Habibullah

20190730049

Persuasive Paragraph

The economic impact of zakat on poverty reduction

Zakat, which is a form of action that is obligatory for all Muslims, serves
as a powerful mechanism for reducing poverty and redistributing wealth,
thereby significantly improving social welfare. By requiring Muslims to donate
a portion of their excess wealth to those in need, zakat directly addresses the
financial difficulties of the poor, and provides them with vital resources. Zakat
not only meets the urgent needs of underprivileged communities but also
stimulates the local economy, empowers communities through investment in
education and small businesses, and ultimately contributes to economic stability
and growth.

The main benefit of zakat is that it can be a direct solution to solving the
problem of poverty by meeting the financial needs of poor people. Zakat funds
are distributed to those who are struggling, providing the means to obtain basic
needs such as food, clothing, and shelter. This rapid financial support is critical
to ensuring that the basic needs of the poor are met, which will ultimately
improve their quality of life. Mohammad Abdullah, “Zakat is a lifeline for the
poor, providing them with essential resources to survive and develop”
(Abdullah, 2020). By meeting these urgent needs, zakat helps reduce severe
poverty rates and improve overall social welfare.
 Apart from meeting basic needs, zakat also plays an important role in
stimulating and reviving the regional economy. When zakat recipients use these
funds to purchase goods and services, they contribute to increased demand in
the local economy. This increased demand can open up more business
opportunities and job creation, thereby encouraging economic growth. For
example, in countries with effective zakat systems, there is a marked increase in
economic activity in poor areas. In this way, zakat not only provides direct
financial assistance but also acts as a catalyst for economic development.

In addition, zakat helps underprivileged communities by enabling

investment in education and small businesses. By providing funds for education,
zakat helps individuals acquire the skills and knowledge needed to gain
employment opportunities and improve better skills. Zakat funds can also be
used to start small businesses, providing a sustainable source of income for poor
families. This empowerment helps break the cycle of poverty and promotes
long-term economic independence. There is research conducted by the
International Journal of Islamic Economics which reveals that “efficient zakat
management can lead to substantial economic benefits for local communities by
boosting consumption and production activities” (IJIE, 2021). In essence, zakat
not only provides direct assistance to those in need, but also encourages
sustainable development and independence among poor communities. However,
recently there have been widespread mistakes made by zakat recipients or those
who receive zakat are not on target, so it is necessary to conduct a direct survey
to review the eligibility of zakat recipients.
 Zakat is a powerful tool for alleviating poverty, redistributing wealth, and
increasing social welfare. By meeting the urgent financial needs of poor
communities, stimulating local economies, and empowering communities
through education and entrepreneurship, zakat makes a significant contribution
to economic stability and growth. Evidence from various countries underscores
the effectiveness of zakat as a poverty alleviation strategy. Therefore, by
implementing and managing the zakat system efficiently, society can achieve
greater economic stability and improve the status of underprivileged
communities.

References

Abdullah, M. (2020). The Role of Zakat in Poverty Alleviation. Islamic Relief.

International Journal of Islamic Economics (IJIE). (2021). Economic Impact of

Zakat in Local Communities.