less populated province of Iran out of 31 provinces, has about 400 Qard Hasan funds (Young Journalists Club, 2020). Notably, social financing used to play a role in these banks and funds, e.g. in Resalat Qard'al-Hassan Bank.

During the COVID-19 pandemic, Iran has witnessed a particular utilization of family-network Qard Hasan financing. Such utilization was built on a decade of a resurgence of informal funds among family networks. Some attributed this resurgence to the fact that bank loans are increasingly hard to access, have high interest rates, and ask for guarantees that are difficult to provide, at least by ordinary families (Poolnews, 2013). In family-network Qard Hasan, members are often committed to having a fixed payment per month. Such Qard Hasan loans are essentially the sum of these continuous member payments and free of interest or any extra fees. These loans are given to members in times of need or in turns, or a combination of both. Trust among the members and much less information asymmetry as regards genuine need and payment abilities are two of its pillars, which in turn yield flexibility' in payments and instalments, social bonding, and financial resilience. However, some pitfalls have been observed for family-net-work Qard Hasan in Iran, which requires further analysis ( Young Journalists Club, 2019).

Observation of Iran’s handling of the COVID-19 pandemic suggests that this Islamic finance instrument could provide a degree of economic resilience when the government is not in an economic situation to support families and family businesses. The government’s financial support was ready on 18 March 2020, one month after families were hit by the pandemic (Tasnitn, 2020). The financial support was naturally insufficient due to Iran’s adverse economic conditions and lack of transparent economic information about the extent to which the pandemic hit every family. In such conditions where there is a lack of reliable and timely information and an insufficient governmental capacity, Qard Hasan family networks can help achieve better targeting of needs.

4.4.2 Mosques

Mosques (Masjed) were another pipeline for the circulation of Qard Hasan funds during the coronavirus pandemic in Iran. Like family networks, mosques utilized Qard Hasan funds, which were voluntarily and directly collected from local residents. Again, similar to family networks, mosques have useful bottom-level information on who needs what and to what extent. But, different from a network of families which is based on blood, a mosque spans a local neighbourhood. And more importantly, this approach does not see mosques as mere receivers of societal funds, but it tries to revive the use of religious places and the role of mosques in Islamic societies (Zada & Saba, 2013). It is worthwhile mentioning that the government has recently felt these benefits of bottom-up Islamic social finance through mosques and started allocating a complementary USDS200 million budget for the Qard Hasan funds in mosques, for the first time in 2019. The government intends to increase it year by year (IRNA, 2020). In sum, Qard Hasan funding through mosques and family networks can be pictured as a system capable of carrying microfinance with more flexibility, less information asymmetry, stronger social bonds, and more trust-building in comparison with centralized governmental financing schemes.

Mosques were able to mobilize prayers, volunteers, and youths to altruistically give to people in need and were active in converting to ad-hoc factories of mask production, sewing protective gowns and gloves, and supplying food and serving beverages to both hospitals and neighbourhood residents etc. (Barron’s, 2020; MSN News, 2020). This non-financial civic engagement built around mosques is discussed in Section 4.5.

4.4.3 Charities and NGOs

In the first two months of the pandemic outbreak, Iranian benefactors and charities donated USDS83 million to provide COVID-19 relief. Out of this, about USDS 10 million was provided by non-governmental organizations (NGOs) and charities, and USDS6 million by public volunteer groups (Tehran Times, 2020b). Financial resources were used for direct payment to vulnerable families as well as distribution of disinfectants, masks, food, protective clothing, and drugs to them. The authors could not see any distinguishing feature in the role of charities in fighting the pandemic in Iran.

4.4.4 Khurns by clerics

Several Iranian religious leaders devoted half or one-third of the Sahm Imam (a part of Khums) donations in their hands to the battle against CO VID-19 due to the inability of the government to provide relief to all those in need (Baligh News, 2020; Ijtihad Net, 2020; Tabnak, 2020). Khums refers to ‘one fifth of [surplus annual] income payable for the purpose of redeeming the rights of others’ (Iqbal & Mirakhor, 2011). This dedication of Sahm Imam to those in need in times of crisis is, in fact, an Islamic social finance instrument complementary to the government’s financial support packages. This instrument was utilized before for natural disasters in Iran like floods, including the flood in Sistan and Baluchistan province that happened at the same time as the pandemic, and earthquakes (Hamshahri Online, 2019; Hawzah News, 2020a; Mehr News Agency, 2017).

