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Zakat as an Effective Instrument for Alleviating Poverty

Question:

Discuss about the Role of Zakat in Alleviation of Poverty.

The Zakat or instinctive almsgiving as the measure through which Islam attempts to address poverty. The theory of Zakat might appear strange to any person who is not acquainted with the region of Islam. Nevertheless, it is a noteworthy concept of theory that attempts to address the issues of global poverty (Yaacob et al. 2013). The Islamic world particularly those nations having high populations of Muslim has attempted through Zakat to address several issues related to poverty.

Considering Zakat as an instrument for the state it can be extremely effective in alleviating poverty since it will legitimize institutions that in the private provinces are not “passing through the appropriate channels, are not recorded, without any kind of planning and not the part of any strategy” and it would be difficult to evaluate the effectiveness of the Zakat. An argument can be bought forward by stating that when Zakat is implemented appropriately in case of the poverty related institutions, which can be an effective manner of alleviating poverty problems (Muhammad and Saad 2016).

The system of Zakat provides huge amount of benefit. apart from the purification of heart and soul Zakat not only purifies the wealth but also acts as the major tool of distribution of wealth and reduces poverty. As prescribed under the Islam affluent individual is provided with the legal share of wealth especially for the poor section of the society as the Zakat. Hence, wealth starts flowing from rich people to the poor people (Clarke and Tittensor 2016). Therefore, Zakat plays an important role in the allocation of wealth and as a result helps in alleviation of poverty. Paying of Zakat helps in narrowing the gulf between the rich and the poor, the standard of living of the underprivileged individuals starts to improve. As an outcome, the friction between the two classes of people is eliminated and their relations turns out to be harmonious.

Alleviation of poverty possess paramount importance in the fiscal and the development policies of Islam. Zakat makes the use of the institutional approach under its distributing scheme in order to address any of the socioeconomic issues that are conflicting with the society (Ali and Hatta 2014). In respect of the concentration of wealth, it helps in advocating and suggesting a fair distribution of the wealth whenever there are instances of insufficient. As such the system of distribution is not centralized, instead decentralized and needs every person from the community to look into the needs of the near relatives, neighbours, locality and society at large. Such approach possess as an important economic and social implications.

The Benefits of the Zakat System


The institutional approach of the Islam makes the use of Zakat in the form of distributive instrument for the solution to several of the problems both in respect of the economic as well as the social. Zakat forms an instrument that might be used effectively for the reduction and eventual alleviation of the poverty from the society (Huda and Islam 2016). This is regarded as the multipurpose strategy that is not only used to alleviate poverty but also it is used to rectify inequalities and the overall goals of the system of Islam.

Numerous attempts have been made to prove the effectiveness of the Zakat. The collection of Zakat is viewed as the appealing one because instead of limiting the collection to certain communities or specific people, the entire countries of the people can obtain the access of the programs which could significantly lower poverty.  

Zakat acts the major contributor in the generation of the employment. According to the opinion of jurist professional individual such as tailors, iron smiths, butchers etc might be granted with the monetary assistance to purchase their tools involved in their trade. A person engaged in cultivation of crops might be granted with capital from the Zakat funds to purchase plot of land to grow cops. In such a manner Zakat would help in increasing the opportunities of employment for underprivileged people and would help in the alleviation of poverty.  As described by Huda and Islam (2016), Zakat is a cooperative society, an insurance firm or a provident firm for the Muslims. Zakat is a fund for assistance of the unemployed and acts as the means of livelihood for disabled, the sick, the orphans, widows and the unemployed. Zakat can be regarded as the guarantee that no person shall be lacks of necessaries of life in the community of Muslims.

In the modern world capitalism is resulting in poverty on the higher side. On the other hand, there are large number of peoples that are deprived of their destitute while there are peoples that have handful of agricultural stocks lay unsold in their store (Johari, Aziz and Ali 2014). Under the system of Zakat it provides people with purchasing power. This was introduced in the time of Hazrat Umar bin Abdul Aziz (R.A) when the wealthy people search went in vain for those that required help from fund of Zakat. In Islam, people hoarding their wealth are subjected to Zakat and if such wealth is not invested in a profitable business then it is likely to get exhausted in the few years (Dhar 2013).  

