Potential of Zakat in Eliminating Riba and Eradicating Poverty in Muslim Countries

Abstract

From a mere glance at Muslim countries today, we realize that they are classified as third world countries even though they adopt a secular system. The recent statistical data of 2009 shows the majority of people who live below poverty are found in Muslim countries. Some scholars related this fact to the oppression, humiliation and the bad policies which had been imposed in almost all Muslim countries during colonization and have continued up to the present time.  Others related this to the incompetence and the corruption on the part of their governments. We cannot deny the above mentioned reasons as the catalyst for the spread of poverty in the Islamic world. However, we also believe that the main reason is imbued within Muslims themselves since they neglected almost all their Islamic institutions, including the institution of zakat which is meant to eliminate riba and eradicate poverty in their societies. Hence, we believe that ignoring the teaching of Islam it the key factor for the wide spread of poverty in the Islamic world as they have forgotten the advice of the Prophet (pbuh) in his saying“…I have left two things behind me for you (the Ummah). You will never go astray as long as you follow these two things. One of these two things is Allah’s Holy Book (the Quran al-Kareem) and the other is the Sunnah of his Most Beloved Prophet (pbuh)” Muwatta Imam Malik.

ProblemStatement: For almost one century the institution of zakat has been neglected in almost all Muslim countries since its administration has been decentralized and its dues become voluntary depending on the piety of the individual.  The problem now is how to revive and bring back this institution, within the current system, in order to resume its role in eliminating riba and eradicating poverty in the Islamic world.

Objective: The main objective of this paper is to show how Malaysia succeeded in reviving and bringing back the institution of zakah within their current system, i.e. through salary deduction scheme.  A scheme which encourages the author not only to look at the potential of zakat in eliminating riba and eradicating poverty but to provide statistical date supporting the huge amount of money that can be collected in the different Muslim countries from this institution to overcome their problems.

Research Methodology: This paper uses both primary and secondary source. Data collected from primary source include text from the Quran and hadith from the Sunnah of the Prophet (pbuh), while data collected from secondary source includes books, articles, journals, annual reports, besides websites and e-books.

Expected Findings: The expected findings of this paper are to provide guidance for Muslim countries to revive the role of the institution of zakat according to the teaching of Islam on one hand, and on the other to provide statistical evidence showing the huge amount of money that can be collected as zakat if they follow the current practice of salary deduction scheme of Malaysia.

Key words: zakat, salary, deduction, riba, poverty.