4.4.5 Rent campaigns

The country witnessed a plethora of campaigns during the pandemic, thanks to the digital age. Some of these campaigns were focused on altruistic giving to help families survive the new coronavirus. An interesting one was a nationwide campaign for shop owners not to collect rent from businesses hit by the pandemic for several months (Financial Tribune, 2020). As a more top-down approach, the Mosques Affairs Centre for Southern Khorasan, on behalf of the mosques of the province, forgave the whole or part of the rent of commercial buildings in the ownership of the mosques for some months (Hawzah News, 2020c).

Although Iran’s government issued several rent policies for the first months of the pandemic, the policies did not target rent forgiveness. Specifically, the government defined a cap on the increase in rent since the country experienced considerable economic inflation due to both the US-led economic sanctions and the pandemic, thus increasing real estate prices, mortgages, and rents. In addition, a decree was issued for the postponement of rent for up to three months obligating renters to extend their contracts by another year (Iran’s Ministry of Cooperatives, Labour and Social Welfare, 2020). Thus, all these supports were in the form of regulations and facilitation rather than financial support or forgiving rent. Therefore, unlike affluent countries like Germany that provided detailed and generous support plans early enough for renters, such rent campaigns could be significant in crises where countries like Iran cannot afford financing rental agreements.

4.4.6 Government’s financial supports

The pandemic coincided with the Persian New Year, which not only limited celebrations and made self-quarantine policy difficult to achieve but also negatively affected family businesses. Anyone familiar with this holiday knows that most businesses wait all year for this moment due to high profits in sales. As a result, Iran’s government decided to adopt various measures to help businesses and unemployment with tax levies, loans, interest discounts, and unemployment insurance, to name a few. These measures are comparable with the US in terms of scope, but not the payments (Malek Mohammadi & Solouki, 2020).

4.4.7 Private sector campaigns

Campaign Nafas (meaning breathe) is the nationwide corporate social responsibility (CSR) campaign set up in the early days of the pandemic. It was the first of its kind in Iran to gather the capacities and resources of the private sector and economic actors at a national scale, with the support of the commerce chambers. This campaign was able to collect about USD$40 million to support over 270 hospitals with everything from protective garments to technological equipment. While the country had seen various private sector campaigns in previous crises, Campaign Nafas was novel in terms of networking, collective action, resource aggregation, and agility (Sustainable Development School (of Iran), 2020).

This section showed how bottom-up Islamic social finance could provide an agile and quick-response societal crisis management system, especially when the central government is unable to provide sufficient, targeted, or timely financial supports to citizens. The next section presents a complementary pillar to this alternative understanding of crisis management, i.e., the necessity of non-finan-cial civic engagement.

4.5 Non-financial civic engagement

The Islamic social finance activities mentioned have been complemented by non-financial civic engagement of society. Thanks to Basij’s societal infrastructure, the whole country witnessed the quick mobilization of over half a million volunteers under 66,000 Jihadi groups (Tasnim News Agency, 2020e). In the following, some of these activities are presented. The importance of this non-financial participation goes back to the fact that in crises, official staff, facilities, and infrastructure cannot respond to society’s escalated needs, for example, in terms of caregiving, case finding, health services, production and distribution, and organization and management.

4.5.1 Involvement of the society in production chains

Soon after the shortage of face masks, hand sanitizer, and disinfectants, the country saw two streams: one mobilizing ordinär}' citizens and households and the other mobilizing firms. The first stream was the mobilization of ordinary citizens, mostly housewives, to sew face masks and protective gowns at workshops and home for both the medical community and ordinary citizens (UNDP, 2020; Relief Web, 2020). Mosques were also converted into mask factories overnight (France 24, 2020). Refugees working in Iran also played a role in this regard. Some joined the movements mentioned above. Some teamed up with Iranian entrepreneurs, for example, switching from making high-fashion suits to producing hospital gowns and masks amid the pandemic (UNHCR Iran, 2020). This was what citizens could donate back to society, even if they could not finance these activities.

