Effects of Spiritual Capital on Muslim Economy: The Case of Malaysia

Abstract

This paper examines how spiritual capital can influence peoples' economy. It focuses on how coming together of Malay based on their Islamic believe has projected the economy of once despised set of people to a nation the world are looking up to champion the Islamic economic renaissance in the world. The study looked at three Islamic institutions in Malaysia that have both direct and indirect effects on the economy of Malay as Muslims and the overall effect on the Malaysia in general. The institutions studied are Islamic financial institutions, the Zakat institutions and the Waqaf institutions in Malaysia. The institutions were examined based on ACT(s) established them, what have been achieved through these institutions by the Malay specifically and Malaysia in general. It was found that these institutions have positive contributions to micro and macro economy of the country such as savings, consumptions, investment, growth and poverty alleviation.

Keyword: Spiritual capital, Malay Muslims, Zakat, Waqaf, Islamic finance.