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The Impact of Zakat on Poverty and Income Inequality in Bahrain



To achieve this, the author analyzes the failure of conventional economy tools in the treatment of problems of poverty and inequitable distribution of income, then presents the ability of Zakat to eliminate poverty in the Muslim community and eliminate the income gap, finally, the author estimates Zakat due in Bahrain and then states its role in eliminating poverty and income inequality. The most important results of the research are that Zakat can eliminate poverty in Muslim countries and achieve the desired justice in the distribution of income. The most important recommendations of the paper are the need to pass legislations for the collection of Zakat from different sectors, organizations, institutions as well as individuals in Bahrain. Also, the custodians of the Zakat and charity Fund in Bahrain must completely split between the Zakat funds and charity funds, so they can distribute the Zakat funds among the eight legitimate recipients. 1.
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The Impact of Zakat on Poverty and
Income Inequality in Bahrain
Dr. Hisham H. Abdelbaki
Department of Economics, Mansoura University,
The main objective of this paper is to assess the impact of Zakat on poverty and
income inequality in Bahrain.
To achieve this, the author analyzes the failure of
conventional economy tools in the treatment of problems of poverty and inequitable
distribution of income, then presents the ability of Zakat to eliminate poverty in the
Muslim community and eliminate the income gap, finally, the author estimates Zakat due
in Bahrain and then states its role in eliminating poverty and income inequality. The most
important results of the research are that Zakat can eliminate poverty in Muslim countries
and achieve the desired justice in the distribution of income. The most important
recommendations of the paper are the need to pass legislations for the collection of Zakat
from different sectors, organizations, institutions as well as individuals in Bahrain. Also,
the custodians of the Zakat and charity Fund in Bahrain must completely split between
the Zakat funds and charity funds, so they can distribute the Zakat funds among the eight
legitimate recipients.
Key words: Zakat, poverty, income inequality, Bahrain
Statistics indicate that only 20% of the world's population live at a high level of
comfort and luxury, while the vast majority of the population are experiencing poverty,
ignorance, hunger, and some of them live on less than a dollar a day, and the gap between
the two lives is increasing day after day (Todaro, 1981). The widening of that gap is aided
by some policies which affect the income and wealth of both parties. The odd thing that
such conditions are found in the same country, where there are regions / sectors /
categories sharply experiencing the manifestations of the low living standards, while
others live in the same country in a completely different life of luxury and wealth. All of
this is due either to the policies leading to poor distribution of income and wealth, or
policies that would widen the income gap or both.
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Poverty and income inequality are associated with strong interactive relationship,
Poor income distribution leads to the existence of the poor, and the existence of the poor
leads to lack of life and hence, lack of reasons to earn adequate income to meet living
expenses, thereby increasing poverty and widening the income gap between sectors,
thereby talking about the distribution of income may not be complete without first talking
about poverty. With varying levels of income among households in the same society
varies the demand for health, education and training, therefore members of the same
society will vary in their capacity and skills gained, then chances for employment and
obtaining appropriate wages will also vary and members of poor households would have
access to jobs of lower wages, while members of rich families to find higher wage jobs,
and thus the poor remains poor and the rich remains rich1
Table (1) correlation of poverty and income inequality in some countries
. Table (1) reflects that poverty
and income distribution are related. In developed country like Norway, the spending on
health, education and the military sector stands at 8.6% , 7.7%, and 2.05 of the total GDP,
respectively, and the GINI coefficient records 25.8, while these percentages represents
2.1% , 4.0% and 1.4% respectively in the State of Senegal where the GINI coefficient
reaches 41.3.
Country Health
(% GDP)
No. of
doctors per
persons 1990
- 2004
10 % the
richest to
10 % the
the 20%
richest to 20%
the poorest
Coefficient Public expenditure
on education (%
(%GDP (
High Human Development
UK 6.9 230 13.8 7.2 36 5.5 2.8
AUE 2.5 202 -- -- -- -- --
Medium Human Development
Jordan 4.2 203 11.3 6.9 38.8 -- 8.2
1 In the majority of developing countries ,education is an important factor in getting a job
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Low Human Development
Source: UNDP, Human Development Report 2006
In sum, poverty and income inequality are phenomena afflict the majority of
countries around the world, and despite the large number of studies and researches that
have been made to explain these phenomena and provide strategies to eradicate them, but
these solutions have failed for various reasons. Now, does Islam offer a viable solution to
eliminate these phenomena? 4TOn the other hand, despite the large number of researches on
the themes of poverty, the poor and income distribution, as well as the Islamic framework
on those topics, but there is no analytical study that encompasses the conventional
economic side for those issues together with the Islamic framework of them, hence the
importance of the current research which provides an analytical framework for the
conventional economic view on poverty and income distribution, indicating the
deficiencies of such view, and then shows that Zakat - the third pillar to the pillars of
Islam -is worthy of the eradication of poverty and income inequality in the Muslim
community. In practice, Bahrain did not estimate the size of Zakat to be collected, and of
course did not examine the economic impact of Zakat funds in solving the problems of
poverty and income inequality, and this - no doubt - is another importance for this
research. On this basis, the objectives of the research are to show that for the Muslim
community to observe and perform Zakat as was commanded by God almighty would put
an end to poverty and the income gap in the community, which was failed to be done
through policies and practices adopted by governments and nations in the conventional
economies. To achieve this, the author estimates Zakat due in Bahrain and then shows its
economic impact in the eradication of poverty and income inequality.
After the introduction, the author presents the concept of poverty and strategies to
fight poverty in the conventional economy, then the failure of policies and practices
adopted to fight poverty and income inequality in conventional economies is shown, as
well as the failure of international practices in this regard, after that, the author presents
the concept of poverty and income distribution in Islam and shows that, 4Tthe Zakat, if
observed and performed as ordered by God almighty, is capable of eradicating poverty
and income inequality in the Muslim communities. The model used to estimate the value
of due Zakat in Bahrain's economy and their impact on poverty and income distribution is
introduced. The author then displays the measurement results, and finally offers some
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To start, we must admit that poverty is a complex issue with political, economic and
social dimensions, and if the talk was about the presence of certain poor countries, we do
not rule out the conspiracy theory to keep them poor and in permanent destitute of rich
countries. For this, there is no specific definition that reflects this problem in all countries
due to different economic, political, social and ideological conditions. In general we can
say that poverty is the deprivation of any inability to acquire what an individual needs,
resulting in reduced consumption, and low health status and educational level, .... etc. The
World Bank has defined low-income or poor countries as those countries in which the per
capita income is less than $ 600 annually. Around 45 countries mostly in Africa match
this definition. Hence, the concept of poverty varies from country to country and also
within a single country from time to time, poverty is a dynamic phenomenon viewed
differently according to several factors, including economic, social and political factors.
It may be easier to identify who the poor are in order to develop an alternative definition
of poverty. The poor are those who cannot meet the basic needs of their livelihoods, and
consequently, suffer from malnutrition and sometimes from a lack of nutrition, low health
level, spread of diseases and also unemployment in its wider sense. Poor people suffer
from hunger, disease, ignorance and unemployment. The picture differs from one country
to another which called people to distinguish between many types of poverty, such as
relative poverty, absolute poverty and extreme poverty in addition to other types such as
individual poverty and social poverty, and so on. There are categories of work that is.
There are groups that work, gain a share of the education, have health insurance but their
income is not enough to remove their status of poverty (Abdelbaki, H., 2011).
Countries use packages of policies include price policies, income and wage policies,
labor market and production polices and other policy packages such as structural and
stabilization policies to alleviate poverty and achieve income equality. The effects of
these policy packages on poverty and income gap in the national economy may be direct
or indirect. The indirect effects conducted through effecting on demand and supply.
Whereas, the direct effect of the policies conducted through using employment, subsidy
and wage polices that effect directly on the workers especially in the formal sector. The
World Bank provides three approaches for poverty alleviation (The World Bank, 1991
& 2004): the first is to strengthen economic growth through helping the poor to increase
their productivity and then their wages. The main economic growth policies include
encouraging the small and medium businesses, supporting the rural development and
agricultural sector and offer the finance to the poorer areas. But experience has shown
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Analyzing the World Bank strategies to fight poverty state that these strategies are
marred by a lot of shortages and even conflicts with each other, they are demanding an
increase of government spending to support the poor, increase transfer payments, follow
the policies of price discriminations in the health sector and increase public investment to
bush the economic growth, particularly in rural areas.
effects of such policies have been limited. The second approach aims at increasing
the investment in human capital to push human development especially in the poorer
areas. The main objectives of these policies are to reduce dropout rates, decline illiteracy
rates, improvement the infrastructure in health and education areas, extend the health
insurance umbrella to cover the poor, provide clean water and sanitation to poor areas,
support civil society institutions, increase decentralization and participation in political
life. But those policies conflict with the deflationary policies that form the pillars for the
economic reform programs supported by the international monetary Fund and the World
Bank, as well as low public investment in general in these countries due to lower public
revenues available. Finally, the third approach is to raise the transfer payments to the
poorer areas to enhance the economic welfare. Again, this approach is contrary to
policies of economic reform programs.
All those strategies are contrary to
the general characteristics of the capitalist system which control the economic reform
programs imposed on the countries required to follow strategies for fighting poverty.
Consequently, the final results confirm the failure of those strategies as will be detailed.
In the following, we demonstrate the failure of policies applied in the conventional
economy to fight poverty and income inequality.
