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Can 'Zakat' Stand Alone To Alleviate Poverty?

By Greget Kalla Buana

January 6, 2017

Understanding poverty is the first step toward poverty alleviation. Various perspectives of the concept of poverty are often raised by economists.

Those perspectives then lead to differing opinions about poverty and the solutions to be offered. Sen (1983) argues that the dispute on the absolute versus the relative conceptualization of poverty can be better resolved by being more explicit about the particular space (e.g., commodities, incomes or capabilities) in which the concept is to be based.

He states that while poverty may be seen as a failure to reach some absolute level of capability, the issue of inequality of capabilities is an important one in its own right for public policy.

According to the World Bank, as differences in the cost of living across the world evolved, the global poverty line has risen from US$1.25 in 2008 to $1.90 since October 2015. Such a good example of perceiving the definition of poverty in monetary terms reflects the disparity in individuals’ incomes and capabilities.

Poverty has thus been associated with low income in absolute terms, low income in relation to meeting physical needs and an insufficiency of basic needs (Sadeq, 1997) as those changeable World Bank amounts only cover the costs of basic food, clothing and shelter.

Inequality of capabilities goes beyond that. Sen, in Poverty and Famines (1981) contributes to the understanding and measurement of poverty and demonstrates the involvement of moral ethics, philosophy, and the meaning of development. He explains that the cause of poverty is about accessibility (political freedom, economic opportunity, social opportunities, education, health, transparency, as well as social safety nets).

Lack of access or limited choice has an impact on how a man behaves. Individuals are forced to do what they are asked to do, not what they should do. Such conditions lead to delays in growth potential and mutual prosperity (community and family) lessens, thus it does not enhance solidarity and social cohesiveness. Ringen (1994) in reviewing Sen’s work agrees that equality of opportunity is a good concept. He suggests taking it over and giving it a proper meaning.

Hence, the meaning of poverty should be defined before deciding strategy. Among many perspectives, the moral issue of poverty derives from religious aspects. Islam defines poverty as a state whereby an individual fails to fulfil any of the five basic human requirements of life: (a) religion, (b) physical self, (c) intellect or knowledge, (d) offspring and (e) wealth (Hassan, 2010).

The idea of an exclusive right to natural resources by a single human being is not accepted according to the Quran. People may then ask why some are superior in wealth to others.

The existence of both poor and rich is a social construction in order to establish cooperation and develop a sense of brotherhood.

The aim is to reduce social and economic inequality as the determinant of poverty, which here means that poverty is a multidimensional economic phenomenon that cannot be alleviated only through income redistribution, but needs to include a holistic approach (Hasan, 2010; Kaleem and Ahmed, 2010; Nadzri et al., 2012).

This is where the role of the moral economy takes place. The government, as the country’s regulator, may be successful in reducing poverty by providing financial assistance aimed at consumption, but it does not expand access to self-actualization. It is politically correct, yet ethically incorrect. All the above-mentioned definitions emphasize two things to eradicate poverty: equality and capability.

As evidenced by historical facts, Zakat (alms) is supposed to have an effect on the transformation of Mustahiq (the recipient) to Muzakki (the giver). Zakat is capable of eliminating poverty, as happened during the reigns of Umar bin Al Khattab and Umar bin Abdul Aziz, when it was hard to find an eligible recipient of Zakat.

Redistribution of assets in a fair manner by restructuring organization, cutting out bureaucracy, simplifying the administration system, saving the state budget and, at the same time, socializing business and entrepreneurial spirit in the community, affects productivity.

By these means, Umar enlarged the sources of national income through Zakat, tax and Jizya. The zero poverty rate at that time was caused by the absence of Mustahiq, not by the amount of Zakat exceeding the number of Mustahiq.

In the other words, everybody was Muzakki. The ability to pay Zakat appears when productivity rises. This paradigm is in line with Sen’s thoughts regarding the meaning of poverty. When individuals become productive and have access to basic rights, the ability and willingness to pay Zakat will emerge, as well as solidarity and social cohesiveness.

Not vice versa, as assumed; when poverty increases, then Zakat is a solution. How can it be the solution if the amount of Zakat is not proportional to the number of poor? Thus, Zakat cannot stand alone in alleviating poverty.

Contrary to the poverty alleviation schemes proposed by Sadeq (1997), which placed Zakat as a corrective measure, he points out that the corrective measure in poverty eradication schemes in Islam are compulsory transfer (Zakat), recommended transfer (charity) and state responsibility. Zakat should not be perceived as a corrective measure to reduce poverty, but as a positive measure, as Zakat is obligatory for every Muslim.

As a consequence of giving Zakat, there are spiritual dynamics involved in which those who pay Zakat are enhanced spiritually, and, at the worldly level, their wealth is cleansed, then Barakah (grace) descends on both the giver and receiver (Ali and Hatta, 2014). Zakat cleanses the heart and the property of Muzakki (Q.S. At-Taubah (9): 103). Morally, Zakat promotes the sharing of wealth and eliminates greed, while socially it helps to reduce poverty within the community (Gambling and Karim, 1986; Sulaiman, 2003).

At this point, paying Zakat is perceived as obligatory to help drive the economy, but not to solve the problem of poverty. It needs another scheme or second layer to broaden access for individuals to achieve equality in capabilities. In the concept of distribution, determination of the object of the eight Zakat recipients actually means that Zakat is a form of cross-direct subsidy.

Zakat must empower the communities with low purchasing power. Increasing purchasing power will stimulate demand and further encourage increased supply.

With increasing public consumption, production will increase. Zakat is not the only alms-giving method in Islam. Thus, in this era, we need to look for another solution on which to collaborate.