onomic c s & f E o M Arif, Int J Econ Manag Sci 2017, 6:6 l a a n n a r g u e DOI: 10.4172/2162-6359.1000473 o m J International Journal of Economics & e l n a t n S o i c t i a ISSN: 2162-6359 e n n r c e t e s n I Management Sciences Research Article Open Access Research Article Open Access Zakat as a Mode of Poverty Alleviation Muhammad Arif* National college of Business Administration and Economics, Bahawalpur Sub-Campus, Pakistan Abstract Poverty has been an issue of extreme vetting since the dawn of humanity and is currently battering the Muslim World severely with stats indicating that Muslims are only 23% of world’s population but have a share of 50% in global poverty. This is quite baffling and perplexing fact as Muslims have been bestowed with an economic system designed by Almighty ALLAH which surely is good enough to eradicate poverty but improper implementation has hurt Muslim World direly. Zakat is an essential component of Islamic Economic System which bounds rich people to transfer 2.5% of their wealth to poor people of society and through proper implementation of Zakat system poverty got completely eradicated during era of Hazrat Umer e Farooq (R.A.). Zakat system has been subject to several modifications as a result of prolonged western domination and rise of secularist views, recent studies have suggested several models of zakat implementation that can rejuvenate the past success but have failed to do so, due to lack of clear path and refusal to build a zakat system on the basis of fundamental principles taught by Holy Prophet (Peace Be Upon Him) considering them obsolete. This study intends to systematically identify the root causes behind the faltering performance of zakat system and try to eliminate them by designing a system that is based upon the fundamental principles as guided by Holy Prophet (Peace Be Upon Him) as well as in line with current economic dynamics. Another important objective of this study is to have a uniform zakat system throughout the Muslim World so that real benefits of zakat can be enjoyed and whole Muslim World may prosper. Keywords: Economic system; Had al Kifaya; Mosque; Secularism; giving the Zakat-Charity, fasting Ramadan, and performing Hajj if one Poverty; Zakat; Zakat system is able” (Muslim) Poverty and its Dynamics The denotative meaning of Zakat is to Purify and increase [7,8]; “Faizan e Zakat” [9-12]. The main undisputed objective of zakat is to In literal terms Poverty means “state of being extremely poor achieve socio-economic justice in society; in simple words Zakat is and the state of being inferior in quality or insufficient in amount”, the transfer of certain portion of a person’s wealth to those who don’t it has been derived from old French word “poverte” and Latin word possess much wealth as per Shariah Laws. ALLAH orders the collection “paupertas” from “pauper” meaning poor. There have been several of zakat in Quran as, multi-dimensional definitions of poverty [1]. In 1998 United Nations defined Poverty as “Violation of human dignity where humans are “Take alms out of their wealth, so that thou mayest cleanse them and denied of having choices and opportunities”. World Bank defined purify them therby.”(Al-Taubah, 103) poverty “as someone being destitute of well-being, which encompasses Poverty as discussed earlier has been a problem since the start of various issues namely low income, lack of access to basic living facilities, humanity [13], to solve this problem ALLAH gave us the religion Islam malnutrition, lack of education and mental stress”. Smelser and Baltes defined poverty as a condition when a family is unable to meet a state which is a complete code of conduct for life. Islam gives us solution defined income threshold. Internationally any family $1.90 as per for every problem of life however here we will discuss the mechanism World Bank is termed as extremely poor. As per World Bank statistics, of Zakat that has been bestowed upon us so that we can have spiritual 16% of world Population concentrated in High Income countries are gains as well as socio-economic gains i.e. alleviation of poverty the owners of 55% of world income, Low income countries that account [14]. Philosophy of Islam is that everything present in this world is for 72% of World Population just generate 1% of global Income. ownership of ALLAH and humans are just vicegerents of God, as Holy Poverty is caused by several reasons which affect all people equally, Quran says: more than half of poor people are Muslims, whom constitute 23% of “He it is Who created for you all that is in the earth…” (Al Baqarah, 30) world