Zakat and Its Role in Achieving Main Pillars of Sustainable Development Goals (SDGs) in Indonesia

Abstract

As Islamic social finance, zakat has the potential to support the achievement of the Sustainable Development Goals (SDGs) in Indonesia. The economic pillar, the social pillar, and the environmental pillar are the three core pillars of the SDGs. This study aims to analyze the role of zakat in achieving the three main pillars of the SDGs in Indonesia. Using regression model estimation, we found that (1) in terms of the economic pillar, zakat has a positive contribution to boosting national economic growth and also decreasing the unemployment level in Indonesia. (2) In terms of the social pillar, zakat not only contributes to decreasing poverty but also to the increasing level of education in Indonesia. In addition, (3) in terms of the environmental pillar, zakat in Indonesia also contributes to improving and supporting access to clean water and sanitation for all Muslim communities, especially poor people. Therefore, we concluded that zakat has a positive impact on social and economic welfare as well as on overcoming environmental problems. Further, for the robustness test, the model in this research is stated to be robust. The empirical findings are expected to provide an alternative policy for government authorities to continue to create and promote zakat programs to support the achievement of the main pillars of the SDGs in Indonesia.