No other form of poverty reduction has the inherent strengths of the zakat system because it is not based on charging interest. It is given away completely selflessly to the poor with the givers expecting no returns; the receivers, therefore, are only benefited and not in the least exploited

Absence of Zakat in poverty alleviation strategies of Bangladesh

Notwithstanding bewildering advances in science and technology, explosion in the supply of consumer goods and higher standards of living enjoyed by ever greater number of people, global poverty remains roughly in the same formidable form.
There are more people in planet earth today like never before in human history. The planet’s population is estimated to be 7 billion. But out of this number, one-seventh or 1 billion people are living on less than $ 1 a day or in extreme poverty. Another 2.3 billion are living on less than $ 2 a day. Thus, these two groups or 3.3 billion people or over 47 per cent of the global population live in poverty or extreme poverty.
This global face of poverty is manifest sharply or symbolically in the present great imbalance in Bangladesh society. A great mass of its people who form 40 per cent of its population or 60 million out of its over 160 million people are obliged to live on the equivalent of less than $ 2 per day.
But for these Bangladeshi poor and also all other poverty afflicted people all over the world, an escape from their poverty conditions is possible by embracing the correct Islamic way for doing the same. The critics may say that what was ordained fourteen hundred years ago in Islam must have become redundant in the twenty-first century.
But the great success of the Islamic model of poverty alleviation through zakat in Malaysia and elsewhere, provide solid proofs of the high relevance, utility and applicability of this Islamic principle.
There are different competing models of poverty alleviation nowadays. The one developed in Bangladesh by Nobel Laureate Professor Yunus, has caught the attention of the world. Indeed, he is rightly regarded for his contribution in helping a great many number of the poorest in Bangladesh society to see better days,  to be better off or less poor through his Grameen Bank.
But uncared for by our policymakers or planners, there is awaiting a model that was introduced fourteen centuries ago by Islam which promises to deliver all of mankind from the pangs of poverty and that too in a sustainable manner at the fastest. This is our compulsory Islamic system for giving Zakat (charity) by the rich to the poor the great potentials of which remain scantily explored.
Only those in Bangladesh, its people with surplus resources, they need to be motivated about their religious duty. And the government must be willing and able to receive zakat monies from these affluent people and organizations regularly under a centralized fund and more importantly, utilize them systematically and progressively in different fields to lift people out of poverty without their relapsing back again into poverty.
The government, if it takes up such responsibility, must carry it out with efficiency and scrupulousness to go on attracting the zakat funds from people.
In other words, what I am proposing is that zakat should gradually graduate to an institutional level with the government spearheading zakat activities. Presently, zakat is mainly scattered individual activities of alms giving with little effect on truly longer term poverty alleviation.
However, if zakat money is pooled together ‘centrally’ and a big amount is mobilized on a regular annual basis, then the collecting authority can attempt to undertake large projects for the poor with such monies. For example, schools can be set up with a goal of establishing so many of them within a timeframe and run them for the educational benefits of the poor with the pupils paying no fees or very nominal fees and charges.
Similarly, hospitals or clinics can be set up more and more by such an authority with the objective of bringing an ever bigger number of the poor under proper medical care free of costs or at nominal costs for them.
The greatest contribution of such a centralized authority can be towards building skill training centres or vocational education centres for the poor . A poor person enabled to so train himself or herself up and start earning a livelihood, will soon cease to have any need for charity. In fact such a zakat receiver can expect to become a zakat giver some day and this is a very realistic possibility.
A poor person once approached Prophet Mohammad (SM) for alms. The Prophet gave him some cash but advised him to buy an axe and start cutting firewood with it and sell the same in the market. The man carried out the Prophet’s instruction and remained not in poverty or in need of charitable help. The suggestion here is very simple : help the poor to help themselves and extend this help institutionally and systematically through a centralized authority instead of individual disparate acts of charities.
I noted with disgust the news that 27 persons  died from a stampede on Friday that started for zakat clothes in front of a rich man’s house in Mymenshing. Such incidents though on a far lesser scale occur time and again in this country. But how much preferable it would be if that rich man’s monies earmarked for buying zakat clothes could go to an efficient and centralized zakat administering authority created to build progressively all kinds of assets of the sort, mentioned above, to gradually help the poor and bring them out of poverty and its consequences on a lasting basis.
Statistics from dependable sources say that Bangladesh today is not short of individuals whose generous and continuing participation in zakat activities can make so much of a positive difference in rapidly alleviating poverty. For example, the Bangladesh Information Notifier informs that the top nine richest Bangladeshis have each some 715 billion taka or more in bank accounts. This estimate does not include the thousands of other billionaires down the line with their many billions as well in bank accounts. But many of them would probably want to pay their zakat in right proportion as religiously mandated if only they could confidently put their trust in a body that would receive their zakat money and spend the same efficiently and scrupulously.
If they pay their zakat in proportion to their wealth and as mandated in the Holy Koran to, say, the government run National Zakat Board under the Islamic Foundation Bangladesh (IFB), then a great deal will be accomplished. However, this Zakat Board could collect the pittance of taka 20 million in the last lunar year ; it was only taka 14.20 million  the year before.
Another reliable estimate says that the potentials of zakat collection annually by a central mechanism like the Zakat Board is taka 220 billion which is equal to 40 per cent of the taka 550 billion outlay in the current year’s Annual Development Plan (ADP). So, there will be lots of resources for zakat if a proper mechanism is put in place.
But for this to happen the Zakat Board must be made truly dynamic in all respects to enthuse donors extensively and intensively throughout the country. Of greater significance would be its earning public trust about incorruptible and efficient use of the mobilized zakat monies. If this can be done, then the Board will take wings and fly.
No other form of poverty reduction has the inherent strengths of the zakat system because it is not based on charging interest. It is given away completely selflessly to the poor with the givers expecting no returns; the receivers, therefore, are only benefited and not in the least exploited. In other models of poverty alleviation, the need to pay back loans with interest cause hardships to the loan takers .
For example, even interest rates on Grammen Bank loans for undertaking productive ventures can be as high as 20 per cent. For other purposes, the same can vary between 8 to 5 per cent. Thus, though, these loans are provided free of collaterals and help fill a void in extending microfinance in the countryside, their takers in many cases have to endure a long innings in paying off for these loans over the mid or long terms. For them the pinches of poverty are eased considerably but not readily or fully .
Zakat given properly and through strong enough institutions can be interpreted as a far improvement on the Grameen model because its beneficiaries are not required to service their loans under stiff conditions of repayment or worry at all about repayment because it is purely a one way transfer of wealth or asset to the poor to fend for themselves. Thus, Zakat receivers can be expected to climb out of poverty sustainably and a great deal faster than from other models.
In our region there is the bright example of Malaysia.  To a large extent the  eradication of poverty or the poverty free face of Malaysia-- nowadays-- is owed to its planned and well executed zakat activities. There is no reason why we can’t emulate the Malaysian example and score great successes too.