4.1 Failure of the Minimum Wage Policy
Government specifies a minimum wage for government workers to ensure them
the return that guarantees a decent life. There is no doubt that the value of minimum
wage varies from country to country and from time to time within the same country,
which requires continuous review of such policy to make sure it fits with current
prices. But what is happening in many countries, especially poor ones, that governments
are reluctant to carry this role, especially with the policy of hiring graduates and which
burdens governments and increases deficit in their public budget. This has led to a wage
freeze and a commitment only to the annual raise that does not commensurate with the
rates of inflation, which means a decrease in real wages. Real wages declined in Egypt
from 80.4 in 1980/1981 to 67.8 in 1994/1995 (Radwan, S., 1997); they also declined in
Yemen from 5,600 Yemeni riyals in the early nineties to less than 1,000 Yemeni riyals in
1996 (The World Bank, 1996). For the private sector, governments tend to consider that
the contract is the law of the contractors, which means that wages in this sector are
determined by supply and demand away from government control, which led to the
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increasing wage gap between public sector and private sector wages in some Arab
countries, including Kuwait and Saudi Arabia.
Wages and level of productivity are associated with a close relationship. With the
low level of labor productivity in poor countries generates low wages that do not provide
the basic needs of workers, for example, the cost of labor unit in Oman was reduced by
33% during the period 1980 to 1995 (Chami, S., 1991). Worker productivity is affected
by three factors, namely (Koriem, K., 2005): (1) the educational level (2) the availability
of health services and (3) the availability of access to assets and credit.
Unemployment leads to a high rate of dependency burden which
These factors are
also reasons for the low productivity which again supports low wages. Wages in many
poor countries became like subsidies for employees that weighs heavily on the public
budgets. Low productivity results in increasing numbers of unemployed and the
unemployment rate goes up leading to lower production and thus less employment and
income and the consequent problems of the recession. Although low labor productivity is
the main clear reason for unemployment, there are other reasons to support that, where
causes of unemployment differs from one country to another according to adopted
policies, In Egypt, the policy of hiring graduates that have been followed for a number of
years was a fundamental reason for the overcrowding in the public and government
sector with unemployed of the disguised unemployment type, while the policy of
bringing in foreign labor followed in the Gulf economies was an important reason in
overcrowded informal sector with non-skilled expatriate labor that competed with local
labor leading to spread unemployment among national workers for reasons, like not
accepting to work in some jobs on the one hand and not accepting low paid work taken
by the expats on the other hand.
affects income
distribution. For individuals with large families, the burden is high for family members at
working age that means that the working members will save less, since they need to
spend on the family, which will affect the distribution of income between different
groups due to different rate of dependency among them. It is worth mentioning that high
dependency ratio increases poverty and income inequality in the economy.
4.2 Failure of the Interest Rate Policy
In the conventional economy, the interest rate policy is used to achieve many
goals, including providing the necessary liquidity for the poor, but this goal in itself is
incompatible with the objectives of banking and financial sector in the conventional
economy, which aims to achieve higher profits, with the need for higher levels of
guarantees in the case of lending, which means that the rich are those who can benefit
from the financial sector in the economy. This conclusion is supported by the fact that the
financial system especially banks may be available in high income-classes and urban
areas and not available in low income-classes and rural with the same efficiency. And
that the families in the high income category in some regions may be aware and familiar
with banking transactions more than low-income groups in other regions. It is obvious
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that the marginal propensity to save among households with high-income groups in urban
areas often exceeds the marginal propensity to save in low-income families in rural areas.
Finally, the prevalence of self-investments in rural areas more than those in urban areas
results in the inability of those areas to benefit from that sector.
The negative impact of uncertainty on the financial markets and credit in the
national economy is shown in: (1) dealing in lemons, where the high interest rates affect
the return of financial institutions through two effects: the familiar positive effect, where
an increase in interest rates increases the revenues of financial institutions assuming
unchanging of other influencing factors. Then comes what is called the impact of adverse
selection, which works in the opposite direction, where raising the interest rates by
financial institutions increases projects with high returns and high risk as well, as
borrowers who are willing to pay high interest rates are themselves the owners of high
returns and high risk projects. At the same time borrowers with low yields and low-risk
projects retreat, as they do not want to pay high interest rates. As a result of this effect,
most borrowers are of the group of borrowers with low capacity to meet financial
obligations of financial institutions, here financial institutions have to deal with them and
name that process - that is, dealing with the worst credit borrowers as deal in lemons2.
On the other hand, higher interest rates may result in negative change in the behavior of
borrowers (Moral hazard), as higher interest rates will attract projects with high risk, and
reduce the expected return to borrowers of projects with low risk and low yield at a rate
greater than that for projects of high risk and high return, which may induce borrowers to
demand for the first projects, thereby reducing the revenues of financial institutions. If
interest rates were low, the direct positive impact for the increased interest rates may
have an effect equivalent to that of adverse selection and moral hazard, and then the
revenues for financial institutions would increase with the increase in interest rates up to
a certain level then the return falls as a result of the two mentioned effects. And (2) when
the two mentioned effects for interest rate are dominant, financial institutions prefer to
reduce the credit with consequent reduction of investment, leading to deflationary effects
on the national economy as a whole, and of course the poor segments are affected more
than others due to economic stagnation (Abdelbaki, H., 2012).
4.3 Failure of the Price Policy
2 Akerlof (1970) presented the problem of Lemon, where the buyer of a used commodity does not usually
have information on the quality of that commodity which is known to the seller that is why the buyer is
willing to pay an average price for the commodity. Then owners of good commodities would have to leave
the market because the average price is too low. Then lower-quality goods only remain which are called the
The use of price policy to affect poverty and income distribution means that the
government is reducing the prices of certain goods owned by categories, regions or
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specific sectors of society. Government sets a price ceiling for essential commodities
acquired by the poor3
Experiments proved the failure of those policies to restrain inflation as well as
countries that are required to follow those policies are also required not to intervene in
the functioning of markets and leave them to the supply and demand force.
4.4 Failure of the Exchange Rate Policy
But the practical application of the policy determines that its implementation
comes through the
By exchange rate policy, the price of the currency exchange is depreciated or
appreciated with an intention to make an impact on income distribution. Devaluation
policy affect the relative real prices of goods, which increases the prices of export
commodities denominated in local currency and lowers the prices of those commodities
denominated in foreign currency, which lowers domestic demand for foreign goods, and
increases foreign demand for domestic goods leading to increased exports and reduced
imports, or in other words, more cash inflow and less cash outflow. Such changes would
encourage production for export, increasing domestic production and thus employment
and income in the export sectors, which means to redistribution of income in favor of the
sectors concerned.
Devaluation policy with the consequent of high inflation rate due to
rising import prices, which adversely affects the poverty and the poor, in addition that the
wealthy sectors are benefiting from this policy at a degree more than the poor sectors.
4.5 Failure of the Subsidy Policy
3 Another purpose of setting a price ceiling is to stop the inflationary trends in the community.
The networks of social security, aim at reducing the income inequality by
providing different forms of support to the poor. The efficiency of such networks is
measured by their ability to deliver support to various beneficiaries. On comparing the
efficiency of Zakat and the efficiency of the social and governmental security networks in
Yemen, the study showed that the efficiency of Zakat to reach the beneficiaries is greater
than that of social and governmental security networks. The study also indicated that the
effect of Zakat network is wider than that of the social and governmental social networks,
as well as the average value of the amounts transferred to needy family in the case of
Zakat exceeds that of the support received through social networks, (Alqudsy, S., 1995),
which is shown in table (2), where the poorest deciles received YR 940 of Zakat, and the
same deciles received 886 riyals from security networks. The richest deciles got 469
riyals from Zakat, and 739 riyals from security networks, which confirmed the efficiency
of Zakat to reach the deserved recipients compared to social and governmental security
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networks. It is noted that transfers of international organizations are characterized by low
efficiency as well.
Table (2) Zakat and government and non-government networks efficiencies in Yemen
Government and
from inside
individuals transfers
from abroad
4TSource: Alqudsy, S., 1995.
As for subsidy of goods, studies have shown that the kind of government subsidy
programs do not always achieve efficiency in the delivery of subsidy to those who
deserves it, especially with the spread of corruption in various forms like bribes and
embezzlement etc4T. In Egypt, the government's subsidy of bread was characterized by low
efficiency, especially in rural areas (Adams, 2000). In Yemen also, the subsidy programs
for wheat, electricity and fuels are characterized by low efficiency to reach those who
deserve them, as the share of the poorest deciles of wheat subsidies does not exceed 2.5,
while the share of richest deciles of the same mounts up to 30.7. The case is same for fuel
subsidies; the share of the poorer deciles reaches only 2.0, while the share of richest
deciles reaches 37.1. In the case of electricity subsidy, the share of poorest deciles
reaches 6.4, this amount increases until the sixth deciles then falls for the seventh deciles,
then starts increasing with the income till it reaches 13.1 for the richest deciles (table 3).
The situation in Kuwait does not differ a lot with government providing a package of
cash and good-subsidy programs, where subsidy for high spending elasticity commodities
like electricity and fuel makes the higher income groups benefit more than low-income
groups. In the case of drinking water subsidy, the share of the richest deciles is higher
than the share of the lowest deciles by 21-times (Al qudsy, S., 1995).
4T Table (3) Distribution of good subsidies in Yemen
Income deciles
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poorest deciles
Richest deciles
4TSource: The World Bank, 1996
In summary, the social security networks have failed to deliver support to those
who deserve it for many reasons, especially the spread of corruption in the countries that
suffer from poverty and income inequality.
4.6 Failure of Tax Policy
4TIn developing countries, which usually suffer from problems of poverty and
income inequality among its citizens, the main objective of taxation is to increase
revenues through increasing tax rates, which leads to a decline in economic activity and
decreases production, employment and income. The influence of this policy is stronger
on the poor. 4TMoreover, the tax policy in the majority of developing and poor countries
suffers from many disadvantages and obstacles that eliminate the efficiency of such
policy and its role in the income redistribution in favor of the poor classes. 4TOf those
problems are tax evasion, costs of collection, corruption of tax collective system, poor
use of tax revenues for the benefit of the economy, in addition that an inappropriate tax
policy leads to inflation, with all the burdens it leave on the poor.