The second stream was technological innovation and localization (for the first time) of products that businesses need. For example, an Iranian technology-based firm designed and manufactured an industrial machine producing N95 face masks. This happened for the first time in the country, during the pandemic, in just ten days and nights of hard scientific work. The quality and extra features of the masks soon made it an export item to Europe and more. The Corotech2020 Exhibition was held on 13 June 2020 to host 50 knowledge-based Iranian firms that, for the first time, developed a technological product for the battle against the COVID-19 virus. These products were diverse, ranging from medical equipment and diagnostic kits to high-tech raw materials for mask production to personal protective products and disinfectants (consumables and equipment) (Iran National Innovation Fund, 2020).

Both of these streams, i.e., ordinary citizens and knowledge-based businesses, depicted involvement of the local society in the production chains of equipment and commodities urgently needed during the pandemic. Nevertheless, the governmental and para-governmental bodies were active, at least in complementing these movements. For example, the Headquarters for Execution of Imam Khomeini’s Order inaugurated the opening of Asia’s largest factor}' producing face masks in Iran with a production rate of 4 million face masks per month. This was claimed to obviate the country’s need for importing medical products (Tasnim News Agency, 2020d).

4.5.2 Societal support of hospitals

Iranian society has supported the medical staff and patients combating COVID-19 by various means. For example, communities started serving 500 juice bottles per day in Tehran to the hospitals’ nurses and doctors and also the patients. This reached over 4,000 bottles per day in Tehran and 2,800 bottles per day in Mashhad, just to name two of the cities, which covered over 80% of the COVID-19 hospitals there. Tons of oranges, carrots, and apples were donated daily, and all the contributors throughout the chain were volunteers (Hawzah News, 2020b; High Council for Human rights (of Iran), 2020; SNN, 2020). Serving over 2,000 warm meals for hospitals was another activity by the mobilized society (Tasnim News Agency, 2020b).

Within the first month of the outbreak, some 300,000 face masks were distributed to hospitals with the help and donations of benefactors, charitable organizations, congregations, and individual volunteers. Donating over 15,000 scrubs, 157,000 food packages, and 200,000 snacks to hospitals during the first month of the pandemic was another dimension of the community mobilization (Tehran Times, 2020a).

Furthermore, some volunteers voluntarily participated in hospital activities as ‘ Jihadi accompaniment to patients and cleaning staff. In the city of Qom, 1,000 members of the clergy registered within the first two weeks, with 150 volunteers in the waiting list. Every Jihadi volunteer helped about 15 patients, including giving them food and water, helping them go to the bathroom, and whatever non-medical services were needed (Mashregh News, 2020). Graduates of psychology and Islamic studies participated in setting up field hospitals, helping with fever-monitoring teams at city entrances, and provided spiritual care to patients. Telephone calls following-up suspicious cases was another kind of activity that volunteer citizens helped with (Mashregh News, 2020). This bottom-up support of hospitals and patients was broadly distributed throughout mosques, local Basij stations in each neighbourhood, and Jihadi groups (High Council for Human rights (of Iran), 2020).

4.5.3 Societal support of mortuaries

Disposal of infected dead bodies is not the only concern an Islamic society may have during a pandemic. Islamic burial preparation and bathing of the corpse is also of great concern to Islamic societies. While mortuaries were first permitted to act upon World Health Organization (WHO) protocols, including not bathing the dead, it was changed back to Islamic bathing and burial preparation, although maintaining other health, disinfection, and burial protocols were suggested by the WHO. Islamic burial preparation and bathing of dead Muslims is a collective duty (fard al-kifaya) that is imposed on the whole community of believers ( Ummah} (Al-Dawoody & Finegan, 2020).

Here, again clergymen and clergywomen hurried to help mortuary staff throughout the country. For example, in Tehran, 130 volunteer clergies did most of the bathing and burial preparation of infected corpses (Javan Online, 2020; Tasnim News Agency, 2020c). Sixteen-year-old Zahra Keykha is the youngest volunteer Jihadi girl to help with the preparation of bodies infected with COVID-19 in Zahedan, a provincial centre 1,500 kilometres from the capital. Other Jihadi women asked her if she was afraid, and she said that she came there voluntarily, with the gentle suggestion of her father (Alef, 2020).