population and own majority of Energy and natural resources of world although Islam has given a very practical framework regarding It’s duty of humans to use the available resources in just manner so economic system, so this statistic about poverty is very baffling, and that no one is worse off. ALLAH has said in Holy Quran that, the sole reason behind this is Muslim countries are not following Islam properly [2], Major reasons of Poverty are i) Deviation from Islamic Principles ii) Usury Based Economy iii) Economic Inequality iv) *Corresponding author: Muhammad Arif, National college of Business Corruption v) Lack of Education vi) Adverse Government Policies vii) Administration and Economics, Bahawalpur Sub-Campus, Pakistan, Tel: Lack of Social and Moral Values vii) Low Morale of Poor [3-6]. +923136626216; E-mail: [email protected] Received October 05, 2017; Accepted October 23, 2017; Published October 24, Zakat in Islam 2017 Islam is a complete code of conduct for life and the five pillars of Citation: Arif M (2017) Zakat as a Mode of Poverty Alleviation. Int J Econ Manag Islam as discussed by Prophet MUHAMMAD (Peace Be upon Him) Sci 6: 473. doi: 10.4172/2162-6359.1000473 are as follows: Copyright: © 2017 Arif M. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted “Islam is built on five (pillars): Testification that there is no God but use, distribution, and reproduction in any medium, provided the original author and Allah, and Muhammad is His Messenger, performing the Salah-Prayers, source are credited. Int J Econ Manag Sci, an open access journal Volume 6 • Issue 6 • 1000473 ISSN: 2162-6359 Citation: Arif M (2017) Zakat as a Mode of Poverty Alleviation. Int J Econ Manag Sci 6: 473. doi: 10.4172/2162-6359.1000473 Page 2 of 6 “And Allah has favored some of you above others in worldly gifts. important relating to zakat as he made several modifications to system But those more favored will not restore any part of their worldly gifts to of zakat through Ijtihad to coup with changing economics of society. those whom their right hands possess, so that they may be equal sharers His reign was from 634-644 A.D., he set up the institution of Bait ul in them. Will they then deny the favor of Allah?” (An-Nahl, 72) Mal or State Treasury for the management of Zakat funds. He also conducted Ijtihad and excluded category of Muallafa tul quloob (Those From above verse it is clear that worldly gains are just blessings whose hearts had to be won) from eligible recipients of zakat as he of ALLAH as well as a test of one’s character, similarly Poverty is also thought that Islam has now consolidated its position and new comers from ALLAH as a test of one’s character, to be successful in the test the to Islam don’t face the hostilities that were used to face during early rich will have to take care of poor segment of society through Zakat, days of Islam. charity etc. and poor should not lose hope and he should try to elevate his status through lawful means. The Era of third Caliph Hazrat Usman (R.A.) lasted from 644-655 AD, during his time the dynamics of economy further evolved and to Implementation of Zakat and Impact on Poverty keep up with changing dynamics he divided property in to two types Zakat has been a successful tool for the reduction or even complete i.e. Visible Property (Amwal al-zahiriah) and Non-Visible Property eradication of poverty as during the time (13-22H) of second Caliph of (Amwal al-Batinah), he made Zakat on Visible property compulsory to Islam Hazrat Umar Bin Khattab (R.A) and during time (99-101H) of be paid through state institutions and zakat on in-visible properties was Umer bin Abdul Aziz, the condition of people during that time was so left on individual’s desire [22]. prosperous that there was no eligible recipient of Zakat [15,16]. It is a After caliphate the major period in terms of zakat management was proven fact from history that if properly managed Zakat can be a mode the period of Umayyah Government headed by Umar bin Abdul Aziz, to alleviate poverty [17]. he restored original system of Amils with Governor of each province Implementation stage for any devised model is very critical to working as Amil, at that time the system of zakat along with Islamic its success; flawlessly designed models flop due to their improper economics was so strong that the Governor of Egypt once asked Umar execution, similar is the case with Zakat, and no doubt the model of bin Abdul Aziz that What to do with Zakat funds as he is not able to Zakat is flawlessly devised and taught to humanity by ALLAH through find any eligible people who can receive zakat.