In addition to internal policies exercised optionally or mandatory by each country for
the treatment of problems of poverty and income inequality, there are some practices and
international policies that affect developing and poorest countries and aggravate their
problems of poverty and income inequality. Following are the most important of these
5.14T Economic Reform Programs
No doubt that the economic reform programs determined by the IMF and World
Bank are capitalist programs aimed at reducing the economy’s role in economic activity
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by reducing public spending in general and subsidies, in particular, activating the market
prices mechanism
Regardless of the mandatory policy for poor countries to implement such
programs, the negative effects of these programs as a whole exceeded their positive
effects, resulting in increased numbers of the poor, spread of unemployment, deepening
recession and the consequent effects in those countries
, encouraging the private sector. These policies and procedures are
negatively affect the poorer sections of society and increase the income gap. The effects
of economic reform programs on poverty and income distribution in the national
economy can be measured using three standards: first is the standard of real income,
where a drop of the real income in the economy means that the economic reform
programs had a negative impact on poverty and income distribution, second is the
standard of cost of living, where the rise in the cost of living reflects the negative effects
of the programs concerned, and finally the standard of social services provided by the
national economy at affordable prices, where an increase in such services means that the
economic reform programs have positive effects on poverty and income distribution in
the society.
. After Algeria had come a long
way in economic reform programs, the unemployment rate among citizens less than 20
years old was 49% in 2004, 44% among young people aged between 20-24 years, and 73
% among those less than 30 years in that year compared to 42% in the year 1996. It is
not different in Egypt, which adopted the economic reform programs with the IMF and
the World Bank in 1990, where such programs had resulted in deep negative effects on
poverty and the poor as well as widening the income gap. Although Egypt tried to
mitigate the negative impacts on the poor through some programs including the Social
Fund but, malpractice, corruption and weak budgets prevented the achievement of
desired objectives, poverty and the poor has increased significantly, as the Egyptian
household Expenditure Survey showed that 44% of the populations are not able to get the
minimum adequate food (Abdelbaki, H, 2003).
5.2 Globalization and the New World System
International economic system means the set of rules and arrangements that have
been developed after World War II to set the code of conduct in the economic relations
between different countries, and globalization is one of the steps in this system. The
international economic system consists of 1 - the international monetary system, which is
the system that governs and sets rules of conducting in all matters relating to exchange
rates, balance of payments, sources to finance deficit and the quality of corrective
policies that countries may be follow, and thus the system is supposed to ensure
international monetary stability in the new world economic system, through the
International Monetary Fund. And 2 - the international financial system, which is the
system that governs the code of conducting in all aspects of transactions or transfer of
international capital, whether they were in the form of foreign aid or foreign loans,
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whether they were formal or of business form and whether they were foreign direct or
indirect investment, through the world bank. Finally, 3 - the international trading system,
which is the system that governs the rules of conduct in all matters relating to export and
import of goods, and to determine what may and may not be of protectionist measures or
export subsidies, and even work through this system to liberalize world trade to increase
international exchange and consolidate the principle of interdependence and maximize
the return on international trade for all parties in the global economy. The Secretariat of
GATT worked to maintain the continuity of this component of the global economic
system, until the formation of the World Trade Organization (WTO), following the
Uruguay multilateral trade negotiations, to take over the administration of the
International trading system as of January 1995 (Sharaf, A., 1992; Sameeha, F., 1993).
It goes without saying that the worst consequences of globalization and new
international system were those huge changes which negatively impacted social
development, including what happened in Eastern Europe and Central Asia, where the
numbers of poor were aggravated, also the ignorance of industrialized countries of the
global warming issue which was originally caused by them. But, the most serious result
of globalization and new international system was the global economic and financial
crises, which when appear in one country quickly spread all over the world whether
poor or rich, but the greatest impact, of course, falls on the poor countries which were not
the cause of these crises. The world is still recovering from the recent global crisis that
began in the United States as a result of irresponsible practices from the financial and real
estate sectors, but the impact covered the bulk of the international economy, and perhaps
the effect was weak in China because it has been conservative on globalization and its
application. Then comes the blatant interference by dominant countries in the politics of
weaker nations, which adversely affects the economics of these nations causing situations
to worsen.
In sum, the international practices, although sometimes designed to treat the
problems and shortcomings in the policies of poor countries, but the overall effects are
not in favor of the poorer classes in those countries.
In this part, the concepts of poverty and income distribution in Islam, and then
how the Zakat, as one of the pillars of Islam, can eliminate poverty and achieve the
equality in distribution of income among the members of the Muslim community as well
as among different generations is presented. Then the author displayed a model to
estimate the value of Zakat in Bahrain, and measure their impact on poverty and income
6.1 Concept of Poverty in Islam
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Islam encourages people to go for the legitimate productive work through a
several orders and instructions in holly Quran and Hadith: God almighty said: And when
the Prayer is finished, then may be dispersed through the land, and seek of the Bounty of
Allah. And celebrate the Praises of Allah often (and without stint): that may prosper.
(Al-Jumaa, verse, 10). The prophet's says: (the best profit for a man is what he makes
with his hands and whatever a man spent on himself, his sons and his servants is charity)
way of (Sunan) Ibn Majah, chapter of motivation to gain, No. 2137. Also He says (the
best food eaten by a man is from the work of his hands, and that Prophet of God David
was eating from the work of his hand) Fath albari to explain Sahih Al-Bukhari, Ibn Hajar,
book of sales, chapter of earning of the man, section 9, p 154. Islam forbids beggary
where Islam considers the legitimate productive work as the right way to fulfill the needs.
Beggary are only permitted in three cases: 1) in case of extreme poverty, 2) in case of the
debtors, and 3) in case of those fined due to blood money. It is clearer that begging
without an urgent need is illegitimate in Islam. The holy Prophet says “(he who ask
people for their money to grow his money is just asking a firebrand, so he might ask for
more or less”, Muslim, Saheeh, the chapter of hatred of Begging, section 2, p
720. However Islam acknowledges poverty and considers it a danger to the family and
the society as a whole, Islam also considers poverty as scourge and we should seek refuge
in Allah from its evil. The Holy Prophet used to seek refuge saying (O Allah, I seek
refuge in You from the trials of fire, torment of the grave, and seek refuge in You from
the temptation of wealth, and seek refuge in You from the trials of poverty) also the
prophet peace and blessings be upon him used to pair seeking refuge from poverty and
disbelief saying (O Allah, I seek refuge in You from disbelief and poverty, I seek refuge
in You from the torment of the grave, there is no god but You,) "narrated by Abu
Dawood. Poverty in Islam means need or want, God Almighty says " O mankind, you are
those in need of Allah " in the sense you are in need of God. God also said "and God is
rich and you are the poor who need him" in the sense of the need for the necessities of
life. Islam differentiates between the poor and needy, the poor is who have what is not
enough, the needy is who have nothing to take shelter with. Islam also distinguishes
between different types of poverty, relative poverty means variation of people's income
which is recognized as a universal norm due to the varying capacities of individuals and
the amount of efforts they put in their work, God almighty says, " And it is He who has
made you successors upon the earth and has raised some of you above others in degrees
[of rank] that He may try you through what He has given you" (165, Al-Anaam),also God
almighty says," Do they distribute the mercy of your Lord? It is We who have
apportioned among them their livelihood in the life of this world and have raised some of
them above others in degrees [of rank] that they may make use of one another for service.
But the mercy of your Lord is better than whatever they accumulate" (32, Zukhruf). The
goal behind the variation in livelihoods is tribulation, dedication of work and order to set
life straight, people vary in their abilities, their skills and efforts, and then their works,
revenue and income. Then there is class poverty which means the inability of the
individual to satisfy his needs, in other words, the inability to achieve sufficiency.
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Sufficiency means the necessary money to provide the basic needs of the individual, to
set his life straight and live according to the prevailing living standards, hence sufficiency
is a dynamic concept that changes from one society to another and from time to time
within the same society. For the Muslim community to live in harmony, peace and
security Islam imposed many forms of mandatory and redundancy worships to reduce
poverty in the Muslim community on the one hand and to ensure full security between
rich and poor on the other, in order to ensure minimum standard of living for the poor,
which guarantees them sufficiency.
6.2. The Concept of Income Distribution in Islam
Islam sees that absolute justice means the disparity of livelihoods with the need to
achieve human justice. Islam also rejects considering money as the great fundamental
value, but the individual should have sufficiency preferably through individual ownership
or through a productive work in its various forms. Islam confirms absolute equality of all
Muslims in the provision of sufficiency, in other words, if a Muslim is unable to provide
enough for his illness or old age or.... etc, the government should provide that to him
from the treasury. God almighty says "Indeed, it is [promised] for you not to be hungry
therein or be unclothed. And indeed, you will not be thirsty therein or be hot from the
sun." (Taha, verses 118 and 119), the prophet (pboh) says "he who sleeps sated and his
neighbor is hungry is not a believer in me" (al Suyuti), but, for more than sufficiency,
Islam confirms variation
In Islam, income and wealth are distributed via three stages: first is the initial
distribution of wealth through acquisitions, where Islam recognizes private property
according to specific conditions and procedures based on the principle (that wealth is the
wealth of God and human beings are appointed as successors to that wealth). Islam also
regulates the investment of private property by a set of rules and restrictions to ensure the
provision of community needs and well-being of its members. Islam also recognizes
public property in order to achieve specific goals, such as achieve balance between
individuals in one generation, achieve balance between successive generations, and
achieve development of the Muslim community. Second, through which revenues are
distributed over the factors of production in the community. Finally in the third stage,
some changes are introduced to the existing distribution of income and wealth, or the so-
called redistribution of income in favor of certain groups at the expense of other
6.3 The Role of Zakat in Eradicating Poverty and Income Inequality
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In this part, the author demonstrates that Zakat is an important tool, if performed
as it should, can eliminate poverty and achieve justice in the distribution of income and
wealth in Muslim societies.
