HISTORICALLY, zakat and waqaf had contributed greatly to the advancement of knowledge, the establishment of hospitals, orphanages, universities and led to great civilisations.

It held a central role in Islamic financial policy. During the Umayyad and Abbasid eras, there was evidence of economic growth as a result of optimum management of zakat.

It is one of the largest forms of wealth transfer to the poor and needy and is the source of Islamic society economic strength and is interest-free.

During the Umar bin Abdul Aziz’s leadership for 30 months, no records of poor people could be found. The distribution of zakat then was consumable and productive activities.

Later, it was relegated to just alms for the poor.

Zakat can serve as a balance between supply and demand in the micro-economic sector and help address the problem of poverty through the creation of purchasing power and the development of an entrepreneurial community.

In Malaysia, zakat distribution has a positive, but small impact on aggregate consumption. It should cover other forms of monetary aid that can generate a continuous flow of income for recipients.

Recently, there are improvements in the form of business capital, business tools, business financing and working salary.

When managed properly, zakat has the potential to help achieve national development goals ie, economic empowerment.

In Indonesia, the UNDP began harnessing it for sustainable development goals (SDG) projects by partnering with Baznas, the national zakat collection body. The latest is a partnership to support Covid-19 economic recovery.

The potential size of the annual zakat pool was estimated between US$200 billion (RM8.16 billion) and US$1 trillion by the World Bank and IDBG in 2016.

The aggregate resources pooled together from the potential zakat collection in 17 OIC countries will be enough to fund resources for poverty alleviation in all those countries combined.

According to Yusuf Qardhawi, zakat makes a fair contribution to social and economic stability, for the present needs of the poor and needy, and serving other functions that profoundly contribute to social life in a broad sense of social justice.

Besides providing for shelter, food, clothing, medication, education and transportation, we need to empower the beneficiaries (asnaf).

Empowerment is not enough with just giving money but it includes mentoring and strengthening self-confidence.

However, because of some bureaucratic processes, many have given up and looked for solutions elsewhere with catastrophic consequences.

There have been some improvements but there are still more rooms.

Zakat institutions need to be expanded and enhanced to build a new dimension, especially in the distribution of zakat, so that it becomes a competitive institution locally or even globally.

Effectiveness of zakat management relates to the distribution mechanism, the quality and professionalism of the administrator and transparency in the governance and the institution itself.

The latest report, in the Pusat Pungutan Zakat (PPZ) website is for 2018. While sum collected is shown, how much was distributed through the various schemes is not reported.

Further, zakat is administrated by the Islamic Religious Council (IRC) in every state and is responsible for determining the asnaf qualification and the type of relief.

Each state has its own strategies and mission. There are so many duplications and it is unwise.

We are used to the traditional interpretations and we now need contemporary Islamic perspectives.

Even for Muallaf (one of the asnaf), there are many interpretations. Can we now have a new discourse on zakat management? Should we then have only one zakat management instead of at each state?

We need the concurrence of the Conference of Rulers to save time, efforts, manpower and reduce duplication. There will be more money available, which can be distributed and a standard comprehensive priority assessment system introduced.

“Indeed, the wasteful are brothers of the devils, and ever has Satan been to his Lord ungrateful” (Quran Al-Isra 17:27).

The principle of sustainability includes active participation of all sections of the community in all aspects and creating an ecosystem that will benefit all participants.

Invite large and successful Muslim businesses, universities, top motivational speakers and business coaches to assist.

All the states must co-operate. Example, Selangor can provide a piece of land for asnaf in Klang Valley for other states to carry out business activities in a central location.

It has to be high value-add, high gross margin projects and synergistic, where economies of scale can be achieved. It can be a self-contained township that could, with proper planning and sincere efforts, later transform into an industrial and/or technological hub.

There needs to be proper planning, implementation, monitoring and periodic assessment. Management of this location will be selected from the present crop of administrators and guided by successful personalities to upgrade managerial and financial literacy.

I am very sure there are many who are willing to help. Where necessary, get assistance from international bodies like UNDP.

Between 2015 and 2020, KL (PPZ) and Lembaga Zakat Selangor collected more than RM8 billion and nationwide, the figure is much more.

Lembaga Tabung Haji is a success except for certain hiccups, let us be more focused and improve on accountability to make the zakat institution a success in achieving social and economic stability.

What say you…? – March 30, 2021.

* Saleh Mohammed reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.