4.5.4 No panic buying

Iranian society created a proud image of the country with a lack of panic buying (Mehr News Agency, 2020a). Although Iran did experience a shortage of face masks and hand sanitizer, that experience was notably compared with America and Europe, which are connected to global supply chains and are not under sanctions and trade restrictions (for example, see NST Online, 2020; Rayner, 2020). Although part of it comes back to the government’s ability to maintain a good supply of commodities during the pandemic, i.e., no large queues for food, washing liquids, toilet roll, disinfectants, hand sanitizer, and face masks, the role of the citizens in this regard cannot be highlighted enough.

4.6 Discussion: alternative crisis management system

Islamic social finance lies at the intersection of Islamic finance and social finance, which have similar ethical dictates and the shared goal of creating value for society via innovative financial instruments (Biancone & Radwan, 2019). The potential and drawbacks of Islamic social finance have not yet been studied regarding crises where the whole of society is engaged. The CO VID-19 pandemic is a great opportunity to better understand its potential, especially in Islamic societies.

The Iranian people showed the application of a diverse array of Islamic social finance instruments in this pandemic. Some of them have been highlighted before in the literature, including the role of charities and NGOs, and dedicating Zakat, Khums, Qard Hasan, and Sadaqat to the victims of natural disasters. However, Iran’s case illustrated several untapped Islamic social finance capacities which were brought to the surface during the pandemic (Section 4.4). They included ( 1 ) the circulation of Qard Hasan microfinance through Iranian family networks; (2) converting mosques to a Qard Hasan system through which volunteer citizens funded, often in the neighbourhood of that mosque, and those in need were locally identified to give financial assistance to; (3) campaigns for rent forgiveness of shops, houses, and other commercial buildings; and (4) the first nationwide private sector campaign of Iran was set up in this pandemic to support hospitals by both societal financing and non-financial supplies.

These above-mentioned socio-financial instruments would have been unable to efficiently fight the coronavirus if not accompanied by the volunteer non-financial engagement of the people. In crisis times, when the need to deploy volunteer human resources peaks, financing alone cannot get the work done. Section 4.5 showed examples of non-financial civic engagement of Iranians during the COVID-19 pandemic. They included (1) volunteer participation in the production chain of masks and other medical equipment, and converting mosques and homes into factories for sewing masks and protective clothes, cooking and serving food and beverages to medical staff, those in the neighbourhood and the elderly who could not go out to do the shopping, besides microfinancing those in need through the resources donated by the people who gather at the mosque to pray and by other local residents; (2) societal support of hospitals and other medical centres by volunteers with food, entertainment, beverages, campaigns, etc.; (3) societal protection of mortuaries and Islamic burial preparation with the aid of volunteer clergy; and (4) no panic buying of citizens, just to name a few.

Although the structure of the present chapter may imply a dichotomy between the financial and non-financial civic engagement of society, the case illustrated much synergy between them. The financial and non-financial civic engagements were underpinned by a societal infrastructure that has been developed over the decades. The institutional structures for financial and non-financial civic engagements, i.e., mainly mosques and charity NGOs, are shared. At a deeper cultural level, both share common social drivers. For example, fundraising charities, which generally mobilize financial civic engagement during crises, were further supported by volunteership of citizens. When supplying food, masks, ventilators, protective gowns, and gloves, actors get valuable information on what is needed or what is in a surplus for a particular hospital, neighborhood, or home factor}'. In turn, they ask for specific non-financial contribution of volunteer citizens who do not have money to give but can donate their skills, time, or commodities.

These examples can contribute to the conceptualization of an alternative crisis management system, which is based on the faith-driven engagement of citizens