6.3.1. The Objectives of Zakat
God almighty imposed Zakat, as He says "So establish regular Prayer and give
regular Charity; and obey the Messenger that ye may receive mercy,"(Al-Nur, verse 56).
From Zakat many effects are resulted on the individual and society, it cleanses the heart
of the one who performed Zakat and removes rancor and hatred from the heart of the one
who deserved Zakat, and then establishes security and tranquility in the community, and
addresses many other social problems. In addition, Zakat Blesses and develops the money
and increases the merits of the performer. God almighty said, "The parable of those who
spend their substance in the way of Allah is that of a grain of corn: it growth seven ears,
and each ear Hath a hundred grains. Allah gives manifold increase to whom He please:
And Allah cares for all and He knows all things." (Al Baqara, verse 261). Objectives of
Zakat are many; those can be summarized into moral, social and economic objectives.
The moral objective is visualized in cleansing of the Zakat funds; the social objective is
visualized in the redistribution of income in favor of the eight social groups4 especially
the poor and needy. The economic objectives is visualized in fighting hoarding and
moving the cash 5flow to support the necessary expenditure at the expense of luxury
spending, fighting consumer loans and encouraging non-usury loans for those in
bondage or heavily indebted (AL GHARMEEN).
6.3.2. Zakat and Eradicate Poverty and Achieve Equitable Distribution
Zakat plays an important role in reducing the problem of poverty in the Muslim
community, in addition to its vital and influential role in its development through
redistribution of income and wealth for the benefit of the poorest. But the important
question now is: is performing Zakat alone in the manner intended by God Almighty
sufficient to achieve these two objectives: eradication of poverty and the achievement of
equal distribution? We try to answer this question through the following points:
4 God almighty says” Alms are for the poor and the needy, and those employed to administer the (funds);
for those whose hearts have been (recently) reconciled (to Truth); for those in bondage and in debt; in the
cause of Allah. and for the wayfarer: (thus is it) ordained by Allah, and Allah is full of knowledge and
wisdom.”Al Baqara, verse 60.
Islam had exclusively determined the eight groups to whom Zakat funds could be
given, and it is noted that these groups are the poorest in society, consequently,
expenditure on necessary consumption increases thus increasing the aggregate demand in
the community. Employers respond to this increase by increasing employment and
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production in the next stage which increases income. Depending on the income, a new
cycle of increased demand and employment, production and income starts and so on. Due
to spending multipliers in the community, income will be multiplied accordingly, and the
national economy will be revived. On the other hand, the marginal utility of money for
the rich is lower than that of the poor, and therefore the latter will be keen to spend Zakat
funds received to purchase the necessary goods only as already mentioned. Also
increased spending leads to increased marginal propensity to consume in the community,
thereby increasing the value of the multiplier, and then increase the strength of its effect
on the national economy.
Since Zakat was imposed on saved money, the lack of investment of such money
leads to erosion year after year which is an irrational behavior that Islam does not
approve, so 'Umar ibn al-Khattab said (Do trade in the property of orphans so as not to be
eaten by Zakat)6. Also holding the money and not performing Zakat on that money is
forbidden in Islam. Thus, the saved money would move into investment which would
benefit the community, through the revitalization of demand and production and then
employment and income.
The individual who is to pay Zakat must go to where there is Zakat beneficiary to
give him his due, and here is where the greatness of Islam is shown, this consolidates in
the owner of the money that there is a due to be paid and he needs a Zakat beneficiary to
give him this right, on the other hand, it saves the face of the person entitled to Zakat.
And economically, this means the absence of evasion from payment of Zakat as is the
case of tax, and also eliminates the expenses of collection.
One of the forms of giving Zakat is to the indebted (AL GHARM) , and AL
GHARM is a person who cannot meet a debt he has which is not the result of sin or
wrong doing, this form also include a person who lost his business, his factory or his
goods. Hence the direction of Zakat to them means to re-integrate them into the
production process, and hence the community will continue to benefit from them and the
production is not affected by their circumstances7
Zakat may be accelerated when needed, for example, the payment of Zakat may
be accelerated in the case of economic recession, which will help to avoid recession
6 "See Imam Malik bin Anas al-Muwatta, number (588), (103/2), the Arab Book House, Beirut, 1988."
7 Mujahid said - a Mujahid bin Jabr Al Imam Sheikh of readers and commentators - in share of debtors: "
debtors are Three: A man flood wipes his money, a man fire went away with his money, and a man with
children and no money ,he is indebted and spends on his family" and this year we don't exempt someone
lost his investment and lost his money, or someone who borrowed for investment business and lost for
one reason or another".
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through payment of debts, production, employment and income. It is also allowed to pay
the full Zakat in one of its eight forms to ensure the achievement of its objectives.
Zakat does not cease to exist once you do it for one time, but it remains
mandatory as long as its two conditions: the required amount of money and the time
period exist. Also the diversity in Zakat forms means that it could be performed
throughout the year.
Zakat will not be accepted by God unless they were from a good legitimate source
(halal), the Prophet (pboh) says: (God the almighty only accepts charity from good
money, and a charity from a good source given by a man would be accepted and
developed by God as if someone is developing and caring for his foal)
In sum, the Zakat - If performed as imposed by God Almighty -would be enough
to eradicate poverty and then poor distribution of income in Muslim societies. It is
sufficient to note that the financial assets in banks for the wealthy Arabs their number is
estimated at two hundred thousand - is more than 1190 billion dollars (Boulard, B.,
2001), and then value of Zakat levied on those amounts is 29.8 billion dollars. These
amounts are capable of eradicating poverty in Arab countries, and create employment
opportunities for the unemployed in all Arab countries. Therefore following the
principles of Islam through one pillar only (Zakat) can guarantee the eradication of
poverty and then income and wealth inequality in Islamic communities.
The Kingdom of Bahrain has taken many procedures and policies for the
reduction of poverty and poor distribution of income in the Kingdom (Abdelbaki, H.,
2011). Among the most important procedures taken in this regard were the establishment
of the Zakat and charity Fund based on the Decree-by- Law No. (8) For 1979 amended
by Decree-by- Law No. (12) For the year 1993, to be the official agency accredited for
the collection of Zakat and charity and distributing them to recipients according to their
legitimate forms. The fund aims to increase awareness of the obligation of Zakat and
show the importance of performing it, the development of sources of Zakat and alms and
the mechanisms for their collection and disbursement and work to bridge the need of poor
families eligible for Zakat. The total aid provided by the Fund for needy families over the
last six years was about 1060458, which included more than 2000 families. In practice in
the Kingdom of Bahrain, the Zakat and charity Fund collects Zakat and alms money
optionally from institutions, bodies and banks that are willing to pay that money and the
majority of that money is donated as alms. The Fund does not Separate the Zakat funds
and charity funds when distributing, as well as the fund suffers lack of human resources
required to manage work perfectly.
7.1. Calculating total value of Zakat in the Muslim national economy
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Three types of Zakat should be collected in Islamic economy; 1- Zakat on the current
income, 2- Zakat on capital and 3- Zakat on saving. The total Zakat value is:
R = Ry + Rs + Rk
Ry= Z (1)
Rk = Z £ Y (2)
k x Kn
Rs = Z (3)
s x S = Zs
* j * g * Yd 0 < j < 1 , g = 1- b
Where R is the total value of Zakat in the national economy, Ry is the Zakat value on current
income in the economy, Rs is the Zakat value on savings, Rk is the Zakat value on capital in
the economy, ZRyR is the Zakat ratio on current incomes, £ Y is the committed to Zakat, ZRsR
Zakat ratio on savings, S saving committed to Zakat, g is the propensity to save, b is the
propensity to consume, ZRk RZakat ratio on capital, and finally, KRnR is committed amount of
capital to Zakat. The total Zakat value equation can be rewritten as follows:
R = ZY (£ + j * g) + ZKRnR = z (Y (£ + j * g) + KRnR)
Where Z Is the average weighted of ZRsR ،ZRyR ،ZRkR
7.2. The Effect of Zakat on Poverty
The Zakat value on the national economy will be spent on its Sharai outlays which is the
poor. Then will help in alleviating / eradicating the poverty and the poor in the economy.
To catch the effect of Zakat in this issue, we estimate the portion of the Zakat that goes to
consumption and, partly, to the investment in the national economy. The Zakat value
directed to the consumption can be written as:
RRc R = dR (6)
RRc R = d x z (Y (£ + j * g) + KRnR)
7.2.1. Effect of Proportion Spend on Consumption
The consumption function in a conventional (secular) economy can be written as:
CRSR = a + b Y (8)
In Islamic economy, the consumers divided into two groups: Zakat payers (group 1) and
Zakat recipients (group 2). The marginal propensity to consume for group 1 is different
from that for group 2. The consumption function in Islamic economy, therefore, becomes:
CRI R= a + b (β Y α Y) + c ((1- β) Y + α Y)) (9)
Where b and c are marginal propensity to consume of group 1 and 2 respectively. βY Is
income of group 1, (1- β) Y , is income for group 2, and αY is the amount of Zakat paid.
The consumption function above is greater in value than that is in a conventional (secular)
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economy. The effects of that are two effects; it will reduce the poverty and the poor
people in the economy and will increase the total demand which leads to increase
production and employment in the economy which support the first effect especially with
the expenditure multipliers effects. This analysis is based on three assumptions; first, the
marginal propensity to consume of the Zakat-receivers is higher than that of the Zakat-
payers. Second, there are always enough poor people in the country to receive Zakat.
Third assumption is the government spends the Zakat on its eight categories with a very
high priority to the poor and needy.
