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Thursday, 16 August 2012
Contribution of Zakat to national economy stressed
'Zakat' could contribute to the country's annual development programme (ADP) by alleviating poverty and propelling the nation.
Dr Kabir Hasan, professor of New Orleans University of USA, made the observation during an interview arranged by the Centre for Zakat Management (CZM) in the city recently.
The CZM, initiated by Rahimafrooz Industrial Group, has been working with an Islamic model characterised by institutional management of Zakat for poverty alleviation since 2008.
"If Zakat fund is collected and managed properly, it can be used to create a pull of funds, which can be used in financing development activities and can replace government expenditures," Dr Kabir Hasan mentioned.
"In Bangladesh, Zakat funds could have contributed up to 21 per cent (Tk 30,683 million) of ADP in 1983-1984 and up to 43 per cent (Tk 220,000 million) in 2004-2005," according to Prof Hasan.
"In the developing countries such as Bangladesh, foreign aid from donors contributes a significant portion of the development budget. If Zakat funds are properly managed, the funds could replace foreign aid and therefore significantly reduce the debt burden," said the development management researcher.
Replying to a query, he said an Islamic approach to poverty alleviation would ideally involve a holistic approach including a set of anti-poverty measures such as increasing income level with pro-poor programmes, achieving an equitable distribution of income and providing equal opportunities for all social segments.
About the role of state in Zakat collection and disbursement, Prof Hasan said although in early Islamic states, Zakat funds were collected and managed by the state, Zakat management has gone through historical challenges after the extinction of early Islamic states.
After the colonial era, a few Muslim countries such as Yemen, Saudi Arabia, Libya, Sudan, Pakistan and Malaysia have opted for mandatory Zakat management through government, he said, adding other countries such as Bangladesh, Egypt, Jordan, Kuwait, Iran, Bahrain and Iraq have formed specialised state institutions but participation of public is made voluntary.
He, however, stressed the need for designing Islamic Micro-Finance Institution by incorporating the two basic and traditional institution of Islam-the Awqaf and the Zakat.
(Financial Express / 16 August 2012)
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com