  • (Saja et al., 2018), that is citizen-centred and collaborative governance (Cooper et al., 2006), and altruistic and Islamic financial giving. Such bottom-up crisis management systems, based on community mobilization, could be contrasted with regular systems in the following terms:
    • 1. Bottom-up Islamic social finance benefits from intrinsic motivations during crises and pandemics, while the motivation in conventional top-down crisis management systems is often extrinsic. Financing in regular crisis management systems often goes in the form of the redistribution of centrally collected taxes.
    • 2. Recipients of money or other kinds of help feel it as beneficence, while in regular systems this turns into a feeling of having rights against the government or the crisis management system. In such bottom-up systems, the community is an indispensable part of the management system. So, the positive feelings of belonging to the system, along with less information asymmetry at local levels, turns into stronger social bonds.
    • 3. Although parallel work and lack of data are two major drawbacks of such bottom-up systems, as in Iran’s case, preliminary observations suggest that such a capillary distribution network can compensate for these drawbacks. This was observable when government bodies tried to distribute blankets and tents to flood victims compared with civic engagement in the collection and distribution of these items.
    • 4. An evident benefit of the alternative crisis management system is its nearly zero administrative costs. Such systems’ administrative costs remain at zero, while conventional crisis management systems’ administrative costs increase.
    • 5. An attractive characteristic of bottom-up crisis management could be its fast response. The Iran case showed that governments need much time to discuss policy options, decide on and develop executive details, and operationalize them. This does not fit with a crisis and pandemic situations where timely response matters.
    • 6. Learning in the alternative system will be more place-based, distributed, and with shorter feedback loops than the conventional top-down approaches.

The above conceptualization of Iran’s crisis management system during the pandemic, along with the role envisaged for bottom-up Islamic social finance, can complement the future agenda suggested by Biancone and Radwan (2019) on Islamic social finance. They argue that sharia compliance is usually done through negative screening methodology, in which investment prohibitions by Islam are probed. They conceptualize a more positive approach towards Islamic social finance by giving investors an ‘opportunity to affirm their belief in their investments and pro-actively direct investment to the sectors they choose to invest in. The bottom-up Islamic social finance model suggested in the present chapter can further this issue to the point where micro-investors are micro-managers of the crisis via community' mobilization and have less information asymmetry', faster responses, fewer administrative costs, and more exact targeting of those in need.

This can particularly help societies that have incapable, less-resourceful, or corrupt governments. A significant indirect impact of such citizen-centred collaborative management of crises is ‘social bonding’, or maybe ‘Okhovat' in Islamic terms. Finally, the significant role of social leadership (sometimes the same as religious leadership and political leadership) and trust cannot be overestimated.

4.7 Conclusion

Iran’s response to the COVID-19 pandemic in some respects represents a unique case. The country’s beleaguered economy - under severe US-led economic and medical sanctions - continues to combat the coronavirus under a new paradigm of crisis management. In this paradigm, the crisis management system is bottom-up and built on community mobilization, rather than conventional top-down crisis management systems. In this regard, Iran’s response was built on Islamic concepts of Jihad, defence, and martyrdom, used Islamic institutions like Masjed (mosque) and Arbaeen Mokeb tents, and Islamic finance concepts of Infaq, Qard Hasan, and Khums. This is evident in the societal discourses, governmental discourse, and speeches of the Supreme Leader.

The current chapter’s results are threefold. The first result is that a bottom-up crisis management model, like what Iran experienced, can benefit from its innermost incentivization, beneficence, and the resulting social bond {Okhovat), nearly-zero administrative costs, more targeted reach to those in need , fast response, and shorter learning loops of this crisis management system compared with a conventional top-down approach.

The second result indicates a significant role for Islamic leadership and discourse. From the first instance, the Supreme Leader of Iran started picturing the crisis as a Jihad and holy defence, in which medical staff are at the front line, and all citizens are helping them. There has been no trade-off between lives and the economy in the communicated picture, but saving any single life is an Islamic value and a must. In this discourse, there has been no controversy between religion and science, but complementing roles. The medical staff and others who help them on the front line or behind the scenes are all called ‘health defenders’. Deceased medical staff are called ‘martyrs of health’, resembling the concepts of ‘martyrs of Haram' and ‘martyrs of Harim', which are socialized concepts in Iran.

Third, a new Islamic social finance model was practised that has been more bottom-up, citizen-centred, and collaborative. While Biancone and Radwan (2019) have called for a more positive and innovative approach to Islamic social finance instead of a mere negative screening methodology, in which investment prohibitions are investigated in Islamic Sharia, Iran’s case illustrated that concepts of Infaq, Sadaqat, Khums, and Qard Hasan could be deployed in a more distributed, bottom-up, and collaborative manner. For example, mosques and family networks were able to act as a system circulating Qard Hasan funds throughout society at the bottom, where conventional governance systems as practices before could not reliably reach those in need.

From a data viewpoint, it should be clarified that the examples provided in this chapter should be approached as ad-hoc early evidence for an illustration purpose, but not stylized facts or empirical data in its strict sense.


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