7.2.2. Effect of Proportion Spending on Investment
This part of spending comes from invest in projects that support increases the
poor income such as investment in small skill project and by reactivate the projects of AL
GHARMEEN by paying their debits. The investment function in Muslim economy can
be written as follows:
I1 = I0
Where I
- β (r Z) (10)
I = I
is the independent investment, r is the share return, Z is Zakat ratio, and β is the
constant investment coefficient. Adding the Zakat portion that directed to the investment
function becomes as follows:
R + RI (11)
Where I refers to total investment, I
= (1- d) R = (1-d) x z(Y (£ + j * g) + Kn) (12)
1 independent investment, RI
is the Zakat value
directed to investment.
Using the previous model, we calculated the total value of Zakat imposed in
Bahrain's economy during the period 1990 - 2010, which is consisting of Zakat on the
current incomes, Zakat on Investment and Zakat on savings. The results show that the
value of total Zakat has increased from BD 95.3 million in 1991 to BD 139.1 million in
1997 and decreased in 1998 to BD 114.7 million, then increased to reach BD 623.5
million in 2008 and decreased again in 2009 to BD 485.8 million.
To measure the impact of Zakat on consumption, the value of oriented Zakat
(allocated) for consumption is calculated assuming three values of 0.7, 0.75 and 0.8 for
the marginal propensity to consume, then the number of families that can benefit from
those values is estimated. The number of beneficiary families is estimated by dividing the
value of Zakat for consumption on the middle-income, as the studies that were conducted
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on poverty in Bahrain during the period 1987 - 2008 set the poverty line between 309
dinars to 403 dinars per month (Abdelbaki, H, 2011), so we assumed that the poverty
line in Bahrain is determined at 400 dinars per month. The number of families that can
benefit from the funds of Zakat reached 17,070 families in 1990, this number increases
during the period 1990 to 2010 with the exception of 2009, to reach up to 119,288
families in 2008, and 102,275 families in 2010, which means that, based on the marginal
propensity to consume which is equal to 0.7, the Zakat funds are capable of eradicating
poverty in Bahrain. These numbers would increase in the cases of marginal propensity of
0.75 and 0.8, respectively.
For measuring the impact of Zakat on investment, the author calculated the
number of projects that could be financed with Zakat funds allocated for investment on
the basis that the portion of Zakat funds allocated for investment equals the total value of
Zakat money minus the portion of Zakat funds for consumption. The numbers of projects
that can benefit from the Zakat funds allocated for investment were calculated by
dividing these funds on the average cost of small projects based on the estimations of the
studies carried out in this regard. The number of projects that can benefit from that
money reached 44 projects in the year 2001 increased to 263 projects in 2010. Assuming
that a small-scale project employs 10 workers, these projects could provide 440 and 2630
job opportunities in the years 2001 and 2010 respectively. So, providing job opportunities
would increase income and consumption in addition to savings and investment and, due
to spending multipliers, the domestic income of the Bahraini economy would double8
Finally, to assess the impact of Zakat on the gross domestic product, the
researcher calculates the gross domestic product after the impact of Zakat on
consumption and investment, as well as calculating the value of change in gross domestic
product as a result of change in investment multiplied by the investment multiplier
All that would reduce poverty and income disparities between income groups in Bahrain
because Zakat money funds small projects owned by low income groups and also provide
jobs for the unemployed.
9. The
results show GDP values after Zakat are greater than those before it and the gap between
them increases over time10
8 According to the three assumed values of marginal propensity to consume.
9 Value of the multiplier was calculated according to the three assumed cases of marginal propensity to
consumption in the research.
10 It goes without saying that the decline in GDP in 2009 was due to the negative impact of the global
financial crisis.
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The research aimed at showing that the problems of poverty and income
inequality represent global phenomena that, despite the attention of researchers and
politicians in them and the efforts made to reduce them through many strategies and
policies but, they failed to achieve the desired results. The author explained that the third
pillar of Islam "the Zakat" is capable of eradicating poverty in Muslim communities and
achieve the desired justice in the distribution of income and wealth. The author estimated
the size of Zakat imposed in Bahrain and its economic impact on the eradication of
poverty and income distribution. The most important recommendations are the need to
pass legislation that requires the collection of Zakat from different sectors, organizations
and institutions as well as individuals. Also, the administrators of the Zakat Fund must
completely separate between the Zakat funds and charity funds, so they can be able to use
Zakat funds in the eight legitimate ways. The most important limitation of the current
research is not taking into account the possibility of not directing all Zakat revenues to
the poor, where the more money directed to poorest eligible (first of the eligible
categories) the greater the effect will be on consumption, then on poverty and income
distribution, and that requires a comprehensive field study.
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... examined that Islamic economics is the scientific research of making the best possible use Allah's (SWT) available financial resources to produce the maximum allowable output of Halal product and services that are required in the society now and in the long term, as well as the equitable distribution of this output within the structure of Shariah and its purpose. Abdelbaki (2013) found that according to Islam, Absolute justice entails the difference of livelihoods as well as the need to attain human justice. Islam actually denies money as a great essential value, and arguing that an individual should be self-sufficient, either through personal ownership or constructive work in many ways. ...
... MJIA imposes zakat on savings and gold only. Unfortunately, the zakat funds are not separated with Sadaqah (donation) funds thus zakat fund may be distributed to non-asnaf (Abdelbaki, 2013). In terms of fund distribution, MJIA conducts various programs including food coupons to family in needs, Eid Fitri costume, project for people with disabilities and autism and winter clothing. ...
... In 1957 The Federal Constitution of Malaysia declares Islam to be the country's state religion. Except in Federal territory, where Shariah law and administration are regulated by the Federal government, all matters relating to Islamic laws and customs, including zakat administration, are under the jurisdiction of the various states, which are the Sultans(Abdelbaki, 2013;. In addition, a State Islamic Religious Council advises the Sultan of each state. ...
Full-text available
The purpose of this research is to investigate the role of ‘Zakat and Ushr’ as a key tool to achieve sustainable development in Bangladesh. The study also proposes an alternative model for Zakat distribution analyzing drawbacks and challenges of prevailed Zakat distribution system. The present study used qualitative approach with intensive interview on about zakat practices in Bangladesh. The study finding from the literature surveys about Zakat distribution affirm that an alternative model for Zakat distribution system can ensure sustainable development through decreasing the rate of poverty based on the Umar bin Al Khattab (RA) and Ummar bin Abdul Aziz poverty model. The study shows that Zakat providers in Bangladesh distribute Zakat in an unplanned and unstructured way which is not the purpose of Zakat according to the direction of Quran and Sunnah. In the prevailed system, Zakat providers distribute Zakat mainly in the month of Ramadan and individual Zakat providers divide whole portion of individual Zakat amount among mass people which are being helpful for poor people to run their family for a very short period of time. Therefore, based on above findings the present study proposes an alternative model for distributing Zakat in Bangladesh considering the direction of Al-Quran and Hadith. This proposed model suggests engaging local leaders, Imam of mosques, Zakat providers and Zakat receivers that can ensure building community-based Zakat funds to develop individual poor people for a long period of time.
... The payment of zakat has many resulting impacts on individuals and society. According to Abdelbaki (2013), zakat is able to cleanse the heart of someone who pays zakat, eliminate grudges and hatred in the hearts of people who receive zakat, create security and peace in society, multiply the wealth and rewards of someone who pays zakat, and is able to solve various other social problems. . One of the zakat orders in the Qur'an is contained in the letter At-Taubah verse 103 which reads: ...
... According to Abdelbaki (2013) who conducted research on the impact of zakat on poverty and income distribution in Bahrain, he stated that zakat in Islamic economics is a fiscal policy capable of creating the desired justice in income distribution and eliminating poverty in a country. The results of this study are in line with Fadila's research (2019) who conducted research on the relationship between the distribution of zakat and the gini ratio in Indonesia, which resulted in the finding that there is a negative and significant correlation between the distribution of zakat and the gini ratio in Indonesia based on the results of Pearson's correlation analysis, which means that if distribution of zakat has increased, the gini ratio has decreased and vice versa. ...
... This means zakat, infaq, and alms are included in Islamic philanthropic instruments which in social life can play a role in improving people's welfare if managed properly. According to some previous research conducted by Abdelbaki (2013), Darsono et al. (2019), Fadila (2019), and Afandi et al. (2021) stated that the amount of income inequality in society has decreased significantly due to the distribution of Zakat, Infaq, and Sadaqah (ZIS) funds to mustahik. Different results were found by Senadjki et al. (2015) which stated that in 14 states of Malaysia, zakat does not have a significant impact on the level of income inequality. ...