The writer is Associate Editor of The Independent. E-mail: [email protected]/[email protected]

No other form of poverty reduction has the inherent strengths of the zakat system because it is not based on charging interest. It is given away completely selflessly to the poor with the givers expecting no returns; the receivers, therefore, are only benefited and not in the least exploited

Absence of Zakat in poverty alleviation strategies of Bangladesh

Notwithstanding bewildering advances in science and technology, explosion in the supply of consumer goods and higher standards of living enjoyed by ever greater number of people, global poverty remains roughly in the same formidable form. There are more people in planet earth today like never before in human history. The planets population is estimated to be 7 billion. But out of this number, one-seventh or 1 billion people are living on less than $ 1 a day or in extreme poverty. Another 2.3 billion are living on less than $ 2 a day. Thus, these two groups or 3.3 billion people or over 47 per cent of the global population live in poverty or extreme poverty. This global face of poverty is manifest sharply or symbolically in the present great imbalance in Bangladesh society. A great mass of its people who form 40 per cent of its population or 60 million out of its over 160 million people are obliged to live on the equivalent of less than $ 2 per day. But for these Bangladeshi poor and also all other poverty afflicted people all over the world, an escape from their poverty conditions is possible by embracing the correct Islamic way for doing the same. The critics may say that what was ordained fourteen hundred years ago in Islam must have become redundant in the twenty-first century. But the great success of the Islamic model of poverty alleviation through zakat in Malaysia and elsewhere, provide solid proofs of the high relevance, utility and applicability of this Islamic principle. There are different competing models of poverty alleviation nowadays. The one developed in Bangladesh by Nobel Laureate Professor Yunus, has caught the attention of the world. Indeed, he is rightly regarded for his contribution in helping a great many number of the poorest in Bangladesh society to see better days, to be better off or less poor through his Grameen Bank. But uncared for by our policymakers or planners, there is awaiting a model that was introduced fourteen centuries ago by Islam which promises to deliver all of mankind from the pangs of poverty and that too in a sustainable manner at the fastest. This is our compulsory Islamic system for giving Zakat (charity) by the rich to the poor the great potentials of which remain scantily explored. Only those in Bangladesh, its people with surplus resources, they need to be motivated about their religious duty. And the government must be willing and able to receive zakat monies from these affluent people and organizations regularly under a centralized fund and more importantly, utilize them systematically and progressively in different fields to lift people out of poverty without their relapsing back again into poverty. The government, if it takes up such responsibility, must carry it out with efficiency and scrupulousness to go on attracting the zakat funds from people. In other words, what I am proposing is that zakat should gradually graduate to an institutional level with the government spearheading zakat activities. Presently, zakat is mainly scattered individual activities of alms giving with little effect on truly longer term poverty alleviation. However, if zakat money is pooled together centrally and a big amount is mobilized on a regular annual basis, then the collecting authority can attempt to undertake large projects for the poor with such monies. For example, schools can be set up with a goal of establishing so many of them within a timeframe and run them for the educational benefits of the poor with the pupils paying no fees or very nominal fees and charges. Similarly, hospitals or clinics can be set up more and more by such an authority with the objective of bringing an ever bigger number of the poor under proper medical care free of costs or at nominal costs for them. The greatest contribution of such a centralized authority can be towards building skill training centres or vocational education centres for the poor . A poor person enabled to so train himself or herself up and start earning a livelihood, will soon cease to have any need for charity. In fact such a zakat receiver can expect to become a zakat giver some day and this is a very realistic possibility. A poor person once