An Islamic Approach in Determining Poverty Line

Posted September 9th, 2011 in Article

Islam is the only syumuliah religion in the world, which means that Islam has system or values that cover all aspects of life, from economic, social cultural, politics to other possible aspects. Therefore, Islam has rules that offer solution to all life problems.

Islamic teachings are not only focused on the aspects of religious rites, but also on worldly issues such as how we should interact with others. Islam also has detailed rules on economic aspects of our life, such as why usury and gambling are banned, and how Moslems are still allowed to make banking affairs under certain sharia conditions and principles.

On a macro context, Islam also provides answers to how we should calculate or determine standards for poverty. While the Central Statistics Bureau (BPS) uses the standards of basic needs to determine poverty standards (which has triggered critics from economists), Islam uses two approaches that are far different from BPS standards, which are the had al kifayah and the zakat nishab line (certain minimum limit of wealth on which someone is entitled to pay zakat out of it).

The had al kifayah standard of poverty has been applied in Malaysia. Parameters in this standard cover five vulnerable factors of life, which are religion, wealth, common sense, descendants, and one’s soul. Unlike the poverty standard applied in Indonesia, which measures poverty only from the aspects of income and expenses based on the food and nonfood necessities, the had al kifayah standard determines the level of necessity needed by a household to sustain daily needs. While the first standard focuses on the acceptable level of minimum income, had al kifayah is a more comprehensive, holistic and much better in every aspects compared to the standard applied in Indonesia today.

The second approach to determine poverty standard in Islam is by using zakat nishab as a parameter of someone’s status in the context of zakat rights and responsibilities. The Holy Al-Qur’an mentioned the two groups of dhuafa who are in top priorities for zakat distribution, which are the fakir and the poor groups. According to the mazhab of Syafi’i and Hambali, fakir is totally deprived of income sources, while the poor has income source but it is not enough to fulfill basic needs.

Islam recognizes two options of zakat nishab calculation, by using gold and silver nishab and by using nishab for zakat of agricultural products. If we use the gold and silver nishab in Indonesia, we will end up in a poverty line of Rp 3.67 million per month per household or Rp 782,200 per month per capita (assuming gold price is at Rp 520,000 per gram and the average number of family member of 4.7/family). In other word, someone will be categorized as poor is he earn less than Rp 782,000 every month, or Rp 26,073 (US$ 3.02) per day. This is higher than the World Bank’s poverty standard of US$ 2/ day.

Meanwhile, if we use nishab for zakat of agricultural products, the poverty line will be set at Rp 3.668 million per household per month, or Rp 780,400 per month per capita (assuming nishab for zakat of rice at 524 kg and rice price at Rp 7,000/kg). It means someone who earns less than Rp 780,400 per month or Rp 26,014 (US$ 3.019/day) is considered poor. This figure is more or less equal to the poverty line generated using the nishab for gold and silver.

Executive Secretary of the Center for Syariah Development Study of the Bogor Agricultural Institute (PKPS-IPB), Dr. Irfan Syauqi, said during the Intellectual Discussion held by IMZ in cooperation with IKAZ Malaysia and LPPM IPB that “the calculation using nishab standard as the base of poverty line is more normal and rational compared to the method applied by the BPS. The method also generates poverty line that is higher than the one determined by the World Bank. From the prespective of community welfare, the use of nishab in determining poverty line is the right option, because it has strong orientation and favor to the dhuafa of the community. We hope the government will consider using syariah-based perspective to determine poverty line”. Wallahu alam.

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