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ABSTRAK Tujuan utama dari makalah ini untuk menguji secara empiris pengaruh zakat, Produk Domestik Regional Bruto (PDRB) perkapita, Upah Minimum Regional/Provinsi (UMP), dan inflasi terhadap tingkat gini rasio di 34 provinsi di Indonesia selama tahun 2018-2020. Temuan penelitian ini menunjukkan bahwa distribusi zakat yang diproksikan dengan Indeks Kesejahteraan BAZNAS serta tingkat inflasi secara statistik tidak berpengaruh signifikan terhadap tingkat ketimpangan pendapatan di Indonesia. Sementara itu, tingkat PDRB perkapita dan UMP memiliki arah hubungan negatif dan berpengaruh signifikan secara statistik terhadap tingkat ketimpangan pendapatan di Indonesia. Penelitian ini memberikan rekomendasi kepada pengelola zakat untuk menciptakan dan mengembangkan program zakat yang mampu memberdayakan perekonomian mustahik sehingga mampu mengurangi tingkat kesenjangan pendapatan dalam masyarakat. Selain itu, seluruh pemangku kepentingan (stakeholders) harus bersinergi dalam upaya meningkatkan realisasi pengumpulan dana zakat di lembaga dengan melalui peningkatan literasi dan kesadaran masyarakat guna mengoptimalisasikan peran zakat dalam peningkatan kesejahteraan masyarakat. Kata kunci: Indeks Kesejahteraan BAZNAS, Ketimpangan Pendapatan, Makroekonomi, Zakat. ABSTRACT The main objective of this paper was to empirically examine the effect of zakat, Gross Regional Domestic Product (GRDP) percapita, Regional/Provincial Minimum Wage, and inflation on the gini ratio in 34 provinces in Indonesia during 2018-2020. The findings of this study indicate that the distribution of zakat, which is proxied by the BAZNAS Welfare Index, and the inflation rate has no statistically significant effect on the level of income inequality in Indonesia. Meanwhile, GRDP per capita and Regional/Provincial Minimum Wage levels have a negative and statistically significant relationship to the level of income inequality in Indonesia. In order to lessen the degree of income inequality in society, this study offers recommendations to zakat managers on how to design and develop zakat programs that can strengthen the mustahik's economy. In addition, all stakeholders must work together in an effort to increase the realization of zakat fund collection in institutions by increasing literacy and public awareness in order to maximize the contribution of zakat to raising the welfare of mankind. Keywords: Baznas Welfare Index, Income Inequality, Macroeconomics, Zakat. REFERENCES Abdelbaki, D. H. H. (2013). The impact of zakat on poverty and income inequality in Bahrain. Review of Integrative Business & Economics Reseacrh, 2(1), 133–154. Afandi, A., Rantung, V. P., & Marashdeh, H. (2017). Determinants of income inequality. 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... Previous research has studied the role of Islamic finance in poverty alleviation. For example, research by Abdelbaki (2013) analyzes the role of zakat as a representation of Islamic social finance in increasing consumption and reducing poverty in Bahrain. In other countries, such as Tunisia and Pakistan, research by Bouanani & Belhadj (2020) and Zafar et al. (2021) explores how zakat contributes to alleviation in these two countries. ...
... In addition, most studies are conducted by focusing on one sector of Islamic finance and using a variety of research approaches. Abdelbaki (2013) concluded that Islamic social finance in the form of zakat was able to increase public consumption and reduce poverty by 0.7% in Bahrain from 1990 to 2010. In Tunisia, Bouanani & Belhadj (2020) found that zakat was able to reduce poverty by 52%. ...
... With the ZIS distribution scheme to the productive sector, in the long term mustahiq's income will increase and ultimately reduce the number of poor people. This finding is in line with previous research such as Abdelbaki (2013); Bouanani & Belhadj (2020); Choiriyah et al. (2020); Athoillah (2018);and Zafar et al. (2021). ...
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Purpose – This study aims to examine the effects of Islamic social finance, Islamic commercial finance, and the integration of Islamic social finance and Islamic commercial finance on poverty in Indonesia.Methodology – Data in the form of time series from 2002 to 2021 were evaluated using the Error Correction Model (ECM) approach. This method describes both long and short-term effects of Islamic social finance, Islamic commercial finance, and integration of Islamic social finance and Islamic commercial finance on poverty.Findings – The results show that Islamic social finance, Islamic commercial finance, and the integration between the two Islamic finance sectors have a significant negative effect on poverty rates in the long term. In the short term, the integration between Islamic social finance and Islamic commercial finance has a significant negative effect on the poverty rate, while Islamic social finance and Islamic commercial finance have a negative but not significant effect on the poverty rate.Implication – This study recommends policymakers make rules regarding the implementation of collaborative efforts on institutions in the two Islamic finance sectors in the future.Originality – Most of the studies that have been conducted have only focused on one sector of Islamic finance. In fact, the integration between Islamic social finance and Islamic commercial finance in Indonesia makes these two sectors of Islamic finance have the potential to reduce poverty higher than without integration.
... Poverty is a persistent and chronic socioeconomic issue (Dian Fitriarni et al., 2019). It indicates a low ability to meet needs like food, clothing, healthcare, and education (Abdelbaki, 2013); (Parisi, 2017). Income, consumption, and welfare are the three primary poverty indicators. ...
... This institution's development immediately enhances its contribution to economic growth (Suprayitno, 2020) and poverty alleviation (Choiriyah et al., 2020); (Abdelbaki, 2013); (Dwi Putri et al., 2020). The research result revealed zakat empowerment had proved less time for the poor to exit from poverty (Dian Fitriarni et al., 2019). ...
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This research aims to determine the effectiveness of the zakat fund distribution of Indonesia's zakat institutions in alleviating poverty. This study used secondary data from the zakat institution's annual reports and website information for 2022. The object of this research is only national zakat institutions that have issued annual reports and functional websites used as research objects. Among the 91 zakat institutions, only 14 national zakat institutions meet the requirements as research samples. The research used content analysis as the analysis method. The results of this study show that all zakat institutions have implemented programs to alleviate poverty effectively. This institution prioritizes consumption, social, health, and education programs. Only a few zakat institutions implement housing programs and house renovations which are also part of the basic needs because of the limited funds. Zakat institutions have provided additional expertise through skills and leadership training. Even zakat institutions have built a local economy. No zakat institution has developed a mustahiq network, creating an enterprise zone and regional investment. Due to data limitations, this research is only able to explain 14 national zakat institutions' management distribution which had published annual reports and other information on their websites. The government, muzaki, and, academics could use this research finding to support zakat institutions so that these institutions can increase their contribution to alleviating poverty. The government should pay attention to zakat institutions by building a regulatory framework that triggers the development of these institutions.
... In addition, the researcher provides a conclusion that zakat institutions can cooperate with other institutions such as microfinance to achieve its effectiveness. The same topic was also carried out by Abdelbaki (2013) who found that zakat eliminates poverty and inequality in Islamic countries, but this must also be supported by regulations and laws for collecting zakat from various sectors. Kasri (2016) in his research also proves that the zakat program in economic empowerment has succeeded in increasing the income and welfare of mustahik. ...
Conference Paper
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Zakat is increasingly important nowadays, especially during the covid-19 pandemic that created bigger demand for zakat and other charitable funds. Not only that, the covid-19 pandemic also accelerates the need for digitalization to support transaction processes-including in collecting and distributing zakat funds-in a safer and convenient way. However, few studies attempt to discuss the literature related to zakat and digitalization. This study fills in the gap by systematically reviewing literature related to zakat in digitalization. In analyzing the literature, it uses a qualitative research method as well as descriptive statistics and VOSviewer software in analysing the qualitative data. The study covers articles published in Mendeley and Scopus database journals during 2016-2021 period. The study highlights several interesting trends in relation to digital zakat literature. First, the main topics related to digital zakat are institutions, zakat collection and efficiency. Second, most of the studies related to digital zakat is published in 2016 and 2020, albeit there are high possibilities that more papers will come in 2021. Third, most studies related to digital zakat use qualitative research method. Fourth, Indonesia is dominating the research on digital zakat as most studies related to digital zakat are mostly discussed as case studies of Indonesia. Fifth, the subtopic mostly discussed within the digital zakat papers is marketing aspect of digital zakat. Sixth, the proportion of female and male authors are relatively the same. Finally, the citations of the papers are relatively still small albeit there is a high possibility that the number will significantly increase in the future. Overall, the study highlights the importance of digital zakat issue in Indonesia. This might be influenced by the fact that zakat potential in Indonesia is very high, while the actual collection is very low. Thus, digitalization of zakat is seen as an important strategy and solution' to solve the problem. In line with this, marketing aspect of digital zakat is also seen and found to be the most researched topic in the area. These results are expected to provide insight for all stakeholders of zakat in developing digital zakat in the future.
... Furthermore, it will remove the malpractices of the faulty and arbitrary recipient selection procedure. Publicity and campaigns regarding the knowledge on proper Zakat allocation are also supportive mechanisms of obliterating such practices (Abdelbaki, 2013;Noor Azman and Bidin, 2015). ...
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Purpose: A nationwide common malpractice in Zakat distribution has been prevailing in Bangladesh for the past few decades. The paper is a groundbreaking effort to investigate the perceptions of the Zakat payers about the common malpractices and to highlight whether any change in the conventional distribution of Zakat has occurred during the Covid-19 pandemic. The study also aims to extract the common perception of the Zakat payers regarding the validity of the changed practices during the pandemic. Design/methodology/approach: The study adopts the qualitative research approach allowing an in-depth interview technique based on an unstructured questionnaire schedule to obtain information from the Zakat payers, complemented by the key informant interview with the Islamic Scholars. The study obtained data from Zakat payers administering a purposive sampling technique based on two specified criteria. After coding the information on three main themes, content analysis is used to examine the results. Findings: The results reveal that although the Zakat payers dislike the common practices because of some antithetical issues, they still practice the same customs. Moreover, they apportion most of the value of Zakat in purchasing low-quality festive-motive clothes for the recipients. They are ignorant about Islamic law and the validity of such practices. According to scholars, these activities are not a pure system of Zakat provision and unable to alleviate poverty. Amid the Covid-19 pandemic, this practice shifted heavily to buying food items for the poor due to the financial hurdles they confronted during the pandemic. Although no solid argument is deduced from the participants about the exactitude of such distributional change, scholars regard the transformation as beneficial to the afflicted and the impoverished who have been hit by the pandemic, as well as not conflicting with the Zakat legislation. Practical implications: The study is a novel contribution to addressing the malpractice in Zakat distribution through receiving practical information from the Zakat payers, which will help produce more in-depth research in Islamic finance. Furthermore, this research will help the government and people raise awareness about the authentic practices of Zakat distribution according to the codes of Shari’ah. Originality/value: This study is a pioneering investigation since a scarcity of scholarly works attempted to identify the impact of Covid-19 on the practice of Zakat distribution and the associated perception regarding its Islamic jurisprudence. To the best of the authors’ knowledge, the investigation of common malpractices of Zakat is still unearthed by no former rigorous studies in the context of Bangladesh. The present study bridges this gap and paves a pragmatic research dimension in the Islamic finance.