The Institutional Approach of Zakat

As evident in Muslim community, people generally want to put their wealth in business ventures, private firms, and partnership or Mudarbah firms. As a result of this the economy would grow and expand with increase in the opportunities of job. Such practice would ultimately help in alleviation of poverty (Ahmad and Ma'in 2014). Hence, it can be stated that Zakat is considered as the most important tool of social security that can play an important role in the alleviation of poverty.

The Zakat is not unique in its capacity as the religious institutions as several communities across the world has been reliant on the religious institutions for obtaining services (Amos 2016). What makes zakat an important element in the alleviation of poverty is that its jurisdiction goes further than the religious leaders. As an alternative religious administrations and even governments have made themselves in responsibility of the gathering and supply of the zakat. Numerous attempts have been made to prove the effectiveness of Zakat.

The collection of Zakat by Ali and Hatta (2014), is considered to be an appealing one. This is because instead of restricting the collection to certain communities or certain people all the people across the countries will have the access to the programs that can significantly reduce poverty. It is only because of this reason the study states that proposing a mandated program for the collection of Zakat could help in analysis of the shortfalls and probable Zakat collection can help in alleviation of the poverty. The study can be concluded by stating Zakat is an important tool in the alleviation of poverty if the system is used as the robust macroeconomic policies, which increases the growth and redistributes the income since the collection of Zakat, can be used for numerous productive purpose (Ahmad, Othman and Salleh 2015).

Conclusion:

The concept of Zakat is considered as an interesting topic since it is imposing the already created institutions and implementing for use in the modern society. As Zakat has been created long before it is vital for the people to understand what it signifies for the modern society. An important assertion can be bought forward is that it helps in the creation more globalized system of Zakat because if the system of Zakat is understood on the wider macroeconomic terms it can be easily translated and implemented in the Muslim countries across the world.  

References:

Ahmad, I.H. and Ma'in, M., 2014. The efficiency of zakat collection and distribution: Evidence from two stage analysis. Journal of Economic Cooperation & Development, 35(3), p.133.

Ahmad, R.A.R., Othman, A.M.A. and Salleh, M.S., 2015. Assessing the Satisfaction Level of Zakat Recipients Towards Zakat Management. Procedia Economics and Finance, 31, pp.140-151.

Ali, I. and Hatta, Z.A., 2014. Zakat as a poverty reduction mechanism among the Muslim community: case study of Bangladesh, Malaysia, and Indonesia. Asian Social Work and Policy Review, 8(1), pp.59-70.

Amos, C., 2016. Overflowing Riches: Generosity, Divine and Human. In Poverty and Wealth in Judaism, Christianity, and Islam(pp. 275-286). Palgrave Macmillan US.

Clarke, M. and Tittensor, D., 2016. Islam and development: Exploring the invisible aid economy. Routledge.

Dhar, P., 2013. Zakat as a measure of social justice in Islamic finance: an accountants overview.

Huda, M. and Islam, A.S., 2016, July. SOCIAL BUSINESS: MEANING, SCOPE, AND EVALUATION. In 2016 Global Marketing Conference at Hong Kong (pp. 1262-1281).

Johari, F., Ab Aziz, M.R. and Ali, A.F.M., 2014. A review on literatures of zakat between 2003-2013. Library Philosophy and Practice, p.0_1.

Muhammad, S.A. and Saad, R.A.J., 2016. THE IMPACT OF PUBLIC GOVERNANCE QUALITY, ACCOUNTABILITY AND EFFECTIVENESS ON INTENTION TO PAY ZAKAT: MODERATING EFFECT OF TRUST ON ZAKAT INSTITUTION. International Journal of Management Research and Reviews, 6(1), p.1.

Yaacob, A.C., Mohamed, S., Daut, A., Ismail, N. and Don, M.A.M., 2013. Zakat disbursement via capital assistance: a case study of Majlis Agama Islam Johor. Journal of Emerging Economies and Islamic Research (JEEIR), 1(2).

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