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1. Introduction
In a situation of poor response to the public management of Zakah fund after
enactment of Zakah Act, there should be a fresh look to the reasons why it is so and what
could be a new approach to organizing collection and disbursement of Zakah. To this
author, public management of Zakah could not gain adequate trust because of the nature
of the government and the payment of Zakah as per Zakah Act has been made voluntary.
Assuming that the present Zakah Act will continue to be with same characteristic, the
paper attempts to respond to the query in Section-1 why an initiative of the type of a pilot
scheme should be undertaken. Section-2 argues why current safety net programs can
exert very little effect on poverty alleviation initiative of the government and why a net
asset transfer mechanism needs to be put in place to effectively address the poverty issue.
Section-3 presents strengths of Zakah as an effective poverty alleviation tool. While
Section-4 deals with who should take the initiative, Section-5 illustrates how the program
should be approached. Section-6 tables a preliminary thought “PARSHI” – The
Neighbourhood Model and Section-7 provides a brief idea on how to attempt
institutionalisation of the PARSHI Model
1
The article was presented in a workshop “Institutionalising Zakah at Private Level” sponsored by Zakah
Forum as key-note paper.
2
Akkas, S. M. Ali (1999). Simulating Role of Zakah in Poverty Alleviation of Bangladesh under a
Dynamic Computable General Equilibrium Model, Policy Studies Series 1, Centre for Development
Studies and Services, Dhaka.
3
Akkas, S. M. Ali (1999). Simulating Role of Zakah in Poverty Alleviation of Bangladesh under a
Dynamic Computable General Equilibrium Model, Policy Studies Series 1, Centre for Development
Studies and Services Network, Dhaka.
4
Ibid
5
Ibid
is the FFE. The author’s same study depicts extent and coverage of the safety net
interventions. It is evident that the highest level of delivery of these programs took place
in 1995-96 distributing 1078 thousand metric tons of wheat costing Tk. 13,970.9 million
and 70 thousand tons of rice valued Tk. 907.2 million. That means, food grains costing a
total of Tk. 14,878.1 million were distributed in 1995-96. It should be noted that the
safety net programs are based on donors’ humanitarian grants with high degree of
fluctuations. At the same time, it is hardly a net transfer mechanism since FFW, the
major component of the safety net programs, is given as wage to construct and repair
rural infrastructure.6
On the contrary, Zakah is an obligatory social security arrangement for making those fit
who are unfit as market player and also a security for survival of those who will never be
fit for the marketplace.
7
Ibid.
160,000
110,517
140,000
100,919
91,777
76,080
Zakah
69,254
100,000
65,149
61,175
Receipts: Rural
57,516
53,187
49,698
80,000
47,213
and Urban
44,224
Fig-2 60,000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
& Ushr) to be
collected in
Bangladesh Zakah Bangladesh
during the
period under
simulation. An amount of Tk. 28,337 million may be collected as Zakah (including Ushr)
in the base year of the simulation, which stands at Tk. 47,213 million in 1998 and
becomes Tk.110,517 million in 2010.
It is quite
evident from
the Fig-3 that F ig - 3 : P e r c e n t o f R u r a l P o v e r t y G a p
c o u ld b e c o v e r e d b y R u r a l Z a k a h
Zakah
collected
from rural 1 0 0 .0 %
area can 8 0 .0 %
cover only 6 0 .0 %
14.8% of the
4 0 .0 %
rural poverty
gap in 1997. 2 0 .0 %
The coverage 0 .0 %
rises over
97
98
99
00
01
02
03
04
05
time and
19
19
19
20
20
20
20
20
20
becomes
Z a k a h /P o v e r ty G a p :R u r a l
24.7% in
2005.
Zakah/Poverty Gap 67.0% 71.4% 70.7% 74.1% 74.6% 75.8% 78.5% 81.3% 84.3%
Source: Model generated data based on simulation run of the 26-Sector CGE model.
The extremely low coverage of poverty gap by rural Zakah receipts shows severity of rural
poverty compared to urban poverty and the limitation of any poverty alleviation strategy solely
based on rural Zakah. This warrants for mitigation strategy with tools beyond Zakah with the
necessary condition that the intervention package must be rural biased and ensures net transfer of
resources primarily from the rich to poor and equally from urban to rural.
Step 1: Mobilise all rural Zakah to finance ultra poor– Cut off poverty eradication time 2
years: First year to create their asset base and 2nd year to form working capital.
