PROVIDING FOR THE RESOURCE SHORTFALL FOR POVERTY ELIMINATION THROUGH THE INSTITUTION OF ZAKAT IN LOW-INCOME MUSLIM COUNTRIES

Abstract

This paper is an attempt to estimate the resource shortfall and potential zakat collection for poverty elimination in the low-income Muslim countries. The paper estimates the resource shortfall by utilizing the international poverty lines (under USD1 and 2) headcount and poverty gap index estimated by the World Bank. Potential zakat collection has been estimated by utilizing Kahf’s (1989) definitions of zakatable items with some modifications. The paper finds that some of the low-income Muslim countries can meet their resource gap under USD1 international poverty line with potential zakat collection. However, other countries, mostly belonging to Africa, cannot meet their resource shortfall from their potential zakat collection.

JEL classification: I38, I32

Key words: Zakat collection, Poverty elimination, Resource shortfall