Effectiveness of the Economic System to Zakat and Waqf for Empowerment of the Ummah in Indonesia

Abstract

The distribution of waqf and zakat is known only to consumptive objects, but in its development, the distribution of waqf and zakat is directed at more productive things, for example in the form of capital assistance aimed at improving the quality of goods production to meet the needs of the wider community, so they can compete with a market share of capitalists who deify interest (usury). This article describes the solution to economic problems by applying the Islamic economic system correctly, through the distribution of more productive waqf and zakat aimed at the welfare of the people. Endowments and zakat basically have the same principle as the Islamic economic system because in both economic activities the purpose of economic justice is based on the unity of God to Allah, which is one of the principles of Islamic economics. The Islamic economic system itself is an economic system that succeeded in shifting the capitalist economic paradigm that brought destruction to the world economy.