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HISTORICAL *** , zakat and waqaf had contributed greatly to the advancement of knowledge, the establishment of hospitals, orphanages, universities and led to great civilisations.

It held a central role in Islamic financial policy. During the Umayyad and Abbasid eras, there was evidence of economic growth as a result of optimum management of zakat.

It is one of the largest forms of wealth transfer to the poor and needy and is the source of Islamic society economic strength and is interest-free.

During the Umar bin Abdul Aziz’s leadership for 30 months, no records of poor people could be found. The distribution of zakat then was consumable and productive activities.

Later, it was relegated to just alms for the poor.

Zakat can serve as a balance between supply and demand in the micro-economic sector and help address the problem of poverty through the creation of purchasing power and the development of an entrepreneurial community.

In Malaysia, zakat distribution has a positive, but *** all impact on aggregate consumption. It should cover other forms of monetary aid that can generate a continuous flow of income for recipients.

Recently, there are improvements in the form of business capital, business tools, business financing and working salary.

When managed properly, zakat has the potential to help achieve national development goals ie, economic empowerment.

In Indonesia, the UNDP began harnessing it for sustainable development goals (SDG) projects by partnering with Baznas, the national zakat collection body. The latest is a partnership to support Covid-19 economic recovery.

The potential size of the annual zakat pool was estimated between US$200 billion (RM8.16 billion) and US$1 trillion by the World Bank and IDBG in 2016.

The aggregate resources pooled together from the potential zakat collection in 17 OIC countries will be enough to fund resources for poverty alleviation in all those countries combined.

According to Yusuf Qardhawi, zakat makes a fair contribution to social and economic stability, for the present needs of the poor and needy, and serving other functions that profoundly contribute to social life in a broad sense of social justice.

Besides providing for shelter, food, clothing, medication, education and transportation, we need to empower the beneficiaries (asnaf).

Empowerment is not enough with just giving money but it includes mentoring and strengthening self-confidence.

However, because of some bureaucratic processes, many have given up and looked for solutions elsewhere with catastrophic consequences.

There have been some improvements but there are still more rooms.

Zakat institutions need to be expanded and enhanced to build a new dimension, especially in the distribution of zakat, so that it becomes a competitive institution locally or even globally.

Effectiveness of zakat management relates to the distribution mechani *** , the quality and professionali *** of the administrator and transparency in the governance and the institution itself.

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