ABSTRACT
This chapter attempts to estimate the potential Zakat collectible in 17 OIC countries for overcoming the poverty gap as measured by the poverty headcount ratio and poverty gap index. The empirical evidence reveals that the Zakat to GDP ratio exceeds the Poverty Gap Index to GDP (PGI-GDP) ratio in all countries except in Bangladesh, Mozambique and Nigeria where the Zakat to GDP ratio is less than the PGI-GDP ratio with the poverty line defined at $1.25 a day. It is also discovered that the Zakat to GDP ratio exceeds the PGI-GDP ratio in all countries except in Bangladesh, Mozambique, Nigeria and Pakistan where the Zakat to GDP ratio is less than the PGI-GDP ratio with the poverty line defined at $2.00 a day. The estimation results also show the comparison of the Zakat to GDP ratio against the poverty headcount ratio. It is found that the Zakat to GDP ratio exceeds the Poverty Head Count Ratio to GDP (PHCR-GDP) in all countries except in Bangladesh, Mozambique, Nigeria, Pakistan and Tajikistan with the poverty line defined at $1.25 a day. Furthermore, the Zakat to GDP ratio exceeds the PHCR-GDP ratio in all countries except in Bangladesh, Indonesia, Kyrgyz Republic, Mozambique, Nigeria, Pakistan and Tajikistan with the poverty line defined at $2.00 a day. Therefore, it is established that the institution of Zakat has significant potential to contribute towards poverty alleviation. Finally, we show that 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 17 OIC countries combined. Hence, there is an important role to be played by OIC to collaborate with member countries and transfer necessary resources from the Zakat surplus regions to the Zakat deficit regions.