approached Prophet Mohammad (SM) for alms. The Prophet gave him some cash but advised him to buy an axe and start cutting firewood with it and sell the same in the market. The man carried out the Prophets instruction and remained not in poverty or in need of charitable help. The suggestion here is very simple : help the poor to help themselves and extend this help institutionally and systematically through a centralized authority instead of individual disparate acts of charities. I noted with disgust the news that 27 persons died from a stampede on Friday that started for zakat clothes in front of a rich mans house in Mymenshing. Such incidents though on a far lesser scale occur time and again in this country. But how much preferable it would be if that rich mans monies earmarked for buying zakat clothes could go to an efficient and centralized zakat administering authority created to build progressively all kinds of assets of the sort, mentioned above, to gradually help the poor and bring them out of poverty and its consequences on a lasting basis. Statistics from dependable sources say that Bangladesh today is not short of individuals whose generous and continuing participation in zakat activities can make so much of a positive difference in rapidly alleviating poverty. For example, the Bangladesh Information Notifier informs that the top nine richest Bangladeshis have each some 715 billion taka or more in bank accounts. This estimate does not include the thousands of other billionaires down the line with their many billions as well in bank accounts. But many of them would probably want to pay their zakat in right proportion as religiously mandated if only they could confidently put their trust in a body that would receive their zakat money and spend the same efficiently and scrupulously. If they pay their zakat in proportion to their wealth and as mandated in the Holy Koran to, say, the government run National Zakat Board under the Islamic Foundation Bangladesh (IFB), then a great deal will be accomplished. However, this Zakat Board could collect the pittance of taka 20 million in the last lunar year ; it was only taka 14.20 million the year before. Another reliable estimate says that the potentials of zakat collection annually by a central mechanism like the Zakat Board is taka 220 billion which is equal to 40 per cent of the taka 550 billion outlay in the current years Annual Development Plan (ADP). So, there will be lots of resources for zakat if a proper mechanism is put in place. But for this to happen the Zakat Board must be made truly dynamic in all respects to enthuse donors extensively and intensively throughout the country. Of greater significance would be its earning public trust about incorruptible and efficient use of the mobilized zakat monies. If this can be done, then the Board will take wings and fly. No other form of poverty reduction has the inherent strengths of the zakat system because it is not based on charging interest. It is given away completely selflessly to the poor with the givers expecting no returns; the receivers, therefore, are only benefited and not in the least exploited. In other models of poverty alleviation, the need to pay back loans with interest cause hardships to the loan takers . For example, even interest rates on Grammen Bank loans for undertaking productive ventures can be as high as 20 per cent. For other purposes, the same can vary between 8 to 5 per cent. Thus, though, these loans are provided free of collaterals and help fill a void in extending microfinance in the countryside, their takers in many cases have to endure a long innings in paying off for these loans over the mid or long terms. For them the pinches of poverty are eased considerably but not readily or fully . Zakat given properly and through strong enough institutions can be interpreted as a far improvement on the Grameen model because its beneficiaries are not required to service their loans under stiff conditions of repayment or worry at all about repayment because it is purely a one way transfer of wealth or asset to the poor to fend for themselves. Thus, Zakat receivers can be expected to climb out of poverty sustainably and a great deal faster than from other models. In our region there is the bright example of Malaysia. To a large extent the eradication of poverty or the poverty free face of Malaysia-- nowadays-- is owed to its planned and well executed zakat activities. There is no reason why we cant emulate the Malaysian example and score great successes too. The writer is Associate Editor of The Independent. E-mail: [email protected]/[email protected]