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আমার নানা একজন সম্মানিত মাওলানা ছিলেন এবং অসুস্থ মা-কে কোনদিন দেখি নাই কোন সালাত কাযা করতে, তাই আমি পারিবারিক ভাবে সুন্নি মাজহাবের মানুষ। এই মাজহাবের কেউ আমার শত্রু নয়। তবে মহান আল্লাহ আমাকে যতটুকু জ্ঞান দিয়েছেন তা অপব্যবহার না করে, একজন একাডেমিক স্বীকৃত গবেষক হিসাবে নিরপেক্ষ দৃষ্টিভঙ্গি নিয়ে পবিত্র কুরআন নিয়ে চিন্তা ও গবেষণা করার চেষ্টা করি। সেই ক্ষেত্রে আমার চিন্তা, গবেষণা ও লেখায় ভুল থাকতে পারে, যা নিতান্ত-ই স্বাভাবিক। আশাকরি মহান আল্লাহ সেই ভুলের জন্য ক্ষমা করবেন এবং কারো দৃষ্টিতে কোন ভুল দেখা গেলে আমাকে অবহিত করা হলে (ইমেইল এর মাধ্যমে) আমি নিজেকে সংশোধন করে নিব এবং এই লেখাকে পুনঃসংস্করণ করব, ইনশাআল্লাহ (যদি বেঁচে থাকি) । জন্মের পর থেকেই শুনেছি ইসলামের পাঁচ স্তম্ভ অর্থাৎ কলেমা, নামাজ, রোজা, হজ্জ্ব ও যাকাত। জীবিকার জন্য যে শিক্ষা আমরা অর্জন করি তার ক্ষেত্রে আমরা যেভাবে পড়াশুনা করি, তেমন করে কোনদিন পবিত্র কুরআন পড়াশুনা করি নাই, তাই এই পাঁচ স্তম্ভ সহ সামগ্রিক পবিত্র কুরআন সম্পর্কে রয়েছে জ্ঞানের বিশাল শূন্যতা। ফলে এই শূন্যস্থান পূরণ করে দিচ্ছে আমাদের চিরশত্রু শয়তান এবং তার দলবল। ইসলামের এই পাঁচ স্তম্ভকে নিয়ে অধ্যায়ন করতে করতে তেমনিটি-ই অনুধাবন করছি, তাই এই প্রকাশনার উদ্দেশ্য হচ্ছে নিজেকে সংশোধন করার এবং খুব সহজে একজন মানুষ বুঝতে পারেন সেই ব্যবস্থা। প্রথমেই এই পাঁচ স্তম্ভের ধারণার সাথে কঠিন আপত্তি করছি অর্থাৎ ইসলামের স্তম্ভ পাঁচিটি নয়, তা কেবলমাত্র একটি তা হচ্ছে মহান আল্লাহর পবিত্র কুরআন। এই কিতাবের একটি শব্দ-কে অমান্যতো দূরের সন্দেহও করা যাবে না। তাই ইসলামের একমাত্র স্তম্ভ হচ্ছে পবিত্র কুরআন। যাই হউক বহুল প্রচলিত এই পাঁচ স্তম্ভের মধ্যে প্রথমেই আসে ঈমান। ঈমান আনার জন্য মুখে কলেমা পড়তে হয় এবং অন্তরে তা বিশ্বাস করতে এটা-ই প্রচলিত রীতিনীতি। এই নীতিতে পাঁচটি বর্তমানে আরো ২টি বেড়ে মোট সাতটি কলেমা এবং ২টি ঈমানের বাক্য রয়েছে, যা বিশ্বের বিখ্যাত ও অখ্যাত সকল ধর্ম প্রচারকগণ প্রচার করছেন এবং সেই অনুযায়ী-ই ভিন্ন ধর্মের মানুষকে মুসলিম হিসাবে স্বীকৃতি দিচ্ছে। এখানে প্রথম অধ্যায়: ঈমান, কলেমা ও ঈমানদার: পবিত্র কুরআনের আলোকে বিস্তারিত তুলে ধরা হয়েছে। মূল কথা হচ্ছে ৭টি বাক্য পবিত্র কুরআনের কোথাও তার যেমন কোন অস্তিত্ত্বতো নেই তেমনি তা পবিত্র কুরআনের নীতি বিরুদ্ধ, সাংঘর্ষিক এবং পবিত্র কুরআনের সাথে যুদ্ধ ঘোষণার সামিল। তাই আমি নিজে এই (৭+২) অর্থাৎ ৯টি বাক্যকে ইসলামের কলেমা ও ঈমান হিসাবে প্রত্যাখ্যান করলাম এবং ইসলামের বিশ্বজনীন কলেমা (২:১৩৬) ও (৩:৮৪) কে পাঠ করে পবিত্র কুরআনে উল্লেখিত সকল কলেমাকে-ই ঈমান ও জীবন হিসাবে মেনে নিলাম, মহান আল্লাহ যেন কবুল করেন। তাছাড়া আমি সেখানে যে ৫৩২টি আয়াতের কথা উল্লেখ করেছি, তাই শেষ কথা নয় অন্যের গবেষণায় তা তারতম্য হতে-ই পারে। প্রচলিত দ্বিতীয় স্তম্ভের যে নামাজ রয়েছে তা কখনও পবিত্র কুরআনে বর্ণিত সালাতের সাথে কোন সম্পর্ক নেই। মহান আল্লাহ পবিত্র কুরআনে কোথাও প্রত্যক্ষ বা পরোক্ষভাবে এভাবে পাঁচ বার ১৭ রাকাত বাধ্যতামূলক সালাতের বিধান দেন নাই। সালাত (নামায) শব্দটি পবিত্র কোরআনে সরাসরি ৮৯ টি আয়াতে ৯৬ বার, আর আলাদা আয়াতে তাহাজ্জুদ ১ বার, রূকু-সেজদা ১ বার, দন্ডায়মান ১ বার এবং তাসবীহ ৩ বার অর্থাৎ মোট ১০২ বার এসেছে। সেখানে ৯৫টির অধিক চলক রয়েছে এবং এই চলকের সমষ্টি-ই হচ্ছে সালাত আর সালাত কায়েম হচ্ছে ঐ সকল চলকগুলিকে বাস্তব জীবনে প্রয়োগ। তবে শারীরিক সালাতের যে বিবরণ উল্লেখ করেছেন তাতে সর্বনিম্ন রাকাত হচ্ছে একটি (১) যারা সালাত পড়বেন এবং যিনি পড়াবেন তার জন্য ২ রাকাত সুনির্দিষ্ট সালাতের সময়ে, তবে সর্বোচ্চ রাকাতের কোন সীমাবদ্ধতা মহান আল্লাহ নির্ধারণ করে দেন নাই। তাই প্রচলিত সালাতের বিধিবদ্ধ রীতিনীতি বর্জন করতে বাধ্য হয়েছি। আশা করি দ্বিতীয় অধ্যায়: "পবিত্র কুরআন অনুযায়ী সালাত (নামাজ) পদ্ধতি" গবেষণা প্রবন্ধটি নিরপেক্ষতা বজায় রেখে এবং মনযোগের সহিত পাঠ করলে সহজে-ই বুঝতে সক্ষম হবেন। তৃতীয় অধ্যায়: "যাকাতের প্রচলিত পদ্ধতি বনাম পবিত্র কোরআন: দাতা ও গ্রহীতার একটি আর্থ-সামাজিক মডেল" এই গবেষণা প্রবন্ধটি ৪০টি মুসলিম প্রধান দেশের সমসাময়িক তথ্য ও উপাত্ত সংগ্রহ করে বিশ্লেষণ করা হয়েছে। ফলাফলে দেখা গেল যে সকল দেশ-ই পবিত্র কুরআনের মূলনীতি বহির্ভুত পন্থায় যাকাতের বিধি-বিধান ও প্রথায় বিশ্বাসী। প্রচলিত পদ্ধতিতে যাকাতের ক্ষেত্রে রয়েছে সর্বনিম্ন পরিমান (নিসাব) ও হার ২.৫%। এই দুটি মৌলিক উপাদান, যার অস্তিত্ব পবিত্র কুরআনের কোথাও উল্লেখ নেই। তাছাড়া দেখা যাচ্ছে যে, যাকাতকে কেবলমাত্র অর্থনৈতিক বিবেচনায় সকল প্রকার ব্যবস্থাপনা তৈরি হয়েছে, অর্থাৎ সামাজিক দিকটি সম্পূর্ণভাবেই প্রত্যাখ্যান করা হয়েছে। আরো দেখা যায় যে, কিছু কিছু দেশ সরকারি ভাবে এই যাকাত আদায় করে এবং ব্যয় করা হয় পবিত্র কুরআনের অন-অনুমোদিত উপায়। উপরন্ত, বর্তমান মুসলিম বিশ্বে মাযহাবের দ্বন্ধে যুদ্ধের মত ধ্বংসাত্মক পথে জড়িত হয়ে গেলেও, যাকাতের ব্যাপারে এক মাযহাবের অনুসারী। এখানে উল্লেখ যে পবিত্র কুরআনের ফসল কাটার নীতি ও খুমুস (যা হচ্ছে লভ্যাংশের ১/৫) নীতি যাকাত গ্রহণকারী শ্রেণী চিহ্নিত করা হলেও, বাস্তবে যাকাত বা ভিন্ন কোন উপায়ে ঐ শ্রেণীর মধ্যে এই ধরণের কোন বন্টনের ব্যবস্থাও নেই। মূলত একাদশ শতাব্দী মতান্তরে অষ্টাদশ শতাব্দীর সংকলিত বিভিন্ন লাহওয়াল হাদিস থেকে যাকাতের বিধিবিধান প্রণয়ন করা হয়েছে। প্ৰচলিত চতুর্থ ও পঞ্চম স্তম্ভকে একই সাথে চতুর্থ অধ্যায়: হজ্জ্ব ও সিয়াম (রোজা): পবিত্র কুরআনের আলোকে এই শিরোনামে আলোচনা করা হয়েছে। পবিত্র কুরআন অনুযায়ী উভয় ক্ষেত্রে নির্ভরশীল চাঁদের উপর অর্থাৎ আল্লাহর নির্দেশিত দিন, মাস, ও বছর গণনা পদ্ধতির উপর কিন্তু বাস্তবে তার কোন অস্তিত্ত্ব নেই। ইসলামী বর্ষপঞ্চিটি সম্পূর্ণ আবেগতাড়িত যার সাথে পবিত্র কুরআনের কোন ধরণের সম্পৃক্ততা নেই। পবিত্র কুরআনে স্পষ্ট হজ্জের মাস সমূহের কথা উল্লেখ থাকলেও তা বাস্তবে নেই। হজ্জের সাথে সম্পৃক্ত সকল বিষয়গুলিকে বিভ্রান্তিকর অনুবাদ ও ব্যাখ্যা করা হয়েছে। ফলে হজ্জের মূলনীতি এবং উদ্দেশ্যকে অংকুরে-ই বিনষ্ট করেছে। পবিত্র কুরআন হজ্জ্বকে কোথাও কেবলমাত্র মুসলিমদের জন্য সীমাবদ্ধ রাখেন নাই বরং পৃথিবীর সকল মানুষকে আহ্ববানে করা হয়েছে। তাই হজ্জ্বকে মুসলিমদের জন্য ফরজ ইবাদত বলে একটি স্তম্ভ হিসাবে দাঁড় করিয়ে দেয়া পবিত্র কুরআন সম্পর্কে অজ্ঞতা ছাড়া আর কিছু নয়। সিয়াম (রোজা) যে হিসাবে মাসকে গণনা করা হয় তা বিভ্রান্তিকর এবং ইফতার ও সেহরির সময় সম্পর্কে লাহওয়াল হাদিস থেকে যে মতবাদ নেয়া হয়েছে তা সম্পূর্ণ পবিত্র কুরআন পরিপন্থী। পরিশেষে যে কথাটি দিয়ে শেষ করব তা হচ্ছে ইসলাম কোন পঞ্চ স্তম্ভের উপর নির্ভরশীল নয়। ইসলামের কেবলমাত্র একটি স্তম্ভ তা হচ্ছে পবিত্র কুরআন। মহান আল্লাহ পবিত্র কুরআনকে বিশ্বের সকল মানুষের জন্য পাঠ্য বই হিসাবে রচনা করে দিয়েছেন। অনেকবার আল্লাহ বলেছেন যারা জানে আর যারা জানে না তারা সমান নয়। অনেক আয়াতে বলেছেন যেখানে জ্ঞানীদের জন্য রয়েছে চিন্তার বিষয়। অর্থাৎ মহান আল্লাহ সকল মানুষকে একরকম মেধা শক্তি দেন নাই। তাই একজন কম মেধার মানুষকে প্রথমেই বলে দিলেন ঈমান আনার জন্য। এখন ঈমান অধ্যায় দেখলাম ঈমান রাখতে হলে ৫১টি চলক মেনে চলতে হবে। আর এই ৫১টি চলকের রয়েছে নিজস্ব চলক সমূহ, যেমন ঈমানদারকে সালাত কায়েম করতে হবে আর সালাতের পেয়েছি ৯৫টি চলক। বাকি ৫০টির সাথে এভাবেই চক্রটি গড়ে উঠে। আর এভাবেই একজন ঈমানদার পবিত্র কুরআনের একটি শব্দের বাইরে যেতে পারবেন না। তাই সম্পূর্ণ পবিত্র কুরআন হচ্ছে একটি মাত্র স্তম্ভ। ড. কাজী আব্দুল মান্নান আগষ্ট ২০২৩ Email:
This study examined motivational factors that influence Muzaki intention to pay zakat through Zakat Institutions. Paying zakat through Zakat Institutions will reduce poverty and increase economic growth. This research combines theory of intention revision and Signaling Theory. From those theories, this research utilized website quality, service quality, and Zakat Institutions performance which are suspected influence muzaki intention to pay. Purposive sampling was applied to obtain 100 qualified respondents that answered the questionnaires. The primary data were analyzed using a multiple regression model. Based on the research results, proposed hypotheses were accepted. Motivational reasons that contain website quality, service quality, and Zakat Institutions management performance have proven influence muzaki intention to pay zakat through Zakat Institutions. These research results suggest to Zakat Institutions and zakat authorities to give attention on motivational reasons variables. They should improve the role of each variable to attract muzaki intention to pay zakat
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This research aimed to study Islamic virtues underlying the reform and practice of the Chiang Mai Zakat (Bayt al-Māl) Fund to promote social justice in Muslim communities Chiang Mai Province, Thailand. Data were collected through in-depth interviews with its key figures including three advisors, three administrative members and one supporting staff. Non-participatory observation was also conducted on its activities between 2017 and 2018. The data were analyzed to find out about religious motivation and understandings behind the organizational reform and practice. Findings showed that three Islamic virtues of amānah, ikhlās and ukhūwah provided a guiding framework for the Chiang Mai Zakat (Bayt al-Māl) Fund in its effort to meet the social goal of the Islamic prescription of zakat and respond to needs of underprivileged Muslims. [Artikel ini membahas keutamaan nilai Islam pada konteks reformasi dan praktik dari rumah zakat Chiang Mai dalam mempromosikan keadilan sosial pada komunitas muslim di Provinsi Chiang Mai, Thailand. Data dikumpulkan melalui wawancara mendalam pada tokoh kunci lembaga seperti; penasehat, staf administrasi dan staf pembantu. Pengamatan lapangan dilakukan antara 2017-2018. Kesimpulan analisisnya menunjukkan bahwa pemahaman dan motivasi agama menjadi landasan praktik dan reformasi organisasi. Amanah, ikhlas dan ukhuwah merupakan tiga nilai yang menjadi kerangka panduan lembaga zakat Chiang Mai dalam mempertemukan nilai sosial wajib zakat dengan kelompok muslim yang kurang mampu secara ekonomi.]
Corporate Social Responsibility (CSR) is one of the indicators reflecting not only a firm financial performance but also their connection to the stakeholders. This study will analyse the CSR disclosure between two Islamic Banks in MENA Countries; Boubyan Bank from Kuwait and Ithmaar Bank, a Bahrain origin. By employing a mixed qualitative-quantitative method, the paper will contrast both financial reports for 5 consecutive years (2011-2015), and utilise CAMEL rating, as the indicators for financial performance. Furthermore, the data will be analysed intensely using Belal, et al (2015) CSR index. For the non-financial performance, a deeper analysis of the Chairman’s statement will be conducted through text analysis software (DICTION and LIWC). The result showed a consistent output, between financial and non-financial performance, for both banks. Boubyan Bank performed better in terms of financial state, and in addition, avoided impression management procedure. In contrast, Ithmaar Bank indicated the opposite result.
Technical Report
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This, the first full-scale World Bank Public Expenditure Review for Armenia, reviews the main fiscal trends in Armenia for the period of 1997-2001 and develops recommendations with respect to further fiscal adjustment, expenditure prioritization, and budget consolidation. The analysis focuses on the following core issues: sustainability of fiscal adjustment, fiscal transparency, expenditure priorities, and short-term expenditure management given the existing economy-wide institutional constraints. This study covers extra-budgetary funds, in-kind external grants, subsidies provided by the state-owned companies in the energy and utility sectors, and operations of the Social Insurance Fund, as well as regular budgetary spending. It suggests a medium-term action plan to address identified weaknesses. Sectoral chapters review health, education, and social protection and insurance. The report also analyzes budget support for core public infrastructure, and Armenia's public investment program. World Bank Country Studies are available individually or by subscription, both in print and on-line.
This article attempts to shed new light on the political and distributional impact of Egyptian food subsidies.3 It is divided as follows. To provide a broader context, Section II presents an overview of the role of food subsidies in developing countries. Section III briefly reviews the history and operation of the food subsidy system in Egypt, paying particular attention to the key role of bread. Section IV presents details from a new 1997 household budget survey in Egypt. This survey, which collected heretofore unavailable expenditure data on each type of subsidized food in Egypt, makes it possible to pinpoint the current distributional impact of food subsidies. Sections V and VI use these new survey data to analyze the impact of each subsidized food on different income groups in urban and rural areas. Section VII presents some possible options for reforming Egyptian food subsidies, and Section VIII presents conclusions.
This paper relates quality and uncertainty. The existence of goods of many grades poses interesting and important problems for the theory of markets. On the one hand, the interaction of quality differences and uncertainty may explain important institutions of the labor market. On the other hand, this paper presents a struggling attempt to give structure to the statement: “Business in under-developed countries is difficult”; in particular, a structure is given for determining the economic costs of dishonesty. Additional applications of the theory include comments on the structure of money markets, on the notion of “insurability,” on the liquidity of durables, and on brand-name goods.
the new international system before and after Gulf war, Dar of new culture, Cairo
  • A Sharaf
Sharaf, A, 1992, the new international system before and after Gulf war, Dar of new culture, Cairo, pp. 13 -29.
Failure of the Traditional Financial Markets and Financial and Economic Crises from the Islamic Perspective
  • H Abdelbaki
Abdelbaki, H., 2012, Failure of the Traditional Financial Markets and Financial and Economic Crises from the Islamic Perspective, Journal of Al Nahdah, Vol. 13 (3), Egypt.
The new international system and its impact on middle east region, journal of middle eastern paper
  • S Fawzy
Fawzy, S., 1993, The new international system and its impact on middle east region, journal of middle eastern paper, Cairo, p. 80.