The model projects that 10.5 years would be required to cover all moderate poor (marginal
farmer households and small farmer households) to bring them above poverty line if each
moderate poor family is provided with Zakah equivalent to the amount planned to be given to an
ultra poor family. Since the per capita income of marginal farmer household population is double
the amount of the ultra poor and thereby the poverty gap being smaller time to be required to
cover this group would be half i.e., 5 (five) years instead of around 10 (ten) years. The period
may lessen further poverty gap with the small farmer households is considered. Per capita income
of small farmer households being four times higher than that of the landless/ultra poor and the
poverty gap with this household group being further narrowed the actual time to be required to
cover all the moderate poor may be even less than 4 (four) years. If creation of asset base and
provision of working capital to these household groups are considered as in line with the ultra
poor, at best 8 (eight) years would be required to bring this moderate poor groups out of poverty.
At this stage it is important to recall that poverty income was defined to include only the calorie
intake. However, after having been covered all the poverty poor under this definition, poverty
may be redefined to include other essentials in the commodity bundle in phases with increase of
income level of the common people.
Step 2: Mobilise all rural Zakah to finance marginal farmer households and then small farmer households (moderate
rural poor) to create their asset base. The second year to form their working capital. Cut off poverty
eradication time 10.5 years.
Step 3: Redefining poverty to include other essentials in the commodity bundle in phases with increase of income level
of the common people.
Assuming that ultra and very poor are covered in the first year of urban intervention
for poverty alleviation, all moderate urban poor can be covered immediately in the next 1
(one) year. That means, within two years time it would be possible to eradicate income
poverty (in terms of calorie intake). This will allow release of urban Zakah money from
the third year to make available for eradication of moderate poverty in rural Bangladesh.
This strategy, if pursued, will lessen the period of eradicating poverty of rural moderate
poor to 5 (five) years instead of 10.5 years.
And who believe in revelation sent to thee, and sent before thy time, and (in their hearts) have the assurance of the
Hereafter.
They are on (true) guidance, from their Lord, and it is these who will prosper.”
Whoever possesses the above qualities can join their hands in taking the initiative.
Not necessarily that initiators must be the persons with nisab level income only. Anybody
who wants to contribute (including Zakah) to the cause of Allah out of his or her income
can be member of the Parshi. The Zakah Fund administration can help organize the
Parshi.
Zakah into picture and made it an integral part of self-engineered local process of Islamic
community development.
The first five verses of Suratul Baqara tell clearly about who should take the
initiative and why. The fifth verse categorically says about persons taking initiative who
will surely prosper. The translation of the verses read as follows:
“A.L.M.
This is the Book, in it is the guidance sure, without doubt, to those who fear God;
Who believe in Unseen, are steadfast in prayer, and spend out of what We have
provided for them;
And who believe in revelation sent to thee, and sent before thy time, and (in their
hearts) have the assurance of the Hereafter.
They are on (true) guidance, from their Lord, and it is these who will prosper.”
Whoever possesses the above qualities can join their hands in taking the initiative.
Not necessarily that initiators must be the persons with nisab level income. Anybody who
wants to contribute (including Zakah) to the cause of Allah out of his or her income can
be member of the Zakah Forum.
Community development institution building falls under category of action research.
A research body should in any way be involved with the process. While MCCA may
continue to implement the program as it is, Centre for Development Studies and Services
(CDSS) may take the responsibility in taking care of implementation status of only those
initiatives undertaken on pilot basis. Accordingly, CDSS may be provided with monetary
supports for its technical inputs from Zakah Fund. Terms of Reference for the CDSS
should be carefully developed and agreed upon by the Zakah Forum, and CDSS may be
assigned the task as per TOR.
An Overview
PARSHI is a Bengali word, which means neighbours. In Islam taking care of
neighbours has great religious importance. If family is the first tier of Islamic society then
neighbourhood should be the second tier. Normally PARSHI comprises approximately
forty families surrounding a Muslim. PARSHI can be used to mean in broader sense as
well. Then it would mean next locality, village, Union Parishad, Thana, District,
Division, Province or even a country. From the viewpoint of Zakah administration and its
management the wider meaning of PARSHI has great implication.
So far as program components are concerned, PARSHI may consist of the following
program objectives as outlined in Fig-5.
Abbreviating PARSHI/
The Program Objectives
Program Components:
Prayer 1. Establishing Salat
Rearing
PARSHI
Raising 3. Caring
Resourcefulness
Societal 4. Socioeconomic uplift
Savings
Honesty 5. Promotion of Human
Humanism Qualities & Human
Human Rights Rights
6. Income Generation
Investment through Growth
Promotion
These program objectives clearly spell out nature and dimensions of the
neighbourhood model. Along with establishing salat (prayer) and zakah (assistance),
caring (rearing, raising, resourcefulness), organisation building for economic wellbeing
(societal, savings), promoting human virtues (honesty, humanism) and undertaking
income generation activities (i.e., investment) are major activities of the model.
people so that they can come out of poverty quickly and can lead a prosperous economic
life helpful to carryout the role of vicegerent in a meaningful way.
PARSHI
Pilot Program 1
Mosque
Parshi Parshi